Table of Contents

Introduction

Company Information

1

Earnings Release

2

Changes in Funds from Operations for the Three Months March 31, 2020

6

Market Capitalization and Capital Resources

7

Operating Results

Statements of Operations – Three Months Ended March 31, 2020 and 2019

8

Computation of Earnings Per Share

9

Reconciliation of Net Operating Income and EBITDAre – Three Months Ended March 31, 2020 and 2019

10

Reconciliation of Net Income (GAAP Measure) to Net Operating Income from Consolidated Properties (Non-GAAP Measure) -  Three Months Ended March 31, 2020 and 2019

11

Reconciliation of Equity in Income of Partnerships to Net Operating Income from Equity Method Investments, at Ownership Share (Non-GAAP Measure) - Three Months Ended March 31, 2020 and 2019

12

Reconciliation of Funds From Operations and Funds Available for Distribution – Three Months Ended March 31, 2020 and 2019

13

Condensed Consolidated Balance Sheet

15

Assets and Liabilities - Equity Method Investments, at Ownership Share

16

Operating Statistics

Leasing Activity Summary – Three Months Ended March 31, 2020

17

Summarized Sales and Rent Per Square Foot and Occupancy Percentages

18

Mall Occupancy Percentage and Sales Per Square Foot

19

Top Twenty Tenants

20

Lease Expirations

21

Property Information

22

Balance Sheet

Investment in Real Estate - Consolidated Properties

24

Investment in Real Estate - Equity Method Investments at Ownership Share

25

Anchor Replacement Summary

26

Property Redevelopment Table

27

Capital Expenditures – Three Months Ended March 31, 2020

28

Debt Analysis

29

Debt Schedule

31

Selected Debt Ratios

32

Forward Looking Statements

33

Definitions

34

Research Coverage

Company

Analyst

Phone Number

Citi Investment Research

Michael Bilerman

Christy McElroy

(212) 816-1383

(212) 816-6981

Goldman Sachs & Co. LLC

Caitlin Burrows

(212) 902-4736

JP Morgan

Michael W. Mueller

(212) 622-6689

Stifel Nicolaus

Simon Yarmak

(443) 224-1346

SunTrust Robinson Humphrey

Ki Bin Kim

(212) 303-4124

Three Months Ended

March 31,

(per share amounts)

2020

2019

Net loss - basic and diluted

$

(0.26

)

$

(0.30

)

FFO

$

0.14

$

0.17

FFO, as adjusted

$

0.14

$

0.26

FFO from assets sold in 2019

$

-

$

(0.01

)

FFO, as adjusted for assets sold

$

0.14

$

0.25

•

Same Store NOI, excluding lease termination revenue, decreased 9.6% for the three months ended March 31, 2020 compared to March 31, 2019.  

•

The quarter was impacted by a decrease in revenue of $5.6 million primarily resulting from bankruptcies and related store closings, an increase in credit losses for challenged tenants prior to the COVID-19 pandemic as well as decreased percentage sales revenue resulting from mall closures related to the COVID-19 pandemic. This was partially offset by incremental revenues from anchor replacements and other leasing activity of $0.7 million in the quarter.

•

Same Store NOI, excluding lease termination revenue, decreased 5% through February, in line with prior expectations.

•

NOI-weighted sales at our Core Malls increased to $551 per square foot.  Core Mall sales per square foot reached $542, a 4.8% increase over the prior year.  Average comparable sales per square foot at our top six properties rose 4.8% over the prior year to $651 with two properties generating sales over $700 per square foot.    Sales data is for the trailing twelve

months ended February 29, 2020, the last full month of operations, for comparability purposes in light of the widespread COVID-19 related mall closures in March 2020.

•

Core Mall total occupancy was 92.9%, a decrease of 180 basis points compared to March 31, 2019. Core Mall non-anchor occupancy declined by only 120 basis points from last year despite the impact from bankruptcies and chain liquidations that resulted in 71 store closures for an aggregate 274,000 square feet during the year ended December 31, 2019.

•

Non-anchor Leased space, at 92.0%, exceeds occupied space by 170 basis points when factoring in executed new leases slated for future occupancy, excluding Fashion District Philadelphia.

•

Average renewal spreads for the quarter in our wholly-owned portfolio reflected a 5.2% increase for spaces less than 10,000 square feet and 4.5% overall.   Average renewal spreads for the entire portfolio were negative 1.6% for the quarter when joint venture properties are included.

