On November 30, 2012, a subsidiary of Pennsylvania Real Estate Investment Trust (the "Company") entered into a purchase and sale agreement with Rubenstein Real Estate Co., LC (Overland Park, Kansas), for the sale of the Company's interests in Christiana Retail Center, a 300,000 square foot power center located in Newark, Delaware. The purchase price is $75.0 million, subject to adjustments and excluding closing costs. The mortgage loan secured by this property had a balance of $49.9 million as of September 30, 2012. Under the agreement, the buyer will be assuming the existing mortgage loan, and the buyer will pay to the seller the purchase price less the amount of the then unpaid balance of the mortgage loan. The Company intends to use the net proceeds of the sale, after closing costs, to repay a portion of the borrowings under the 2010 Credit Facility and for general corporate purposes. The transaction is expected to be completed in the first quarter of 2013.
The purchase and sale agreement contains representations and warranties by the seller customary for transactions of this nature, contains customary buyer due diligence provisions, and contains other customary terms and conditions, including customary closing conditions. At the expiration of the buyer's due diligence period specified in the agreement, the buyer is required to make a $2.0 million deposit. Because the transaction remains subject to the buyer due diligence provisions and certain other closing conditions, there can be no assurance that the property will be sold or will be sold on the terms described herein.
Forward Looking Statements
This Current Report on Form 8-K contains certain "forward-looking statements" within the meaning of the U.S. Private Securities Litigation Reform Act of 1995, Section 27A of the Securities Act of 1933 and Section 21E of the Securities Exchange Act of 1934. Forward-looking statements relate to expectations, beliefs, projections, future plans, strategies, anticipated events, trends and other matters that are not historical facts. These forward-looking statements reflect our current views about future events, achievements or results and are subject to risks, uncertainties and changes in circumstances that might cause future events, achievements or results to differ materially from those expressed or implied by the forward-looking statements. In particular, our business might be materially and adversely affected by uncertainties affecting real estate businesses generally as well as the following, among other factors: our substantial debt and our high leverage ratio; constraining leverage, interest and tangible net worth covenants under our 2010 Credit Facility; potential losses on impairment of certain long-lived assets, such as real estate, or of intangible assets, such as goodwill; potential losses on impairment of assets that we might be required to record in connection with any dispositions of assets; recent changes to our corporate management team and any resulting modifications to our business strategies; our ability to refinance our existing indebtedness when it matures, on favorable terms or at all, due in part to the effects on us of dislocations and liquidity disruptions in the capital and credit markets; our ability to raise capital, including through the issuance of equity or equity-related securities if market conditions are favorable, through joint ventures or other partnerships, through sales of properties or interests in properties, or through other actions; our short- and long-term liquidity position; current economic conditions and their effect on employment, consumer confidence and spending and the corresponding effects on tenant business performance, prospects, solvency and leasing decisions and on our cash flows, and the value and potential impairment of our properties; general economic, financial and political conditions, including credit market conditions, changes in interest rates or unemployment; changes in the retail industry, including consolidation and store closings, particularly among anchor tenants; our ability to maintain and increase property occupancy, sales and rental rates, in light of the relatively high number of leases that have expired or are expiring in the next two years; increases in operating costs that cannot be passed on to tenants; risks relating to development and redevelopment activities; the effects of online shopping and other uses of technology on our retail tenants; concentration of our properties in the Mid-Atlantic region; changes in local market conditions, such as the supply of or demand for retail space, or other competitive factors; potential dilution from any capital raising transactions; possible environmental liabilities; our ability to obtain insurance at a reasonable cost; and existence of complex regulations, including those relating to our status as a REIT, and the adverse consequences if we were to fail to qualify as a REIT. Additional factors that might cause future events, achievements or results to differ materially from those expressed or implied by our forward-looking statements include those discussed in the section of our Annual Report on Form 10-K in the section entitled "Item 1A. Risk Factors" and in our Quarterly Reports on Form 10-Q. We do not intend to update or revise any forward-looking statements to reflect new information, future events or otherwise.