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Marketing Presentation 20 June 06 2010


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Marketing Presentation 20 June 06 2010

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  2. 2. Company Background • PREIT is the oldest equity REIT in existence with over 50 years of Brand Equity and organizational experience. It manages 34 million square feet of commercial property. Its competencies span the Retail, Office and Multi-Family Sectors of Commercial Real Estate and its partnerships span the other sectors as well. • In its core markets, PREIT’s name is synonymous with Best Demonstrated Practices and Institutional Grade Commercial Real Estate leadership across property types and business functions. • PREIT Capital Advisors brings together in one service platform the extensive commercial real estate capabilities of PREIT - a leading NYSE traded REIT, the banking and lending experience of Christophe Terlizzi, the corporate finance and private equity experience of Daniel Dean. • As a result, PREIT Capital Advisors is uniquely positioned to provide Portfolio Advisory Services to Lending Institutions facing distress with commercial real estate loans and or properties. 2
  3. 3. PREIT Capital Advisors (PCA) • PCA’ s mission is to resourcefully help lending institutions and institutional investors address and resolve their most complex commercial real estate issues and problems. • PCA’ s geographic focus is on Mid-Atlantic and Northeastern markets where it can leverage the significant scale, marketing presence and infrastructure of Pennsylvania Real Estate Investment Trust (Symbol: PEI -- NYSE). • PCA blends real estate capital markets expertise, principal investing and restructuring experience with corporate strategic planning and workout expertise to achieve superior results for its clients. • PCA’ s principal/developer/owner/operator experience across multiple property types creates a broad and deep repository of property and market level real estate capabilities that, when combined with scale driven purchasing power, allows PCA to deliver immediate savings for its clients. 3
  4. 4. PCA Core Competencies • Capital Markets Sophistication and Regulatory Awareness • Property Development and Construction Expertise • Property Management and Leasing Expertise • Asset Management and Reporting Expertise • Property Recapture and Integration Expertise • Conservator and Receiver Expertise • In-House Expertise with Retail, Office, Industrial and Multi-Family • Expertise with Residential Land Development, For Sale Housing and Hospitality via Strategic Partnerships with “Best in Class” Providers 4
  5. 5. Click to zoom PREIT Capital Advisors is geographically focused in markets where it has an established presence, broad and deep relationships and reasonable economies of scale.
  6. 6. “Extraordinary Times Call for Extraordinary Measures” Strategy & Restructuring Asset Property Management Management Capital Markets Expertise PCA’s platform is the natural extension of the Company’s owner/operator heritage, super-regional realty expertise, capital markets presence, and corporate infrastructure. It is positioned to maximize value and minimize impairment in the midst of the continued erosion in market conditions for commercial real estate. 6
  7. 7. For Unmanaged Assets “Time Is The Enemy” – The PCA Difference Recovery % PCA Distressed Asset Services Time Asset Optimization 7
  8. 8. PCA Process Asset/Portfolio Evaluation Longer Term Repositioning/ Near Term Disposition Medium Term Hold Redevelopment Capital Markets/ Asset Management Asset Management Asset Sale Property Capital Markets/ Management/Development Asset Sale Capital Markets/ Asset Sale 8
  9. 9. Managing the Distressed Asset’s Lifecycle PCA takes a broad, systematic and entrepreneurial approach to dealing with complex property level issues, recognizing and acting on opportunity, minimizing risk and maximizing value. Its hallmark is its ability to position properties optimally for sale. Minimize Write-downs and Maximize Proceeds Restructuring/ Decision Asset Management/ Redevelopment/ Support Optimization Repositioning • Assessment • Physical Recapture • Leasing • Evaluation/Re-Appraisal • Asset Management • Construction • Budgeting/Forecasting • Property Management • Development • Reporting • Facilities Management • Financing/Marketing/Disposition 9
  10. 10. Why now? • The erosion of market conditions for Commercial Real Estate is projected to intensify and pose increasingly complex challenges to lenders, investors and servicers, potentially often overwhelming their capacity to resolve defaults and recover their investments. • Finding and managing qualified experts to address issues using a “piece meal” approach is risky, costly and time consuming, often leading to management intensive solutions that by virtue of their fragmentation are less likely to achieve satisfactory results. • Single solution outsourcing with PCA provides: • Basis for Effective Cost/Expense Management • Ability to Leverage Your Organizational Resources • Transparency • Optionality • Removal of Execution Risk 10
  11. 11. Process Recap Repor Evaluation and Strategy ting Assessment and Recommendations Execu and (Triage) tion Planning Monit oring 11
  12. 12. Sample Case Studies - Retail Property name Challenges Accomplishments Relevance Cherry Hill Mall • To restore and solidify property’s • Replaced vacated department store. • Drove overall sales/SF in complex Cherry Hill, NJ premier Southern New Jersey up by nearly $100. • Addressed aging infrastructure. Regional Mall location and reputation. • Received national recognition for • Responded to increased competition. • To reverse negative trend lines design. on all of property’s fundamentals. • Created super-regional retail fortress • Drove “waiting list” tenant demand for and most significant shopping node in property. region. • Achieved 100% of pro-forma rents • Received entitlements to add a during historically challenged time in Nordstrom’s and 90,000SF of new retail sector. best-in-class restaurant and fashion retail. Plymouth Meeting Mall • To differentiate a very well located, • Created an open-air food and • Demolition and re-configuration of Plymouth Meeting, PA but poorly merchandised property. entertainment destination in excess of 100,000SF of vacancy generated in Regional Mall 100,000SF with national brands such excess of $80 million of incremental • To re-configure and re- as Dave & Busters, Whole Foods and net sales. merchandise property in the face PF Chang’s. of very stiff competition and an • Remerchandising served as catalyst uncooperative municipality. to absorb all of the vacancy in balance of property. Mall at Prince Georges •Significantly un-utilized land parcel • Added Target as anchor tenant in • Created over $100 million in Hyattsville, MD and unrealized Leasing Upsides 2004. incremental value in time for Regional Mall/ refinancing of property at par in 2008. • Added Marshall’s and Ross Dress for Power Center Less in locations that were perceived 12 to be “the back of the mall”.