•

As part of the Company’s plan to improve liquidity during the COVID-19 crisis, we have initiated certain corporate actions including, but not limited to: staff furloughs, reducing the common dividend from $0.21 per share to $0.02 per share, a reduction in forecast capital expenditures of approximately $25.0 million, a reduction in forecast corporate G&A of $3.1 million, reduced property operating expenses during the closure period,  achieved deferral on approximately $11.6 million in real estate tax payments and received forbearance on several mortgage payments.

•

The Company continues to make progress on liquidity-generating capital transactions including its multifamily and hotel land sales, its outparcel sales and the multi-property sale-leaseback transaction.  Timing of closing on many of these transactions is now expected to be later than previously forecast with details noted later in this release.

•

As part of PREIT’s plan, during the quarter, the Company executed amendments to its Senior Credit Facilities.  The Company continues its discussions with lenders to put in place a longer-term financing solution before September 30, 2020.  

•

Excluding Fashion District Philadelphia, 267,000 square feet of leases are signed for 2020 openings, which is expected to contribute annual gross rent of $11.3 million.

•

During the first quarter, the following anchor replacement tenants opened: Dick’s Sporting Goods at Valley Mall, Burlington at Dartmouth Mall, Michael’s at Plymouth Meeting and Moorestown Malls.

•

Currently, the Company has re-opened three enclosed malls and plans to re-open a fourth on Friday, May 22, 2020.  

•

Details on the re-opening schedule and the new safety and social distancing protocols the Company is employing at its managed properties can be found here.

•

Across its portfolio, the Company has hosted blood drives and food donation drives, provided meals to area essential workers, and donated much needed protective supplies. Read more about our efforts here.

•

PREIT has continued to support the businesses that were able to remain open during the pandemic through several avenues including social media support highlighting dining establishments and other contactless pickup options at our properties as well as ecommerce platforms for certain retailers.

•

Shop Local webpages were developed by PREIT, aggregating ecommerce sites for all the small businesses throughout our portfolio. The offerings highlighted not only to the local audience, but to customers of the entire PREIT portfolio, leveraging the Company’s marketing power for local business partners.

•

Through PREIT’s SBA resources page and contact with tenants, the Company has continued to provide resources for smaller business to access the liquidity needed to make it through this challenging time.

•

PREIT’s mall websites now include job portals  to collect information to pass along to our retail partners.

•

Net loss attributable to PREIT common shareholders was $13.5 million, or $0.26 per basic and diluted share for the three months ended March 31, 2020, compared to net loss attributable to PREIT common shareholders of $16.2 million, or $0.30 per basic and diluted share for the three months ended March 31, 2019. 

•

Same Store NOI decreased by $5.3 million, or 10.1%.  The decrease is primarily due to lost revenues from bankrupt tenants, an increase in credit losses and a decrease in percentage of sales revenue due to COVID-19 related mall closures, partially offset by new store openings, including contributions from replacement anchors.  Lease termination revenue was $0.3 million less than the prior year’s quarter.

•

Non Same Store NOI decreased by $2.4 million, primarily due to the conveyance of Wyoming Valley Mall to the lender of the mortgage loan secured by that property in 2019 and; anchor closings as well as associated co-tenancy rents, decrease in other non-recurring revenue compared to the first quarter of 2019 and the sale of the Whole Foods parcel at Exton Square in 2019.

•

FFO for the three months ended March 31, 2020 was $0.14 per share and OP Unit compared to $0.17 per diluted share and OP Unit for the three months ended March 31, 2019.  Adjustments to FFO in the first quarter of 2020 were less than $0.01 per share of provision for employee separation expenses. Adjustments to FFO in the 2019 quarter included $0.06 per share of loss on debt extinguishment, $0.01 per share of provision for employee separation expenses and $0.02 per share of impairment of development land parcels.

•

General and administrative expenses decreased by $0.5 million compared to the first quarter of 2019 due to lower payroll and incentive compensation expenses.

Comp store sales for the rolling twelve months ended March 31, 2019

$

499

Organic sales growth

30

Impact of non-core malls

13

Comp store sales for the rolling twelve months ended February 29, 2020 ⁽²⁾

$

542

⁽¹⁾ Based on reported sales by all comparable non-anchor tenants that lease individual spaces of less than 10,000 square feet and have occupied the space for at least 24 months.

