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Pennsylvania Real Estate Investment Trust (NYSE:PEI)

Q1 2011 Earnings Call

April 27, 2011 3:00 PM ET

Executives

Garth Russell – Managing Director, IR, KCSA Strategic Communications

Ronald Rubin – Chairman and CEO

Ed Glickman – President and COO

Robert McCadden – EVP and CFO

Joseph Coradino – EVP

Analysts

Quentin Velleley – Citi

Craig Schmidt – Bank of America/Merrill Lynch

Nathan Isbee – Stifel Nicolaus

Cedrik Lachance – Green Street Advisors

Michael Mueller – JPMorgan

Michael Bilerman – Citi

Benjamin Yang – Keeefe, Bruyette & Woods

Operator

Good day, ladies and gentlemen. Thank you for standing by. Welcome to the Pennsylvania Real Estate Investment Trust First Quarter 2011 Earnings Conference Call. During today’s presentation, all parties will be in a listen-only mode. Following the presentation, the conference will be opened for questions. (Operator Instructions) This conference is being recorded today, Wednesday, April 27, 2011.

I would now like to turn the conference over to Mr. Garth Russell of KCSA Strategic Communications. Please go ahead, sir.

Garth Russell

Thank you. Before turning the call over to management for their prepared remarks, I would like to state that this conference call will contain certain forward-looking statements within the meaning of the federal securities laws. Forward-looking statements relate to expectations, beliefs, projections, future plans, strategies, anticipated events, trends and other matters that are not historical fact.

These forward-looking statements reflect PREIT’s current views about future events and are subject to risks, uncertainties and changes in circumstances that might cause future events, achievements or results to differ materially from those expressed or implied by the forward-looking statement. PREIT’s business might be affected by uncertainties affecting real estate businesses generally, as well as specific factors discussed in PREIT’s press releases, documents previously filed with the Securities and Exchange Commission, and in particular PREIT’s annual report on Form 10-K. PREIT does not intend to update or revise any forward-looking statement to reflect new information, future events or otherwise.

It is now my pleasure to turn the call over to Ron Rubin, Chairman and CEO of PREIT. Ron, the floor is yours.

Ronald Rubin

Thank you very much, Garth. Welcome to the Pennsylvania Real Estate Investment Trust first quarter 2011 conference call. Joining me on the call today are Ed Glickman, President; Bob McCadden, CFO; and Joe Coradino, President of our Management Company and Head of our Retail Operations. Also in the room today are Vice Chairman, George Rubin; and General Counsel, Bruce Goldman.

Today we will discuss our first quarter results, the status of our current projects and our expectations for the balance of 2011. After we conclude our remarks and our presentation the call will be opened for your questions.

Before we begin, I’d like to publicly take this opportunity to thank Rosemarie Greco for her many years of leadership and valuable service. Rosemarie is not seeking re-election to the pre-board when her term expires in June and the Company is benefited in many ways from her outstanding judgment and guidance.

In her numerous roles through the years as the Board member and recently as compensation committee chair, Rosemarie helped to make sure that the Company prepared for and met market challenges while also remaining responsive to the interest of our shareholders, our employees and the communities in which we operate. We miss her and thank her for all of her meaningful contributions as a company.

As noted in our press release, the Company has experienced five consecutive quarters of comp store sales growth. We are pleased with the trends in sales and in occupancy yet we understand that the recovery is still underway. With performance consistent with our guidance, we are making steady progress in our efforts to strengthen our financial position, improve our operational performance and maximize the value of our properties.

To do this, we are working to improve our balance sheet, place tenants and service, increase NOI, improve occupancy and generate positive leasing spreads. All is part of our strategy to create long-term value for our shareholders.

And with that, I’ll turn the call over to Ed Glickman.

Ed Glickman

Thanks Ron. Good afternoon and thank you for joining us on the call. The Company had a good first quarter and continues to benefit from an improving economy. The comp sales have continued to recovery in 30 of our 38 malls posted performance that was equal to or better than a year ago. Occupancy improved at 25 of 38 malls and was up 0.4% across the portfolio.

Our average rent level is down $0.10 year-over-year and same store NOI net of termination income was essentially flat at minus 0.7%. All-in-all well some of our performance metrics is still slightly negative, we believe that the company has achieved an overall level of stability and a foundation for future growth.

Translating the stable environment into NOI growth is an ongoing channel and the full focus of our effort. While retailers are forecasting moderate growth in sales, there is still concerns about the economy. To echo comment by a local retailer quoted in the most recent Philadelphia Fed’s base book. We are cautiously optimistic although we do not think that consumer will step up buying strongly until employment fix up. Our portfolio on metrics mirror this sentiment.

