Filed by Pennsylvania Real Estate Investment Trust
Subject Company: Crown American Realty Trust
Pursuant to Rule 425 under the Securities Act of 1933
And Deemed Filed Pursuant to Rule 14a-12
Under the Securities Exchange Act of 1934
Commission File No.: 1-6300
Pennsylvania Real Estate Investment Trust and
Crown American Realty Trust
Announce Merger Agreement
May 14, 2003
[Graphic omitted]
Investor Notice
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In connection with the proposed transactions referenced below, PREIT
and Crown American Realty Trust intend to file a joint proxy
statement/prospectus on Form S-4 and other materials with the Securities and
Exchange Commission. SECURITY HOLDERS ARE URGED TO READ THESE MATERIALS WHEN
THEY BECOME AVAILABLE BECAUSE THEY WILL CONTAIN IMPORTANT INFORMATION. Investors
and security holders may obtain a free copy of these materials when they become
available as well as other materials filed with the Securities and Exchange
Commission concerning PREIT and Crown American Realty Trust at the Securities
and Exchange Commission's website at http://www.sec.gov. In addition, these
materials and other documents filed by PREIT may be obtained for free by
directing a request to Pennsylvania Real Estate Investment Trust at The
Bellevue, 200 S. Broad Street, Philadelphia, PA 19102; Attn: Investor Relations.
In addition, these materials and other documents filed by Crown American Realty
Trust may be obtained for free by directing a request to Crown American Realty
at Pasquerilla Plaza, Johnstown, Pennsylvania 15901; Attn: Investor Relations.
PREIT and Crown American Realty Trust, and their respective trustees
and executive officers and other members of their management and employees, may
be deemed to be participants in the solicitation of proxies from the
shareholders of PREIT and Crown American Realty Trust in connection with the
merger. Information about the trustees and executive officers of PREIT and their
ownership of PREIT shares is set forth in the proxy statement for PREIT's 2003
Annual Meeting of Shareholders, which was filed with the Securities and Exchange
Commission on April 30, 2003. Information about the trustees and executive
officers of Crown American Realty Trust and their ownership of Crown American
Realty Trust stock is set forth in the Crown American Realty Trust's Annual
Report on Form 10-K and the amendment to its Form 10-K filed with the Securities
and Exchange Commission on March 31, 2003 and April 22, 2003, respectively.
Investors may obtain additional information regarding the interests of such
participants by reading the joint proxy statement/prospectus when its becomes
available.
[Graphic omitted]
1
Strategic Reasons for the Transaction
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o Unique opportunity to acquire a large portfolio of assets in PREIT's core
markets
- Completes transformation of the Company initiated with the acquisition
of a portfolio of malls from The Rouse Company and the pending sale of
the multifamily portfolio
- Significant long-term growth potential through redevelopment and
re-tenanting of properties
- Positions PREIT as a leading shopping mall REIT in the Mid-Atlantic
o Value creation opportunities result from PREIT's operating strengths
- Proven track record with middle market malls
- Established franchise within retail community
- Long-standing relationships with expanding mall retailers
- Leasing team experienced with large format and value oriented retailers
o Operating leverage with tenants and efficiencies associated with greater
scale and market penetration
o Demonstrated ability of PREIT personnel to integrate corporate
acquisitions, including Strouse Greenberg (1992), Equity Retail (1996) and
The Rubin Organization (1997)
o Elevates the Company to next tier of major regional retail REITs
- Combined company will have a total market capitalization of $2.7
billion and a total equity capitalization of $924 million, a 107% and
70% increase, respectively (1)
- Improved access to capital and acquisition currency
----------
(1) Percentage change calculated pro forma for the completion of the Rouse
Portfolio acquisition and the Multifamily Sale.