⁽²⁾ Reported through February 29, 2020 due to COVID-19 pandemic related property closures for partial month of March 2020.

(in thousands, except per share amounts)

Three Months

Ended

March 31,

2020

Per Diluted

Share and OP

Unit

Funds from Operations, as adjusted March 31, 2019

$

20,655

$

0.26

Changes - Q1 2019 to Q1 2020

Other leasing activity, including base rent and net CAM and real estate tax recoveries

(3,166

)

(0.040

)

Lease termination revenue

(288

)

(0.005

)

Credit losses

(1,345

)

(0.015

)

Other

(42

)

-

Same Store NOI from unconsolidated properties

(440

)

(0.005

)

Same Store NOI

(5,281

)

(0.065

)

Non Same Store NOI

(2,434

)

(0.030

)

Dilutive effect of asset sales

(473

)

(0.005

)

General and administrative expenses

666

0.010

Capitalization of leasing costs

(156

)

-

Gain on sales of non-operating real estate

(609

)

(0.010

)

Other

170

-

Interest expense, net

(1,266

)

(0.015

)

Increase in weighted average shares

-

(0.005

)

Funds from Operations, as adjusted March 31, 2020

$

11,272

$

0.14

Provision for employee separation expense

(73

)

-

Funds from Operations March 31, 2020

$

11,199

$

0.14

March 31,

2020

December 31,

2019

MARKET CAPITALIZATION

EQUITY CAPITALIZATION

Common Shares Outstanding

78,840

77,550

OP Units Outstanding

2,023

2,023

Total Common Shares and OP Units Outstanding

80,863

79,573

Equity Market Capitalization—Common Shares and OP Units

$

73,585

$

424,124

Series B Preferred Shares, Nominal Value

86,250

86,250

Series C Preferred Shares, Nominal Value

172,500

172,500

Series D Preferred Shares, Nominal Value

125,000

125,000

Total Equity Market Capitalization

$

457,335

$

807,874

DEBT CAPITALIZATION

Secured Debt Balance ⁽¹⁾

$

1,275,645

$

1,280,208

Unsecured Debt Balance ^{(2) (3)}

839,000

805,000

Debt Capitalization

$

2,114,645

$

2,085,208

TOTAL MARKET CAPITALIZATION

$

2,571,980

$

2,893,082

Equity Capitalization/Total Market Capitalization

17.8

%

27.9

%

Debt Capitalization/Total Market Capitalization

82.2

%

72.1

%

Unsecured Debt Balance/Total Debt

39.7

%

38.6

%

CAPITAL RESOURCES

Cash and Cash Equivalents

$

16,302

$

26,922

Revolving Facility

400,000

400,000

Amount Outstanding

(289,000

)

(255,000

)

Available Revolving Facility ⁽⁴⁾

$

111,000

$

145,000

Term Loans

700,500

700,500

Amount Borrowed

(700,500

)

(700,500

)

Available Term Loans

$

-

$

-

TOTAL

$

127,302

$

171,922

Shelf Registration

$

500,000

$

1,000,000

⁽¹⁾

Includes consolidated mortgage debt, our share of mortgage debt from equity method investments, and $150,500 of secured debt from our share of the FDP Term Loan.

⁽²⁾

The unsecured debt balance includes a 2018 Revolving Facility balance of $289,000 as of March 31, 2020 and $255,000 as of December 31, 2019.

⁽³⁾

The unsecured debt balance includes a Term Loan balance of $550,000 as of March 31, 2020 and December 31, 2019, respectively.

⁽⁴⁾

The available Credit Facility borrowings are subject to covenants that may restrict amounts that can be borrowed. Following recent property sales and the amendments of our Credit Agreements on March 30, 2020, the NOI from the Company’s remaining unencumbered properties is at a level such that the incremental unsecured amount available for the Company to borrow as of March 31, 2020 within the Unencumbered Debt Yield covenant, under the $375.0 million 2018 Revolving Facility, was an aggregate of $65.3 million.