To achieve consistent NOI growth, we need to see continued recovery in retailer expansion. However each quarter net sales continued to grow is another positive step for our portfolio and we now have five consecutive positive steps. We go into the May ICSC convention in a much stronger position than we were last year.

Our retailers are doing better, the economy is improving and we can show better performance at our properties. This convention will allow us to showcase the positive momentum in our assets. On the asset side of the balance sheet, the company continues to be conservative in capital allocation with limited spending during the first quarter.

Well we are an opportunistic company and we are aware of the numerous contemplated asset transactions in the mall sector. Our primary focus at this time is to grow returns on our existing asset base. We follow the great retail outage never fall in love with the inventory. Should it turn out that there is a strong market for certain of our non-strategic assets, we will be a seller, we will consider sales and should it turn out that we have an opportunity to acquire assets at truly opportunistic prices, we may be a buyer than more likely a partner.

We believe that PREIT has the skill and the capacity to add value to underperforming assets. On the liability side, we will continue to look for lower leverage that improves operating performance opportunistic asset sales and capital markets transaction. At the current time as Bob will discuss, we believe that we have sufficient liquidity and access to capital to operate our business and to meet all of our financial obligation as they come due. All in all the first quarter was quite positive for PREIT. We are optimistic regarding the balance of the year with additional color to follow the ICSC convention.

With that, I will turn the call over to Bob McCadden.

Robert McCadden

Thanks Ed. PREIT’s net loss for the quarter was $14.3 million or $0.27 per share. FFO was $21.3 million or $0.37 per share, compared to $25.5 million or $0.55 per share in a comparable period. Last year’s results included $2.4 million of NOI generated by the power centers that we sold in September 2010 and $1.8 million of lease termination revenues. FFO on a per share basis also reflects the diluted effect of the equity offering completed in the May of 2010.

Same store NOI excluding lease termination revenues were $56.7 million down about $0.5 million or 0.7% from a year ago. Outstanding debt for the first quarter including our share of partnership debt averaged $2.4 billion a decrease of over $350 million from last year’s comparable quarter.

Our effective interest rate for the quarter was 6.13%, 76 basis points higher than last year’s quarter. We have reduced debt by over $300 million since March of 2010 and at the same time improved our liquidity position by $76 million. At the end of March 2011 we had $43 million of cash on hand and the $149 million available under the revolving credit facility.

Our liquidity position is sufficient to meet all of our near-term capital needs. At the end of the quarter 97.2% of our debt was either fixed or swapped to fixed . Our bank leverage ratio was 57.62%, 333 basis points improvement over last year’s ratio.

Before turning to 2011 guidance, I wanted to highlight two distinct changes that we made to our supplementary reporting this quarter.

First, we have begun to report occupancy on an economic basis to include all tenants that contribute to our revenues. Previously, our primary leasing metrics did not include the contributions of our specialty leasing and seasonal tenants occupying in line spaces. In addition with the growth of pop up store and same similar concepts, we believe this total occupancy metric better represents the level of retailer interests and sales activity at our properties.

While we are including occupancy from the specialty leasing tenants, we are excluding from occupancy, tenants who are legally obligated under their leases but no longer made the revenue recognition criteria under the accounting rules in order to better align our operating and financial performance metrics.

The net impact of these changes added approximately a 160 basis points to our non-anchor mall occupancy and 70 basis points to our total more occupancy as of March 2001, as compared to the previous method of reporting. For the March 2010 period non-anchor occupancy increased by 230 basis points and total occupancy increased by 120 basis points.

Second, in our leasing activities summary, we are providing leasing spread information about the minimum or base rent basis and on a gross rent basis. As calculated gross rents include minimum rents along with estimated common area maintenance cost, real estate taxes and other charges. The new presentation should provide investors and analysts with additional information to model our operating performance.

Regarding our outlook for the balance of 2011, we are reaffirming our expectations that GAAP earnings per diluted share will be a loss between $0.78 and $0.88. We expect FFO per diluted share to be in the range of $1.56 to $1.66 per share. Our guidance does not contemplate any acquisitions, property sales or capital market transactions, other than property financing. Joe Coradino will now cover the first quarter’s activity and our retail portfolio.

