Construction is underway on a healthcare facility and 375 apartments at Moorestown Mall in New Jersey.
PREIT’s program of paring down its properties to core assets and redeveloping properties with residences and medical facilities has put the Philadelphia-based mall owner on a positive pace, it claims in its fourth quarter report.
Total occupancy across its core mall portfolio increased 150 basis points to 94.8% in the period and non-anchor occupancy rose by 240 basis points to 92.1% when compared to full-year 2022.
For the rolling 12-month period ended on December 21, 2022, core mall comparable sales grew to $596 per sq. ft., a $60 jump from full-year 2019. PREIT also reported that its upward sales pace continued into January with a rise to $606 per sq. ft.
Its net operating income excluding lease termination, however, decreased by 7.7% in the quarter, driven by outsized credit recoveries in 2021 and an increase in operating costs, according to the report.
PREIT reported that its funds from operations decreased in the quarter due to the lower net operating income from same-store properties as a result of the sale of Gloucester Premium Outlets and Cumberland Mall in Vineland, N.J —as well as higher interest expense.
Cumberland Mall sold for $44.6 million and facilitated PREIT’s repayment of its $39 million mortgage loan balance. The fourth quarter also saw the company sell a former department store space at Valley View Mall in LaCrosse, Wis.
PREIT reported that leases for 337,000 sq. ft. of GLA have been signed for future openings that add up to $7.4 million in annual rent. Construction is underway on a self-storage facility at Mall at Prince George's in Hyattsville, Md., and on a Cooper University Healthcare facility and a 375-unit apartment development at Moorestown Mall in New Jersey.
“We are pleased with what the team accomplished in delivering new-to-portfolio tenants that include diverse new uses and raising capital through opportunistic asset sales," said PREIT CEO Joseph F. Coradino. "In spite of the macroeconomic pressures, the prognosis for retail remains positive. The consumer is embracing the new experiences we are offering."