Three Months Ended

March 31,

(in thousands of dollars)

2020

2019

REVENUE:

Real estate revenue:

Lease revenue

$

67,721

$

76,615

Expense reimbursements

4,305

5,062

Other real estate revenue

1,924

3,001

Total real estate revenue

73,950

84,678

Other income

293

627

Total revenue

74,243

85,305

EXPENSES:

Operating expenses:

Property operating expenses:

CAM and real estate taxes

(27,517

)

(29,403

)

Utilities

(2,922

)

(3,660

)

Other property operating expenses

(2,098

)

(2,065

)

Total property operating expenses

(32,537

)

(35,128

)

Depreciation and amortization

(30,269

)

(34,904

)

General and administrative expenses

(10,695

)

(11,205

)

Provision for employee separation expenses

(73

)

(719

)

Insurance recoveries, net

-

(236

)

Project costs and other expenses

(95

)

(58

)

Total operating expenses

(73,669

)

(82,250

)

Interest expense, net⁽¹⁾

(16,858

)

(15,898

)

Loss on debt extinguishment, net

-

(4,768

)

Impairment of development land parcel

-

(1,464

)

Total expenses

(90,527

)

(104,380

)

Loss before equity in income of partnerships, gain on sales of real estate by equity method investee, gain on sales of real estate, net, and adjustment to loss on sales of interests in non operating real estate

(16,284

)

(19,075

)

Equity in income of partnerships⁽²⁾

819

2,289

Gain on sales of real estate by equity method investee

-

563

Gain on sales of real estate, net

1,962

-

Loss on sales of interests in non operating real estate

(46

)

-

Net loss

(13,549

)

(16,223

)

Less: net loss attributable to noncontrolling interest

516

1,688

Net loss attributable to PREIT

(13,033

)

(14,535

)

Less: preferred share dividends

(6,844

)

(6,844

)

Net loss attributable to PREIT common shareholders

$

(19,877

)

$

(21,379

)

⁽¹⁾

Net of capitalized interest expense of $910 and $2,004 for the three months ended March 31, 2020 and 2019, respectively.

⁽²⁾

Equity in income of partnerships is net of capitalized interest expense of $1,091 and $1,472 for the three months ended March 31, 2020 and 2019, respectively.

Three Months Ended

March 31,

(in thousands, except per share amounts)

2020

2019

Net loss

$

(13,549

)

$

(16,223

)

Noncontrolling interest

516

1,688

Preferred share dividends

(6,844

)

(6,844

)

Dividends on unvested restricted shares

(350

)

(218

)

Net loss used to calculate loss per share—basic and diluted

$

(20,227

)

$

(21,597

)

Basic and diluted income (loss) per share:

$

(0.26

)

$

(0.30

)

(in thousands of shares)

Weighted average shares outstanding—basic

76,774

71,358

Effect of common share equivalents⁽¹⁾

—

—

Weighted average shares outstanding—diluted

76,774

71,358

⁽¹⁾ The Company had net losses used to calculate earnings per share for all periods presented.  Therefore, the effects of common share equivalents of 520 and 309 for the three months ended March 31, 2020 and 2019, respectively, are excluded from the calculation of diluted loss per share for these periods because they would be antidilutive.

Same Store

Change

Non Same Store

Total

2020

2019

$

%

2020

2019

2020

2019

NOI from consolidated properties

$

40,430

$

45,271

$

(4,841

)

-10.7

%

$

983

$

4,278

$

41,413

$

49,549

NOI attributable to equity method investments, at ownership share

6,612

7,052

(440

)

-6.2

%

832

(29

)

7,444

7,023

Total NOI

47,042

52,323

(5,281

)

-10.1

%

1,815

4,249

48,857

56,572

Less: lease termination revenue

9

300

(291

)

-97.0

%

-

16

9

316

Total NOI excluding lease termination revenue

$

47,033

$

52,023

$

(4,990

)

-9.6

%

$

1,815

$

4,233

$

48,848

$

56,256

⁽¹⁾

NOI is a non-GAAP measure. See definition of NOI on page 34.

Three Months Ended

March 31,

2020

2019

Net loss

$

(13,549

)

$

(16,223

)

Depreciation and amortization:

Consolidated

30,269

34,904

Unconsolidated properties at ownership share

3,610

1,970

Interest expense:

Consolidated

16,858

15,898

Unconsolidated properties at ownership share

2,969

2,663

Gain on sales of real estate by equity method investee

-

(563

)

Gain on sales of interests in real estate, net

(1,962

)

-

Gain on debt extinguishment, net

-

4,768

Impairment of development land parcel

-

1,464

EBITDAre

$

38,195

$

44,881

⁽¹⁾

EBITDAre is a non-GAAP measure. See definition on page 35.

