PREIT defends its decision to stand with its current board

This week, seven board members of Philadelphia-based mall owner PREIT tendered resignations due to a lack of sufficient shareholder votes to retain their standing--then voted to reject all seven resignations.

Christopher Swann and Kenneth Hart-- “independent trustees” on the board representing preferred shareholders-- received enough votes to remain and sent a letter to the company advising that the seven step down.

The seven members submitting “unofficial” resignations were chairman and CEO Joseph Coradino, Temple University Interim president JoAnne Epps, George Alburger, Michael DeMarco, Mark Pasquerilla, Charles Pizzi, and John Roberts.

Yesterday PREIT responded to Swann and Hart that their letter created a “misleading narrative” concerning the state of the company by leaving out critical facts--one being an opinion from outside counsel approving of the process used by the seven members’ response to the shareholder vote.

“You were elected by an entirely separate class of shareholders whose rights and preferences are not always aligned with the Common Shareholders and who have diverging and conflicting interests on various matters,” said PREIT’s letter. “The Board recognizes the importance of the Common Shareholder vote and is taking appropriate action.”

The letter added that both Swann and Hart participated in the discussion about voting guidelines without raising objections.

PREIT filed for Chapter 11 bankruptcy protection in 2020 and emerged from it within a month. Under the direction of Coradino, the company began disposing of several underperforming malls long before the pandemic hit. In the past year and a half, it has sold $140 million in properties to help pay down $184 million in debt, according to a statement issued by Coradino.

In 2022, the company won extensions for $300 million in debt on its highest-performing property, Cherry Hill Mall in Cherry Hill, N.J. It reports that it has replaced 19 department stores in its portfolio with more than 40 different uses.

PREIT earlier this year reported that its occupancy rate hit 95% portfolio-wide and that its average sales per sq. ft. were $60 higher than they were in 2019.

It was also one of the first mall owners to add residential units and medical facilities to its sites. At its Moorestown Mall in New Jersey, Cooper University Health will be filling an old Sears space and 375 apartments are under construction.