[Graphic omitted]
2
Transaction Structure
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o PREIT will acquire Crown in a stock for stock transaction valued at $1.3
billion
- PREIT will exchange 11,512,780 common shares and 2,044,511 OP units for
Crown's outstanding common shares and the assets owned by Crown's
Operating Partnership, respectively
Implied Implied
Fixed PREIT PREIT Aggregate Transaction
Total Exchange Ratio Currency Issued Stock Price(1) Consideration(1) Price(1)
---------- -------------- --------------- -------------- ---------------- --------
Common Shares 32,077,961 0.3589x 11,512,780 $ 28.00 $322,357,846 $ 10.05
OP units(2) 9,956,398 0.2053x 2,044,511 $ 28.00 $57,246,313 $ 5.75
---------- -------------- --------------- -------------- ---------------- --------
Total/Wtd.Avg. 42,034,359 0.3225x 13,557,291 $ 28.00 $379,604,159 $ 9.03
- Fixed exchange ratio; no "collar" or other adjustment mechanism
o Crown common shareholders will receive 0.3589 PREIT common shares
for each Crown common share owned
o Crown OP unitholders will receive 0.2053 PREIT OP units for each
Crown OP unit owned
- All Crown OP units are owned by affiliates of Mark Pasquerilla
- Separate OP unit exchange ratio reflects the settlement of the
Cash Flow Support Agreement and the sale of Oak Ridge Mall to
an affiliate of Mark Pasquerilla
o Weighted Average Exchange Ratio of 0.3225x (3)
- PREIT will exchange 522,797 stock options having a weighted average
exercise price of $19.92 for Crown's outstanding stock options
o PREIT will declare an increase in its annual dividend per share to $2.16
from $2.04 at the announcement of the transaction, effective upon the first
quarterly distribution date following the closing of the transaction
o PREIT's Board of Trustees will be increased by 2 Trustees
o PREIT senior management will remain unchanged
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(1) Based on PREIT's closing price of $28.00 on 5/13/03.
(2) In connection with the transaction, the Cash Flow Support Agreement between
Crown and Crown Investments Trust (CIT) will be completely terminated. As a
result, CIT's percentage ownership in the Crown Operating Partnership will
be reduced by an amount equivalent to 500,000 operating partnership units
thus reducing CIT's ownership interest in the Operating Partnership to 15.1%
from 16.2% while increasing Crown American Realty's percentage ownership
interest in the Operating Partnership to 84.9% from 83.8%.
(3) Based upon the respective ownership interests of the common shareholders and
OP unitholders.
[Graphic omitted]
3
Transaction Pricing
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o Overview of assets
- 20 core assets acquired with 2002 average sales $285 PSF
o Excludes one 50% owned joint venture property, Palmer Park Mall,
which PREIT manages and owns the other 50% interest
- 6 non-core assets acquired with 2002 average sales PSF of $218; assets
intended to be repositioned and sold over the next 1 to 3 years
o 2 non-core assets (Oak Ridge Mall and Carlisle Plaza Mall)
previously sold
- Crown's headquarters building in Johnstown, PA not acquired
- PREIT will receive 16 unimproved land parcels (92 acres) adjacent to
three acquired assets
o Cap rate(1)
- 10.2% overall cap rate
- 9.9% cap rate on core assets
- 12.8% cap rate on 6 non-core assets
----------
(1) Cap rate reflects property NOI forecast for 2003, including management
revenue, but excluding straight-line rent. The purchase price used to
calculate the cap rate excludes the mark-to-market premium on above-market-
rate debt and preferred stock.
