Pennsylvania Real Estate Investment Trust (

PEI

)

Q4 2011 Earnings Call

February 23, 2012, 10:00 a.m. ET

Executives

Shawn Southard – Director, Corporate Communications

Ronald Rubin – Chairman and CEO

Edward A. Glickman – President and COO

Robert F. McCadden – EVP and CFO

Joseph F. Coradino – President, PREIT Services, LLC and PREIT-RUBIN, Inc.

Analysts

Quentin Velleley – Citigroup Inc.

Nathan Isbee – Stifel Nicolaus & Company, Inc.

Benjamin Yang – Keefe, Bruyette & Woods

Cedrik Lachance – Green Street Advisors

Jeff Lau – Sidoti & Company

Michael Mueller – JPMorgan

David Wiggington – [Inaudible] Securities, Inc.

Presentation

Operator

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Good day, ladies and gentlemen. Thank you for standing by. Welcome to the Pennsylvania Real Estate Investment Trust’s fourth quarter 2011 earnings conference call. During today’s presentation, all parties will be in a listen-only mode. Following a presentation, the conference will be open for questions. (Operator Instructions).

This conference is being recorded today, Thursday, February 23, 2012.

I will now issue the conference over to the host, Mr. Shawn Southard. Please go ahead, sir.

Shawn Southard

Thank you, good morning. During this call, PREIT will make certain forward-looking statements within the meeting of the Federal Securities laws. These statements relate to expectations, beliefs, projections, trends, and other matters that are not listed as facts and are subject to risks and uncertainties that might affect future events or results. The descriptions of these risks are set forth in the company’s SEC filings.

Statements that present today might be accurate only as of today, February 23, 2012. And PREIT makes no undertaking to update any such statements.

Also certain non-GAAP matters will be discussed. PREIT has included reconciliations of such measures to the comparable GAAP measures and in earnings release and other documents filed with the SEC.

It is now my pleasure to turn the call over to Ron Rubin, PREIT’s chairman and CEO.

Ron

ald

Rubin

Thank you very much, Shawn. Welcome to the Pennsylvania Real Estate Investment Trust’s 2011 year-end conference call. Joining me on the call today are Ed Glickman, President, Bob McCadden, CFO, and Joe Coradino, the President of our Management company and head of our retail operations. Also in the room today for Vice Chairman are George Rubin and General Council, Bruce Goldman.

Today, we will discuss our fourth quarter and 2011 results, the status of our current projects and our expectations for 2012. After we conclude our remarks, the call will be opened for your questions.

As noted in our press release, the company is expecting NOI and FFO growth in 2012 as portfolio fundamentals continue to improve. We are pleased that our portfolio has experienced it’s eighth consecutive quarter of same-store sales growth, reaching a new high with improvement at 31 of our malls. This growth, during a period of economic instability, is reflective of solid demographics and investments made to improve the quality of our assets.

Particularly noteworthy is that almost 2/3rds of the company’s NOI now comes from properties with sales of greater than $350 per square foot; many of which were redeveloped, up from 52.3% in 2010 and 44.6% in 2009.

As you will hear during this call, the company’s efforts are being recognized by our shoppers and our tenants. People are shopping and new and exciting tenants are joining our properties. We’re moving ahead optimistically but cautiously, maintaining a disciplined approach.

As a real estate company, we understand the importance of location and our properties have premiere locations in their respective markets. We will continue to be innovative to please our consumers, to attract tenants and to benefit our shareholders.

As we work to execute our game plan, we will continue to improve our balance sheet, place our tenants in service, increase our NOI’s, all as part of our strategy to create greater value for our shareholders.

With that, I’ll turn the call over to Ed Glickman.

Edward Glickman

Thanks, Ron, and thank you all for participating in our call.

We’re happy to report that the company had an excellent fourth quarter and ended the year on a positive note. All of the company’s major metrics were positive and many beyond our original expectations.

FFO is up. Comp store sales are up. Same-store NOI was up. Occupancy was up. Coverage was up. And leverage was down. The breadth of these positive results proves that our performance is more anecdotal.

We believe that we are beginning to realize on our investments in a way that confirms our original strategy, that we could reposition well-located, but under-utilized retail assets to create special places that are central to the many dimensions of our customer’s lives. And in doing so, to create meaningful value.

To say that executing this strategy in the face of the recent economic crisis has been difficult would be a gross understatement, but we are beginning to see the light.

On the Operating side in 2011, we believe that there has been a palpable positive change in the direction of our leasing momentum. We chose to take the risk of shortening lease terms in place of locking in low rents on long-term leases hoping that sales performance would improve and this has definitely been the right call. Comp sales are now higher than our peak in 2007 and our occupancy cost has dropped by 40 basis points to 12.4%. Rising comp sales against declining occupancy costs are positive indicators for future performance.

As an example of the positive shift in direction that we have experienced, we renewed a record amount of square footage last year, over 1.4 million, facing a higher-than-usual expiration schedule and significant back draft from the board of store closings. Nevertheless, we moved from a minus 3.6% spread to a positive 1.9% spread. In fact, after all was said and done, we ended the year with a slight increase in occupancy.

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