PREIT reports 5.3% decline in Q3 net operating income

Both net operating income and mall occupancy declined at PREIT properties in the third quarter, though the Philadelphia-based owner operator of super-regional malls looked forward to new openings covering 186,000 sq. ft. in its quarterly report.

 Same-store NOI decreased 5.3% compared to last year’s third quarter, though PREIT noted that the drop would have been 4.1% if the Whole Foods at its Plymouth Meeting Mall in the Philadelphia suburbs were excluded from the computation.

Last February, PREIT sold the parcel of the facility containing Whole Foods to Agee Realty for $27 million. Since the beginning of 2023, the Company sold assets generating just over $30 million in gross proceeds.

The company’s core mall total occupancy decreased by 70 basis points to 93.6% quarter over quarter. Core mall non-anchor leased space was 92.1%, a total that is 180 basis points higher than occupied space when including executed leases for future occupancy.

During the rolling 12-month period ended Sept. 30, core mall sales dipped to $545 per sq. ft. compared to the $592 average recorded during the previous 12 months.

Funds from operations decreased in the three months ended September 30, 2023 compared to the prior year period primarily due to higher interest expense.

Significant openings in PREIT’s portfolio during the quarter included the Lego Discovery Center at Springfield Town Center in Virginia and a self-storage facility that occupies previously unused, below-grade space at the Mall at Prince George’s in Maryland.

At Moorestown Mall in New Jersey, construction is underway for a Cooper University Healthcare facility and a 375-unit Pearl apartment development.

"During the quarter, we welcomed new and diverse tenants across our portfolio and look forward to additional openings as we head into the holiday season," said PREIT Chairman and CEO Joseph F. Coradino.