Joseph Coradino

Thanks Bob. The retail environment is exhibiting signs of a rationale and sustainable recovery. At PREIT we realized the year-over-year enclosed mall comp sales increase of 4.7% from 341 to 357 per square foot. We now have 23 properties with sales over $300 square foot, 14 of those were over 350 per square foot. The sales increase of our premier properties, which includes Cherry Hill, Lehigh Valley, Woodland and Jacksonville malls where comp sales were 533 per square foot increased 9% over last year and 2% over the last quarter.

From a retailer perspective 7 of our top 10 in line tenants realized sales increases over the last year. Total portfolio occupancy increased by 40 basis points to 90.4% from a year-ago in-line occupancy over the same period is up a 100 basis points to 86.5%. During the quarter, we opened 80,000 square feet of space and it is noteworthy that this consists of entirely small shop tenets.

As of March 31st we have over 175,000 square feet of executed new leases for 2011 occupancy and another 300,000 square feet of leases in negotiation. Leasing activity for the quarter totaled 841,000 square feet we renewed 81.9 acre leases totaling 310,000 square feet at an average base rent of 22, 23 per square foot a $0.01 per square foot increase over expiring rents.

It’s also noteworthy renewals with terms of five years or greater, so a 5% increase of renewal spreads across the portfolio. We also had successful quarter on the anchor renewal front, signing five anchor renewals representing approximately 370,000 square feet. We have three anchors totaling 340,000 square feet that are set to expire over the balance of 2011. We are in discussion with the three remaining anchors, and expect order renew. We are continuing to realize the impact of our investment in redeveloping. Our efforts to upgrade the merchandising at our properties have resulted in improved metrics.

At Plymouth Meeting Mall, the comp sales productivity ended the quarter with 343 per square foot, an increase of 43% over the 240 per square foot reported in the first quarter of 2010. The increase is driven by the additions to the property of California Pizza Kitchen, P.F. Chang’s, Redstone, and Redstone Grill, which was significantly outperforming the mall averages. The increase in sales is generating significant additional tenant interest in the property.

At Cherry Hill Mall, the comp sales productivity is 562 per square foot, an increase of 9.3% over March of 2010. The increase can be attributed to a strong year-over-year sales growth with 25 tenants showing double-digit increases over the previous year. We continue to drive sales by adding luxury merchants to complement the new Nordstrom and recently opened BOS.F and Hugo Boss.

We are committed to our efforts to backfill vacancy in our secondary market assets with alternative uses. We are proud that our accomplishments in this regard were reported among these Wall Street Journal, announcing the opening next week of the Disney Entrepreneur Center in 22,000 square feet in Orlando Fashion Square.

Additionally, Voorhees City Hall, will open on the second level of the newly configured mall at Voorhees Town Center on May 17th. Solidifying the properties position in the market, with 80% of the residential apartments that we’re opening year end lease to reserve. Voorhees Town Center has a significant pipeline of retail and alternative use deals generated by these mix of uses. Aside from alternative uses, we’re pleased to report that national retailers are showing renewed interest in our secondary market properties.

Notably during the quarter, we executed leases for our new Dick’s store at Crossroads Mall, (inaudible) Jos. A. Banks and Children’s Place at Gadsden Mall and Route 21 at Hagerstown Valley View Malls.

We are keenly focused on enhancing our operational proficiency at a number of levels. We advance, we have advanced our social media initiatives and we are introducing an interactive mobile ad in May for our properties. We are active on numerous social media platforms and we’re recently honored by ICSC with a Silver MAXI for our work in digital media.

And we have instituted can initiative to mitigate the dilution of PREIT’s NOI through controlling expenses and establishing rigorous standards that sharply reduce can concession percentage.

The environment for leasing space continues to improve, driven a large part by the recent solid sales performance of our properties. We are pleased with the tenant interest generated by our completed redevelopments that remain committed to enhancing the shopping experience throughout our portfolio.

With consumer and retail sentiment on the upswing, we are optimistic as we prepare for the upcoming ICSC condition.

With that we’re now ready for questions.

Question-and-Answer Session

Operator

Thank you. (Operator Instructions) Our first question is from the line of Michael Bilerman with Citi. Please go ahead.

Quentin Velleley – Citi

Yeah, this is Quentin Velleley. Just in terms of the renewal spreads I think you’ve said you’re getting 5% positive spreads on leases with terms greater than five years. I’m just wondering what proportion of the renewals in the quarter were done on a short-term lease basis and what kind of rental spreads that would be done on?

Robert McCadden

48% were short-term leases.

Quentin Velleley – Citi

And I assume that was about a 5% average decline then – is that kind of a rate?