  13. 13. Sample Case Studies - Office Property name Challenges Accomplishments Relevance Mellon Banks Center • Significant soils based • Relocated Greyhound to new site. • Project completed on budget. Philadelphia, PA environmental issues on the • In JV with Equitable, constructed and • Building was 100% leased at opening. Central Business District property. leased 54 story,1.3 million SF Class A Office Tower • Building had highest rental structure of • Low level use as Greyhound Bus office tower. any office building in the City. Terminal. • At the time was premier building in Philadelphia. 40 Monument Road • Constrictive parking code • Utilized JV structure with CBS. • Developed HQ office in strong Bala Cynwyd, PA prevented high density suburban office market at high rents. • Achieved parking variance and Suburban Office Building development. negotiated cross easements with • Excellent creditworthiness of tenant • Land Owner/JV partner needed to adjoining landowner to facilitate high facilitated high permanent loan accomplish structure to defer tax density development. advance rate and enabled CBS’ consequences. goals in entering JV. • Karr Barth, a division of Equitable, occupied majority of building.
  14. 14. Sample Case Studies – Mixed Use Property name Challenges Accomplishments Relevance Voorhees Town Center • To reduce significant retail • In JV with local multi-family developer, • Converted 250,000SF of largely Voorhees, NJ overcapacity and re-deploy space demolished 250,000SF of vacant vacant mall space into 475 multi-family Mixed-use, retail, to other profitable uses. retail space. units, a 48,000SF100% leased HQ residential, office office building, and 100,000SF of • To meet the above challenge with • Constructed mixed-use project vibrant street retail. the support of municipal and consisting of apartments, office, street resident concerns. retail and traditional mall uses. 801 Market Street • To rehabilitate and modernize a • Completed $80MM historic renovation • Delivered new office and retail space. Philadelphia, PA vacant historic building into modern ahead of schedule and under budget, • Attracted State of Pennsylvania as Adaptive Re-use space usage while preserving its achieved LEED certification, and lead office tenant, paying market rents historic features. obtained historic tax credits. for 220,000SF of leased space.
  15. 15. CBD Office – Viewpoint Mellon Bank Center 1735 Market Street Philadelphia, PA Floors: 53 Class: A Building Area: 1,327,689 SF Site area: 55,000 SF Lobby retail: 15,189 SF Concourse retail: 23,975 SF 15
  16. 16. Suburban Development – Viewpoint 40 Monument Road 40 Monument Road Bala Cynwyd, PA Floors: 5 Class: A Bldg Area: 80,463 SF Site area: 208,008 SF 16
  17. 17. Adaptive Re-Use - Viewpoint 801 Market Street 801 Market Street Philadelphia, PA Floors: 13 Class: A Building Area: 382,487 SF 17
  18. 18. PREIT Capital Advisors Team Christophe Terlizzi Chris Terlizzi’s career in commercial banking and real estate lending spans more than 37 years and includes executive leadership positions at Citizens Bank, Fleet Bank and Fidelity Bank. He is expert at building and operating commercial real estate lending platforms, specializing in project specific transactions as well as enterprise level debt capitalization. As a senior banking executive, Chris has had full P & L responsibility for over 15 years in enterprises that have topped $3.5 billion in CRE assets with net earnings of more than $80 million. In this capacity, he has been responsible for managing business origination, underwriting, approval, closing, servicing, restructuring, workouts, policy, compliance and portfolio management with a focus on the Mid Atlantic region. Chris is the current chairman of Urban Land Institute (ULI) Philadelphia, a non-profit education and research institute whose mission is to provide responsible leadership in the use of land. ULI Philadelphia encompasses more than 1,100 members throughout Eastern and Central Pennsylvania, the southern half of New Jersey and the State of Delaware. In addition, he serves on the boards of Central Philadelphia Development Corporation, Center City District, 10,000 Friends of Pennsylvania and the Preservation Alliance of Greater Philadelphia. He is a graduate of St. Joseph’s University where he earned a B.S. in Business Administration. . 18
  19. 19. PREIT Capital Advisors Team Daniel Dean Dan Dean is a financial and operating executive with substantial experience in commercial real estate, multi-unit restaurant and retail, franchising, restructurings, and private equity. His experience has spanned financial, operating and corporate governance roles in public and private enterprises and has included workouts and corporate finance roles involving, among other things, underwriting and structuring of debt and equity investments. He has been intimately involved in the development, implementation and management of organizational initiatives, conflict resolution, workouts and strategic and tactical plans. Mr. Dean was a founder of United Enterprise Fund, L.P. (UEF), a fund fully dedicated to the franchise restaurant industry. There, in addition to his role as portfolio manager, he has played interim operating roles and has held leadership positions on several Boards of Directors. He started his 25-year business career in retail and residential real estate acquisitions and mortgage finance before joining PepsiCo, Inc.’s renowned PepsiCo Restaurant Group, where he was involved in strategic planning, corporate finance, and workouts. While at PepsiCo, he worked with operations management to execute turnarounds at underperforming units. Dan earned a BA in English Literature from Columbia College in 1983, and an MBA in Marketing & Finance from The Wharton School at the University of Pennsylvania in 1994. . 19