Three Months Ended March 31,

2020

2019

Net loss

$

(13,549

)

$

(16,223

)

Other income

(293

)

(628

)

Depreciation and amortization

30,269

34,904

General and administrative expenses

10,695

11,205

Insurance recoveries, net

-

236

Provision for employee separation expenses

73

719

Project costs and other expenses

95

58

Interest expense, net

16,858

15,898

Equity in income of partnerships

(819

)

(2,289

)

Gain on debt extinguishment, net

-

4,768

Impairment of development land parcel

-

1,464

Gain on sales of real estate by equity method investee

-

(563

)

Gain on sales of interests in real estate, net

(1,962

)

-

Loss on sales of interest in non operating real estate

46

-

NOI from consolidated properties⁽¹⁾

$

41,413

$

49,549

⁽¹⁾

NOI is a non-GAAP measure. See definition of NOI on page 34.

Same Store

Non Same Store

Total

2020

2019

2020

2019

2020

2019

Real estate revenue

Base rent

$

48,480

$

50,387

$

2,568

$

5,498

$

51,048

$

55,885

CAM reimbursement income

9,666

10,671

502

974

10,168

11,645

Real estate tax income

8,318

8,981

178

559

8,496

9,540

Percentage rent

16

1

3

8

19

9

Lease termination revenue

9

297

-

16

9

313

66,489

70,337

3,251

7,055

69,740

77,392

Less: credit losses

(1,892

)

(547

)

(127

)

(230

)

(2,019

)

(777

)

Lease revenue

64,597

69,790

3,124

6,825

67,721

76,615

Expense reimbursements

4,012

4,420

293

642

4,305

5,062

Other real estate revenue

1,785

1,769

139

1,232

1,924

3,001

Total real estate revenue

70,394

75,979

3,556

8,699

73,950

84,678

Property operating expenses

CAM and real estate taxes

(25,397

)

(25,729

)

(2,120

)

(3,674

)

(27,517

)

(29,403

)

Utilities

(2,679

)

(3,149

)

(243

)

(511

)

(2,922

)

(3,660

)

Other property operating expenses

(1,888

)

(1,830

)

(210

)

(236

)

(2,098

)

(2,066

)

Total property operating expenses

(29,964

)

(30,708

)

(2,573

)

(4,421

)

(32,537

)

(35,129

)

NOI from consolidated properties⁽¹⁾

$

40,430

$

45,271

$

983

$

4,278

$

41,413

$

49,549

Less: Lease termination revenue

9

297

-

16

9

313

NOI from consolidated properties excluding lease termination revenue⁽¹⁾

$

40,421

$

44,974

$

983

$

4,262

$

41,404

$

49,236

% change in Same Store NOI from consolidated properties excluding lease termination revenue

(10.1%)

⁽¹⁾

NOI is a non-GAAP measure. See definition of NOI on page 34.

Three Months Ended March 31,

2020

2019

Equity in income of partnerships

$

819

$

2,289

Other income

(14

)

(12

)

Depreciation and amortization

3,610

1,970

Interest expense and other expenses, net

3,029

2,776

NOI from equity method investments at ownership share⁽¹⁾

$

7,444

$

7,023

⁽¹⁾

NOI is a non-GAAP measure. See definition of NOI on page 34.

Same Store

Non Same Store

Total

2020

2019

2020

2019

2020

2,019

Real estate revenue

Base rent

$

6,413

$

6,719

$

1,430

$

172

$

7,843

$

6,891

CAM reimbursement income

1,445

1,684

583

7

2,028

1,691

Real estate tax income

977

943

108

43

1,085

986

Percentage rent

57

46

20

-

77

46

Lease termination revenue

-

3

-

-

-

3

8,892

9,395

2,141

222

11,033

9,617

Less: credit losses

(171

)

(66

)

(162

)

(2

)

(333

)

(68

)

Lease revenue

8,721

9,329

1,979

220

10,700

9,549

Expense reimbursements

435

451

156

41

591

492

Other real estate revenue

197

280

611

171

808

451

Total real estate revenue

9,353

10,060

2,746

432

12,099

10,492

Property operating expenses

CAM and real estate taxes

(2,051

)

(2,271

)

(1,539

)

(366

)

(3,590

)

(2,637

)

Utilities

(178

)

(203

)