Robert McCadden

Well, for leases less than one year, it was about – it was 5.5% decline, one to three years about an 8% decline, three to five years 2.1% increase.

Quentin Velleley – Citi

Okay. And that, I think that ratio of shorter term leases is about the same as what you’ve been doing over the last few quarters. When do you sort of expect given the increasing styles that you’ve had, when do you expect this sort of short-term leasing proportion to improve?

Robert McCadden

We are hopeful that is going to turn around as part of our, some of the initiatives I’ve talked about in my remarks. The tenant sales are increasing at our properties and we have now had the opportunity in having number of portfolio transactions that we’re negotiating with national tenants, where we are optimistic that we’re going to see the renewals turn positive.

Quentin Velleley – Citi

Okay. And then maybe one big hit and I don’t know you sort of commented that you’re more focused on internal growth rather than external growth and given the amount of the sort of great mall assets that are in the market at the moment. Have you spoken to private equity or joint venture partners in terms of looking at doing an acquisition where your ownership stake is lower and you can leverage your platform into managing those assets?

Robert McCadden

We have been approached by folks that are interested into the portfolios that are out there. And we have had some discussions around those possibilities.

Quentin Velleley – Citi

Okay. Thank you.

Operator

Thank you. The next question is from the line of Craig Schmidt with Bank of America/Merrill Lynch. Please go ahead.

Craig Schmidt – Bank of America/Merrill Lynch

I guess particularly opposite (inaudible) we think you hear about number of malls coming to sale. At what cap rate as they were loan up – would you be an active seller in that environment?

Ronald Rubin

Well I think you can rest assure that if Westfield achieved its stated goal that we would be interested in being a seller at those level. So it really depends on the cap rates for the properties that we would be interested in selling. But I wouldn’t put an exact number on it once we were talking about a particular property.

Craig Schmidt – Bank of America/Merrill Lynch

Okay, understood. So you are going to take a look at the assignments in Westfield and eventually JuJubes malls for sale?

Ronald Rubin

Look this is our business we’re in this business, we’re in this property type and so these are the assets that we trade in and as I’ve said in my remarks where buyers and sellers depending upon where the pricing turns out if it turns out that these assets that priced very aggressively.

Then I think at this stage, we would be a seller, if it turns out to properties are priced very opportunistically, I think that we would be interested in being a partner. Given our balance sheet where it is it’s unlikely that we’re going to be out there for one of these portfolios on our own. So we clearly would consider being a partner if the properties trade opportunistically.

Craig Schmidt – Bank of America/Merrill Lynch

Great thank you.

Operator

Thank you the next question is from the line of Nathan Isbee with Stifel Nicolaus. Please go ahead.

Nathan Isbee – Stifel Nicolaus

Hi good afternoon. Joe can you talk about how many of your properties are you considering some of these alternative non-retail uses for?

Joseph Coradino

Well I mean certainly it’s not something that we’re looking at for our premier properties that is top four or five assets. We have interestingly had interest in properties that are performing over $350 a square foot and they’re being selective in that regard and are very concerned on the synergy associated with the use and whether it works for the asset. But I would say the primary focus for alternative usage is looking at it for what I would call the secondary market malls. That is the primary focus and where we are seeing most the traction in that regard.

Nathan Isbee – Stifel Nicolaus

Okay have you closed any other deals?

Joseph Coradino

We’re I mean we are making a good deal of progress in our health care initiative with respect to transactions at three of our properties right now and continue to look at other uses including educational, governmental etcetera, so more to come.

Nathan Isbee – Stifel Nicolaus

Would you expect announcements over the next quarter or two?

Joseph Coradino

Not in a position to really respond to that question.

Nathan Isbee – Stifel Nicolaus

Okay. And then, can you just talk a little bit about the deal terms at the for the Disney space, was it in – just in terms of term?

Joseph Coradino

Have to get back to you on that one. I don’t have the specifics in hand, I mean I can remember the rent, but I don’t remember the deal, so I would rather not do it on one way, I would rather get back to you offline.

Nathan Isbee – Stifel Nicolaus

Okay. And then can you just talk a little bit about the interior of Plymouth Meeting, I mean you talked about the restaurants outside, but and you put an expressed in about a year ago and how that experiment has been going?

Joseph Coradino

Yeah I mean clearly that is our focus right now the interior of Plymouth Meeting Mall. We took a little bit of a set backwards with the closing of Krazy City there. But we just put express and it was actually just this past November that they opened. And we do have a number of other tenants that we’re working with for the interior of the mall. Some have – are fairly well along in terms of the process.