  20. 20. PREIT Capital Advisors Team Timothy Rubin During his 22 year tenure at PREIT, Tim Rubin has advanced through several positions of increasing responsibility within the organization. Presently he holds the position of Executive Vice President of Leasing, where his primary responsibilities include the oversight of all department store, anchor and off-mall leasing within PREIT’s 34 million square foot retail portfolio across 13 states. Prior to this, he managed the Leasing Department's sales force of 30 people and his primary responsibility was the delivery of over $500 million of total annual revenue through leasing activity that generated, on average, one million square feet per year. While serving as the head of leasing, Tim played an instrumental role in the successful execution of PREIT’s $1 billion portfolio redevelopment initiative, highlights of which include the redevelopments of Cherry Hill Mall, Plymouth Meeting Mall, Patrick Henry Mall and Voorhees Town Center. He has also held several positions in the organization related to development and redevelopment in which he has been responsible for the coordination and completion of projects ranging from the J C Penney addition at Beaver Valley Mall outside of Pittsburgh, to the expansion and renovation of Cumberland Mall in Vineland, NJ. Mr. Rubin earned a Masters of Business Administration from Temple University, and a Bachelor of Arts degree from Lafayette College. He is a member of the International Council of Shopping Centers (ICSC), the National Retail Federation and holds a Real Estate Sales License in the state of Pennsylvania. 20
  21. 21. PREIT Capital Advisors Team Douglas Grayson Doug Grayson joined PREIT in 1990 as a development director and asset manager. In 1998, he was promoted to executive vice president with the responsibility of running the Development Division of the company. His primary responsibility is to manage all of the company’s development activities, which includes the supervision of the professional staff engaged in the responsibilities of site acquisition, feasibility assessment and analysis, planning, permitting and implementing prospective development projects. Before coming to PREIT he worked in a development capacity for The CoreGroup, a Philadelphia based real estate company with projects in the Delaware Valley and Puerto Rico. Prior to the CoreGroup, Mr. Grayson co-founded a micro-computing consulting firm in Austin, TX. He also worked as a manager for Westin Hotels. Mr. Grayson earned a BA in Economics from the University of Pennsylvania in 1980 and an MBA from the University of Texas at Austin in 1986. 21
  22. 22. PREIT Capital Advisors Team Mario Ventresca Mario Ventresca is Senior Vice President of Asset Management at PREIT, overseeing all related activities for the company’s 34 million square foot portfolio. Mr. Ventresca joined PREIT in 1994 as a Financial Analyst in the Acquisitions group, was promoted in 2000 to Vice President of Acquisitions and later in 2000 assumed the role of Vice President with the responsibility for the Asset Management group of the organization. Prior to his employ with PREIT, he worked for Kravco Company, a King of Prussia, Pennsylvania-based owner and manager of retail real estate. He has served as Dean of the School of Finance, Accounting and Lease Administration for the International Council of Shopping Centers University of Shopping Centers, and regularly leads ICSC roundtables and accreditation courses. Mr. Ventresca earned a Bachelors of Business Administration from Temple University. . 22
  23. 23. PREIT Capital Advisors Team Scott Petrie Scott Petrie has been responsible for the entire scope of general management functions for the PREIT portfolio of shopping centers since 1998. While at PREIT’s predecessor company, Mr. Petrie held the position of Director of Operations for The Rubin-Strouse Greenberg Value Oriented Retail Group. In that capacity, he was responsible for all property management functions of the company’s 7.5 million square foot retail portfolio. Prior to his employ with Strouse Greenberg, he was employed by The Edward J. DeBartolo Corporation as a General Manager, in which role he oversaw the management of approximately 2.8 million square feet of commercial space. Mr. Petrie holds a Bachelor of Arts Degree from the University of Dayton, has the designation of Senior Certified Shopping Center Manager (SCSM) from the International Council of Shopping Centers, and maintains real estate licenses in both Pennsylvania and North Carolina. . 23