The Pennsylvania Real Estate Trust announced its fourth quarter and full year 2009 earnings results Friday. As expected, the real estate financier experienced an overall loss in revenue in 2009. With most of its portfolio located in Philadelphia, the year to come is also projected to have a net loss.
The Pennsylvania Real Estate Trust was founded over 50 years ago and has grown from a small company into one with a vast portfolio consisting of 38 shopping malls, 13 community centers, and 15 in development retail properties located primarily in Pennsylvania but with stakes in Florida, South Carolina, North Carolina, Virginia and eight other states.
According to BusinessWire reports, PREIT lost $1.41 per share. The real estate market has not been kind to real estate investors. Lower occupancy rates coupled with defaults on mortgages and large asset write-downs proved major obstacles to the company’s success in 2009.
As a result, funds from operations fell short of analysts’ expectations.
Data shows that PREIT’s majority stake hold is located in Philadelphia where the company is headquartered. The real estate market in the area, particularly in Pennsylvania’s largest counties – Buck, Allegheny, and Lancaster County – is actually on a downward slope.
Philadelphia, the City of Brotherly Love, has experienced a sizeable downturn in the real estate sector. Of note, there were 4,133 foreclosure filings in February alone for the state as a whole. Home sales are also slipping. In February, 163 homes were sold in the Philadelphia area compared to 273 sales in January.
The trend continues in both Lancaster and Allegheny County which contain the city of Lancaster and Pittsburgh respectively. In Pittsburgh, home sales were down considerably from 503 in January to 123 in February. Lancaster County followed suit with 166 homes sold in February to 229 sold in January.
The results are staggering. PREIT still has a long ways to go to return to profitability. The real estate market in Pennsylvania is still reeling from foreclosures and vacant properties. However, the company has managed to close a $670 million credit facility deal with Wells Fargo.
PREIT has scheduled a conference call reporting its fourth quarter and yearend results March 12, 2010 at 11am EST.
Written by Lani Shadduck
HULIQ.com
Datasource:RealtyTrac.com, Marketwatch.com
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