Nathan Isbee – Stifel Nicolaus

Okay.

Joseph Coradino

But the interior is our focus right now.

Nathan Isbee – Stifel Nicolaus

All right. And then just one final question, I don’t know if this is for Ed or Bob, in terms of your credit facility as the credit markets as continued to improve, have you reopened discussions with your lenders possibly to redo that deal?

Joseph Coradino

Yes.

Nathan Isbee – Stifel Nicolaus

Okay. Any progress there?

Joseph Coradino

Yes.

Nathan Isbee – Stifel Nicolaus

Okay. Thanks.

Operator

Thank you. The next question is from the line of Cedrik Lachance with Green Street Advisors. Please go ahead.

Cedrik Lachance – Green Street Advisors

Yeah, thank you. In your prepared remarks you alluded to the fact that some of the national retailers are becoming more interested in secondary locations or secondary productivity mall. Would you be able to expand on that a little bit in terms of what creating the appetite for those locations and if there are particular retailer categories that are more representative than others?

Joseph Coradino

Well I think it’s just generally that there are a number of retailers that are in the expansion mode Jos. Banks is probably a good example of that. Moving to Gadsden Mall at Alabama, I think a part of it is that we have been very aggressive in terms of shifting down new retailers through these properties and telling a story regarding the market dominance of these properties within the regions and how Jos. Banks could serve the mall customer in a 50 or 70-mile radius. And that gives them a significant customer base to draw on.

Cedrik Lachance – Green Street Advisors

Okay and then regards to – perhaps the TI packages that have to be associated with those leases, how do they differ from other tenants or how do they differ from your more productive locations?

Ronald Rubin

I mean clearly the deals on it – it’s a sale per square foot gain and the transaction are as strong as one might do in a major mall. And the rents are a bit lower. TI tends to be fairly consistent.

Cedrik Lachance – Green Street Advisors

Okay. So I saw on a percent of NOI, the TIs are probably higher than you would normally provide for in different malls?

Ronald Rubin

Yeah on a rent NOI basis, yes.

Cedrik Lachance – Green Street Advisors

Okay. And then regards to your interest and whether you’d interested of being a buyer or seller, you talked about having some – I suspect institutional investors approaching you. Does that – does the possibility of having a partnership change the price at which your buyer.

Ronald Rubin

No I don’t think that we would be a buyer without a partner. So that’s the capacity in which we could consider it.

Cedrik Lachance – Green Street Advisors

Good all right. Thank you.

Operator

(Operator Instructions) The next question is from the line of Michael Mueller with JPMorgan. Please go ahead.

Michael Mueller – JPMorgan

Yeah hi couple of questions. First of all going back to the non-retail uses in some of the secondary market centers, can you talk a little bit about, I know you can’t talk about specific deals, but just generally how rent levels for those types of deals compared to say with the average rent is for a mall or I know after these are going to be not a 50 odd line spaces. So what a comparable rent for a retailer would be at the quantity location where one of these users will go to?

Joseph Coradino

So you’d like me to discuss comparing an alternative used deal on a secondary market to a retail deal?

Michael Mueller – JPMorgan

Yeah, yeah exactly, exactly.

Robert McCadden

I mean essentially the big issue you have in the transaction relates to CAM charges and to some of other additional charges because an office user, a healthcare user is not interested in paying that kind of the CAM that might be $15 a foot as an example. They are more focused on what would be marketplace for office space within that particular area, which might be in some cases 50% of what malls CAM is. And so that’s what really driving transaction.

I’d say the rents tend to be somewhat again for what I would consider to be 10 and 20 odd line space in a mall, really difficult to lease state particularly in secondary markets.

The rent is not inconsistent what you would get for a retailer in terms of the minimum rent, where you really – where you would really are struggling is in that operating expense including that determine there. With respect to TI it tends to be a case-by-case basis depending on the build-out, in some cases a lot of what’s existing just needs to be added to again depending more on the user. So the TI again is somewhat of a – so that case-by-cases decision.

Michael Mueller – JPMorgan

Got it, okay. And switching gears for a second, just looking at 2012 the maturities. And any general comments about, mortgage maturities how do you feel about the amount of values, etcetera. And then I guess looking at the converts as well, which also mature of that.

Robert McCadden

Think we’ve talked on previous quarterly calls about our view that over the near-term of ‘11 and ‘12 we would expect to see net proceeds coming out of our mortgage financings, refinancing. So, we still feel optimistic the market is better every day for financing, so our view that gets a little rosier with these passing day.

