Pennsylvania Real Estate Investment Trust

Good morning. My name is Dennis, and I will be your conference operator today. At this time, I would like to welcome everyone to the Preet second quarter 2022 earnings call. All lines have been placed on mute to prevent any background noise. After the speaker's remarks, there will be a question and answer session. I would now like to turn the conference over to Heather Crowell. Please go ahead.

Thank you. Good morning, and thank you all for joining us for Preet's second quarter 2022 earnings call. During this call, we will make certain forward-looking statements within the meaning of federal securities laws. These statements relate to expectations, beliefs, projections, trends, and other matters that are not historical facts and are subject to risks and uncertainties that might affect future events or results. Descriptions of these risks are set forth in the company's SEC filings. Statements that Preet makes today might be accurate only as of today, August 9, 2022, and Preet makes no undertaking to update any such statements. Also, certain non-GAAP measures will be discussed. Preet has included reconciliations of such measures to the comparable gap measures in its earnings release and other documents filed with the SEC. We continue to partner with SAFE Technologies to offer an opportunity for any shareholder to ask questions of management. During this call, management will answer questions received over this Q&A platform. We thank our investor base for their continued engagement in this process. Members of management on the call today are Joe Cordero, Preet's Chairman and CEO, and Mario Ventresca, CFO. Joe?

Thank you, Heather. Good morning, everyone. Having just celebrated 10 years as CEO, as I now reflect on how much our team has accomplished through numerous market fluctuations, we're now executing on our plan to reduce debt and increase common and preferred equity valuations. This is being accomplished through a strategic focus on operational performance, asset sales, mortgage refinancing, exercising our credit facility extension and addressing the upcoming fashion district remargin payment. We've positioned ourselves to execute this strategy over the past ten years through a substantial reshaping of our portfolio. We sold obsolete assets with limited future prospects and proactively replaced anchors with a productive mix of tenants that spanned a variety of new, exciting uses. As a result of these efforts, our properties have emerged victorious in the face of cyclical economic changes. It's noteworthy that tenant sales are growing, traffic is ahead of last year and 2019, and leasing activity remains robust, with occupancy improving by nearly 5%, all of which improves the value of our properties. We have identified additional asset sales that will allow us to further improve our liquidity position and continue to reduce our debt. It is noteworthy that we remain in compliance with all of our debt covenants by a significant margin. We're delivering strong results in the face of inflationary pressures impacting our customers and our tenants. We've executed 346,000 square feet of new leases so far this year. We are evolving our tenant mix, driving traffic, yielding increased tenant sales, provides the ability to drive rents. To put this into context, I thought we would highlight some properties and the success of our asset-specific strategies deployed with each market's unique characteristics in mind. Capital City Mall in Harrisburg, Pennsylvania, for example, one of our shining stars in the winner-take-all category, where two competitive malls have become obsolete, resulting in sharply decreased retail inventory. We have the only fashion department store in 50-plus miles in Macy's and the only Dave & Buster's in over 75 miles. Sales have grown over 20% from $453 per square foot in 2019 to $542 per square foot today. We've been able to leverage this position to attract expanding retailers, to open their only locations in Harrisburg, including Rosen Remington, Lovisa, and Box Lunch. At Willow Grove Park, we have over 55,000 square feet of new stores opening, including new to portfolio and new to region tenants, Box Lunch, Rosen Remington, and JD Sports. Sales at this property are an impressive $771 per square foot. As compared to June 30th of last year, we've increased our non-anchor occupancy by 620 basis points to 94.6%. And we'll further evolve this asset with the opening of Tilted 10, bringing a family entertainment center featuring laser tag, bowling, mini golf, virtual reality, pinball, and over 200 games and attractions to the property, which will extend dwell time. At Springfield Town Center, were underway with Lego Discovery Center, expected to open next year, the first of its new prototype in the United States. Another step in transforming this property into a vibrant multi-use hub, creating the preeminent family entertainment destination in the D.C. market. Morristown Mall is another great example of reshaping our traditional mall assets, creating value for stakeholders. In addition, to a dining and entertainment lineup and fitness offerings, we have transformed Macy's into a value retail hub, including HomeSense, Sierra, Five Below, and Michaels. Now, Cooper University Healthcare is under construction with its outpatient facility, which is expected to open its initial phase in the second half of 2023. We're also pleased to have closed on the sale of land for 375 multifamily units. We have led the way in diversifying our tenant base, resulting in broadening the customer appeal of our properties. In the past decade, we've increased the space dedicated to off-price and fast fashion by 250%, providing more cost-efficient options for our customers during periods of rising costs. We believe this work positions the portfolio well to navigate evolving economic conditions. As we look ahead, we're turning our attention to options to refinance our credit facility at the end of 2023. Toward that end, we continue to raise capital through asset sales, which is a top priority. Since our last call, we executed on the sale of our interest in Gloucester premium outlets, multifamily land at Moorestown, and several out parcels. We've applied asset sale proceeds and excess cash from operations To pay down debt by $82 million, our liquidity position as of the end of the quarter at $128 million is stronger than it has been since the onset of the pandemic. Our immediate priority is achieving our credit facility extension. As of June 30, 2022, we're in compliance with the liquidity and corporate debt yield requirements underlying the extension, are in process of conducting the required appraisals. We have an additional 200 million of asset sales in progress and remain intensely focused on bringing these to closure. We expect to execute on the sale of multifamily and hotel land at Springfield Town Center this year. As we move to securing entitlements and closing on our first phase of multifamily land sales, we are bringing phase two to market and expect to be able to execute on this more expeditiously considering our hard-foot entitlements and tenant approvals. This should generate an additional $100 million in proceeds. On a year-to-date basis, same-star NRI and FFO are showing growth. Traffic is strong heading into the back-to-school season, up nearly 3% over last year. Renewal spreads are positive. and we have approximately 6 million in revenue yet to commence. With occupancy stabilizing and strong sales, we believe we can further drive rents, enhancing portfolio value. Now I'll turn it over to Mario to review our financial results.