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Hello, and thank you for standing by. My name is Regina, and I will be your conference operator today. At this time, I would like to welcome everyone to the Preet First Quarter 2023 Earnings Conference Call. All lines have been placed on mute to prevent any background noise. I will now turn the conference over to Preet to begin.

Good morning, and thank you all for joining us for Preet's First Quarter 2023 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, May 4, 2023, 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 SAIT Technologies to offer an opportunity for shareholders to ask questions of management. During this call, management will answer questions received over this Q&A platform. Members of management on the call today are Joe Corradino, Preet's Chairman and CEO, and Mario Ventresco, CFO.

Joe? Thank you, Heather. Good morning, and thank you all for joining us. We're pleased to report a strong start to 2023 with growth in NOI, occupancy, and sales. The consumer continues to shop, dine, and be entertained at our properties despite ongoing economic challenges. As we advance our delivery of different uses and new-to-market tenants, we expect to continue to drive consumer interest, increasing traffic, sales, and NOI. In fact, same-store NOI, excluding lease termination revenue, increased 5.7% for the quarter. Core mall total occupancy increased to 93.5%, and core mall total lease space sits at 94.5% when including executed new leases slated for future occupancy, demonstrating the rapid pace of leasing activity. Year to date, traffic is up 7%, driving comparable sales to $603 per square foot, squelching concerns over consumer spending. Average renewal spreads were strong at 5.6%, demonstrating a shift in pricing power to the landlord. Currently, we have a pipeline of over 258,000 square feet of leases signed for future occupancy. representing over 7.2 million in annualized future rents so far this year we've signed over 140 000 square feet of new leases our strong portfolio of real estate continues to attract tenants and customers with new opportunities to create value for over a decade we focused on expanding our offerings to go well beyond traditional mall tenancy including leisure and entertainment options, as well as tenants that have traditionally located in open-air centers, in addition to experiences that have served the broader community, like grocers and health care. This year, we signed Burlington at Springfield Town Center, who will join Lego Discovery Center in transforming Springfield Town Center into a vibrant multi-use hub, becoming the go-to family entertainment destination in the dc market with over 30 percent of springfield town center space dedicated to entertainment and dining preet is creating the ultimate entertainment destination for the dc market adding to this plan preet is planning to incorporate apartments and a hotel on site further enhancing its appeal earlier this week we announced that alta will join the lineup at Dartmouth Mall, advancing its position as the leading enclosed mall in the region, following the closure of two of our competing properties. ALTA will round out the former Sears location, which is now home to Burlington and Aldi, highlighting our ability to replace outdated department stores with modern, appealing tenants. In particular, the beauty segment has proven to be extremely resilient and growing with over 70% of consumers saying they don't plan to cut back on beauty spending. In keeping with the theme of offering more to our communities and bringing in non-traditional uses, we're looking forward to welcoming Meritus Health in 25,000 square feet at Valley Mall. They join over 200,000 square feet of healthcare facilities in Preet's portfolio, including Cooper University Healthcare at Morristown, expected to open this September, and Mainline Health at Exton Square. At Cherry Hill Mall, Brooks Brothers will make a return to the property, joining previously announced tenants set to open or having recently opened, including Levi's, Warby Parco, Psycho Bunny, Uniqlo, and Eddie V's. Throughout the portfolio, we have 232,000 square feet of space signed for anticipated openings this year. Looking ahead, we continue to see opportunity to improve and create value at our properties, including new tenant introductions and further multifamily opportunities. In 2022, the company sold assets generating over $113 million in gross proceeds and has applied these proceeds and excess cash from operations to pay down debt by over 157 million. Earlier this year, we executed on the sale of Whole Foods at Plymouth Meeting Mall, which was completed in January. Coupled with excess cash, this enabled us to pay down debt by 29 million through the end of March this year. We continue to pursue entitlements and approvals for the multifamily properties with the expectation to continue to move these to sale. Our credit facilities with a balance of 996 million as of March 31st, 2023 mature on December 10th, 2023. And work continues to address the upcoming maturity by pursuing all available alternatives, including refinancing, selling assets, and engaging in discussions with lenders. As we survey the economic landscape, we believe we have positioned our portfolio well to continue to thrive during periods of economic uncertainty. Our diverse tenancy offers shoppers an array of products, services, and experience at various price points that drive repeat visits. We have sold off underperforming, problematic assets and are experiencing continued demand for space with experts predicting openings outpacing store closings again this year. Preet has been ahead of the curve in reimagining the enclosed mall shopping experience as one of the earliest adopters of department store replacement efforts, replacing 20 department stores with over 40 different uses, which we anticipate will continue to entice the modern consumer offering a broad diversity that prevails irrespective of economic conditions, demonstrated by recent traffic and sales growth. With that, I'm happy to turn it over to Mario to review our results.