With respect to converts, we clearly have that in mind – I’m going to think that we’ve – I think talked about it as well with some investors is the fact that we’ve allowed the credit facility – our revolving credit facility balance to remain untapped to give us a, an ability to warehouse the converts as they come due in May 2012. Obviously, part of that day we’ll be considering other capital markets alternatives to provide the liquidity for the converts. But as a backup we still have the availability under credit facility if necessary to refinance us on a short-term basis.

Michael Mueller – JPMorgan

Okay, ideally is that something you’d like to pay-down with some form of equity either it’s asset sales or equity or something that you’re contemplating replacing with a similar instrument?

Joseph Coradino

It could be equity or equity like instrument like the existing convertible debt.

Michael Mueller – JPMorgan

Okay, okay. Thank you.

Operator

Thank you. The next question is a follow up from the like of Michael Bilerman with Citi. Please go ahead.

Michael Bilerman – Citi

Okay thanks, I mean Ron there, I mean if, do you think 8.5 and 9 sort of cap rates are up in the set pricing if you’re buying?

Joseph Coradino

I don’t think that it’s a first rate again to that level of specificity.

Michael Bilerman – Citi

I may ask it a different way, your stock base today and if they doesn’t imply cap, which is higher than all the peers and would appear to be much higher than where like you to trade in the private market. Why aren’t you management partnering with private equity or selling your assets and buying back stock more even putting the company out for sale at this valuation?

Joseph Coradino

Can you repeat the question please?

Michael Bilerman – Citi

Your stock trading getting, doesn’t imply cap.

Joseph Coradino

Yeah.

Michael Bilerman – Citi

Which would appear to be meaningfully higher than the peer group and it would appear to us be higher than where transactions, the marketplaces are likely to come out. So, why wouldn’t you be trying to sell asset impressively or even partnering with the private equity and institutional capital that’s looking at asset to either sell assets and buyback your stock or put the company up for sale completely to narrow that gap of value?

Joseph Coradino

Yes we were selling assets – first of all, we think it’s in our best interest strategically to see how the transactions that are in the marketplace trades. This will inform us as to what real valuations are, right now the talk about valuations is mostly hypothetical. There is not enough trading activity in the property that’s really determined what true value is. There is a number of portfolios on the marketplace, when they trade it will be informative as to what our next move should be.

Michael Bilerman – Citi

Shouldn’t you be, I mean if there is a lot of capital that is looking to invest in the mall sections, you’ll be engaging with these capital partners in some way to narrow the evaluation gap that exist in your stock by stuffing the asset or looking at a corporate type of transaction?

Joseph Coradino

We’re here and we talk to people, we talk to people all the time, but again there is a lot of talk about all the capital on marketplaces, a lot of talk about all the deals that are getting done. We haven’t seen a lot of deals get done yet, and we haven’t seen where the pricing is established. So until there is facts rather than talk which is all a big hypothetical. And it’s not like we’re not available for conversations we meet with investors and capital first is all the time.

Michael Bilerman – Citi

Okay. Thank you.

Operator

Thank you. The next question is from the line of Ben Yang with Keefe, Bruyette & Woods. Please go ahead.

Benjamin Yang – Keeefe, Bruyette & Woods

Yeah hi, good afternoon. Just come back to next question on the credit facility expansion. Once just, PREIT just announced plans to extend their facility about a year and a half before that maturity, and obviously it included extended term, lower rate, higher borrowing capacity, and also step to unsecured the lines. And can you just offer maybe your expectation about what your line expansion might look like and whether there is a path for you guys to also maybe unsecured your lines, when you redo it?

Joseph Coradino

At the moment, we’re not in a position to talk about, the discussions that we’re having with our banks. But at an appropriate time, we’ll be glad to discuss it in detail. At the moment we’re in discussions with all of these banks.

Benjamin Yang – Keeefe, Bruyette & Woods

Great. Thank you.

Operator

Thank you. There are no further questions at this time. I’d like to turn it back over to Mr. Ron Rubin for any closing remarks.

Ronald Rubin

I want to thank everybody for joining with us this afternoon. And thank you also for your continued support. We’re looking forward to the ICSC convention next month and we invite you to stop by our exhibit. Our next earnings conference call will be in July for our second quarter results. Thank you again. And have a good evening.

Operator

Ladies and gentlemen, this does conclude conference call. You may now disconnect. And thank you for your participation.

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