(138

)

(45

)

(316

)

(248

)

Other property operating expenses

(512

)

(534

)

(237

)

(50

)

(749

)

(584

)

Total property operating expenses

(2,741

)

(3,008

)

(1,914

)

(461

)

(4,655

)

(3,469

)

NOI from equity method investments at ownership share⁽¹⁾

$

6,612

$

7,052

$

832

$

(29

)

$

7,444

$

7,023

Less: Lease termination revenue

-

3

-

-

-

3

NOI from equity method investments at ownership share excluding lease termination revenue⁽¹⁾

$

6,612

$

7,049

$

832

$

(29

)

$

7,444

$

7,020

% change in Same Store NOI from equity method investments at ownership share excluding lease termination revenue

(6.2%)

⁽¹⁾

NOI is a non-GAAP measure. See definition of NOI on page 34.

Three Months Ended

March 31,

2020

2019

FUNDS FROM OPERATIONS

Net loss

$

(13,549

)

$

(16,223

)

Depreciation and amortization on real estate

Consolidated properties

29,944

34,565

PREIT's share of equity method investments

3,610

1,970

Gain on sales of real estate by equity method investee

-

-

Gain on sales of interests in real estate, net

(1,962

)

-

Impairment of assets

-

-

Dividends on preferred shares

(6,844

)

(6,844

)

Funds from operations attributable to common shareholders and OP Unit holders⁽¹⁾

$

11,199

$

13,468

Insurance recoveries, net

-

236

Loss on debt extinguishment, net

-

4,768

Impairment of development land parcel

-

1,464

Provision for employee separation expenses

73

719

Funds from operations, as adjusted, attributable to common shareholders and OP Unit holders

$

11,272

$

20,655

FUNDS AVAILABLE FOR DISTRIBUTION⁽¹⁾

Funds from operations, as adjusted, attributable to common shareholders and OP Unit holders⁽¹⁾

$

11,272

$

20,655

Adjustments:

Straight line rent

(1,013

)

(1,589

)

Recurring capital expenditures

(1,034

)

(2,013

)

Tenant allowances

(1,017

)

(2,070

)

Amortization of non-cash deferred compensation

1,624

1,922

Capitalized leasing costs

(164

)

(320

)

Amortization of above- and below-market lease intangibles

(17

)

(14

)

Funds available for distribution to common shareholders and OP Unit holders⁽¹⁾

$

9,651

$

16,571

Funds from operations attributable to common shareholders and OP Unit holders per diluted share and OP Unit⁽¹⁾

$

0.14

$

0.17

Funds from operations, as adjusted, attributable to common shareholders and OP Unit holders per diluted share and OP Unit

$

0.14

$

0.26

Funds available for distribution to common shareholders and OP Unit holders per diluted share and OP Unit⁽¹⁾

$

0.12

$

0.21

⁽¹⁾

Non-GAAP measures. See definitions on page 34.

Three Months Ended

March 31,

2020

2019

PAYOUT RATIOS ⁽²⁾

Payout ratio of funds from operations attributable to common shareholders and OP Unit holders

64.6

%

64.0

%

Payout ratio of funds from operations attributable to common shareholders and OP Unit holders, as adjusted

90.4

%

55.4

%

Payout ratio of funds available for distribution attributable to common shareholders and OP Unit holders

144.6

%

97.5

%

Weighted average number of shares outstanding

76,774

71,358

Weighted average effect of full conversion of OP Units

2,023

6,884

Effect of common share equivalents

520

309

Total weighted average shares outstanding, including OP Units

79,317

78,551

⁽²⁾

Twelve months ended March 31, 2020 and 2019, respectively. When using the annualized amount of the recently declared quarterly dividend of $0.02 per common share, the FFO Payout ratio, FFO, as adjusted Payout ratio, and FAD Payout ratio would be 6.2%, 8.6% and 13.8%, respectively, for the three months ended March 31, 2020.

March 31, 2020

December 31, 2019

(in thousands, except per share amounts)

(Unaudited)

ASSETS:

INVESTMENTS IN REAL ESTATE, at cost:

Operating properties

$

3,140,293

$

3,099,034

Construction in progress

81,485

106,011

Land held for development

5,881

5,881

Total investments in real estate

3,227,659

3,210,926

Accumulated depreciation

(1,230,657

)

(1,202,722

)

Net investments in real estate

1,997,002