Thanks, Joe. From an operational perspective, the business is performing well, reflecting improvement in same-store NOI growth, tenant sales, collections, leasing activity, and liquidity. First quarter, same-store NOI increased 4.5% during the quarter, or 5.7% when excluding the impact of lease terminations. These strong results were driven primarily by increases in rental revenue, net utility, and ancillary income. Liquidity continues to track ahead of our business plan at approximately $117 million. Total occupancy stands at 93.5%, which is a 90 basis point increase over the first quarter of last year. Leasing volume is strong and compares favorably to last year. During the quarter, we signed over 400,000 square feet of new and renewal leases. We currently have a pipeline of over 250,000 square feet signed for future occupancy, which represents over $7.2 million in annualized future rents. Comparable sales ended the first quarter at $603 per square foot with nine of 17 properties demonstrating increases. This morning, we reported first quarter 2023 NAREID FFO and FFO as adjusted of negative $3.05 per share. The primary drivers of the variance to 2022 actuals for the first quarter were a $2.4 million same-store NOI increase offset by a decrease of $1.8 million in non-same-store NOI resulting from the sale of Cumberland Mall and Gloucester Premium Outlets in 2022. Interest expense increased by $12.2 million, driven primarily by higher weighted average interest rates as compared to the first quarter of last year. While we have experienced an elevated number of bankruptcies so far this year, affecting $1.7 million in revenue and 46,000 square feet, we've remained compliant with our credit facility covenants and are pleased by the continued tenant interest in our properties. It is notable that earlier this week, we signed an extension of the mortgage loan secured by Cherry Hill Mall through December 1st, 2023, with an additional five-month option that is exercisable, subject to satisfaction of certain conditions. The company's credit facilities, with a balance of $996 million as of March 31, 2023, mature on December 10, 2023. The company is working to address the upcoming maturity by pursuing all available alternatives, including refinancing, selling assets, and engaging in discussions with lenders. With that, we will turn to the questions we received on our Q&A platform.

Thanks, Mario. The first question is, what is the current status of the credit markets for mall real estate? Can you continue amending and extending loan maturities? Will Preet be able to extend, renegotiate, or replace its first and second lien credit facilities coming due this December?

It's no secret that the credit markets are extremely challenging. particularly for enclosed malls. As we announced in our earnings release and discussed in our prepared remarks, we're pleased that we've successfully extended the mortgage loan secured by Cherry Hill Mall and now are focused on our remaining near-term maturities.

What progress are you making on asset and parcel sales? Are you trying to sell Xfin Square? Do you have any more parcels that you can sell to Four Corners Property Trust?

We have continued to evaluate opportunities for asset sales, including Exeter Square and Plymouth Meeting Malls, as well as our out parcels. However, we are not prepared to disclose details at this time.

While my strong preference is to keep Preet's portfolio of malls as intact as possible, if it turns out that the best way to maximize shareholder value is to sell the most valuable properties or all of the properties, will you hesitate to do that? Along these lines, what is your plan going forward, and is there a five-year plan in place when the market changes?

Since the beginning of 2022, we've sold over $140 million in assets and utilized excess cash to pay down $190 million in debt, secured the extension of our credit facilities maturity date, and satisfied the re-margin requirements on Fashion District Philadelphia. As we have previously noted, our plan is to spend the coming months exploring all possible options available to the company as our credit facilities matures, including refinancing, selling assets, and engaging in discussions with lenders. We have demonstrated through our disposition history that we are open to selling assets, and we continue to work towards finalizing the sale of our multifamily land, and are exploring all possible options with our investment advisor. With that, I'll thank you all for joining us today and have a great day.

That does conclude today's conference. Thank you all for joining.