[Graphic omitted]
4
Strategy Regarding 'Non-Core' Assets
--------------------------------------------------------------------------------
o Structure & Business Plan
- PREIT will pursue non-recourse mortgage financing for the 6 non-core
assets
o Reviewing application from an institutional lender for non-recourse
financing
o Total non-recourse financing required for non-core assets of
approximately $95 million
- Certain assets will be placed in a Special Purpose Entity to facilitate
their financing and ultimate disposition
- PREIT will work to reposition and / or re-merchandise the 6 non-core
assets
- Anticipate liquidation of 6 non-core assets over 3 year period
[Graphic omitted]
5
Summary Pro Forma Capitalization
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Summary of PREIT Pro Forma Capitalization
PREIT Pro PREIT Pro
PREIT Stand Rouse Multifamily Forma Rouse Crown Stand Forma All 3
Alone (4) Transaction (5) Sale (6) and Multifamily Alone (7) Transactions (8)
------------- ------------- --------------- ---------------- -------------- ----------------
Common Shares 16,754 -- -- 16,754 32,078 28,266
OP Units 1,763 934 -- 2,697 5,697 4,742
------------- ------------- --------------- ---------------- -------------- ----------------
Total Shares / Units (1) 18,517 934 -- 19,451 37,775 33,008
Stock Price @ 5/13/03 $28.00 $29.29 -- $28.00 $10.75 $28.00
Equity Market Capitalization $518,474 $27,346 -- $544,621 $406,077 $924,225
Preferred Stock -- -- -- -- 123,750 123,750
Debt: (2)
Mark-to-Market Adjustment -- $17,809 -- $17,809 -- $67,077
Secured Debt 478,218 373,146 (199,330) 652,033 619,063 1,341,096
Bridge Loan (3) -- 196,760 (196,760) -- -- --
Line of Credit 146,900 (42,000) (17,610) 87,290 139,528 223,304
------------- ------------- --------------- ---------------- -------------- ----------------
Total Debt $625,118 $545,715 ($413,700) $757,132 $758,591 $1,631,476
Total Debt & Preferred Stock $625,118 $545,715 ($413,700) $757,132 $882,341 $1,755,226
------------- ------------- --------------- ---------------- -------------- ----------------
Total Market Capitalization $1,143,592 $573,061 ($413,700) $1,301,753 $1,288,417 $2,679,451
Debt / Total Market Cap. 54.7% 58.2% 58.9% 60.9%
(Debt + Preferred) / Total Market Cap. 54.7% 58.2% 68.5% 65.5%
----------
(1) PREIT Shares / OP units outstanding as of 3/31/03; Crown Shares / OP units
outstanding as of 4/30/03.
(2) Debt balances as of 3/31/03 and included pro
rata share of joint venture debt.
(3) Bridge loan of $196.8 million reflects
total purchase price of $555.3 million less $277.1 million of assumed Rouse
mortgage debt, $54.0 million of new mortgage debt and $27.3 million of OP
units issued (assumes all 0.9 million OP units issued at closing of the
Rouse Transaction).
(4) As of 3/31/03; prior to the closing of the Rouse
Transaction.
(5) Includes Cherry Hill Mall exchange. Based on 6 assets at a
purchase price of $548.0 million plus transaction costs of $7.3 million and
the $17.8 million write-up of the assumed above-market rate mortgage debt.
Secured debt includes $277.1 million of assumed mortgage debt and $54.0
million of net financing proceeds on Moorestown Mall and Dartmouth Mall.
Assumes all 0.9 million OP units issued at closing of the Rouse Transaction.
(6) Based on a $420.0 purchase price less $6.3 million in transaction costs.
Assumes that the existing mortgage balance on the multifamily portfolio of
$199.3 million is either assumed by purchaser or repaid upon closing of
disposition. Transaction conditioned upon receipt of consents and other
items, matters and conditions.
(7) Includes pro rata share of JV debt.
Excludes Pasquerilla Plaza mortgage, $49.3 million write-up of
above-market-rate debt and $66.5 million of transaction costs financed on
the company's line of credit. Pro forma for the equivalent reduction of 4.3
million OP units in connection with the settlement by Crown of the
transactions with its principal shareholder.
(8) Reflects a common share exchange ratio of 0.3589x and an OP unit exchange
ratio of 0.2053x to account for the reduced ownership interest of OP
unitholders due to settlement of insider transactions. Debt balances are pro
forma for the transaction adjustments.
[Graphic omitted]
6
Summary of Accretion / (Dilution)
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Accretion / (Dilution)
2003(1) 2004(1)
----------------------------- -------------------------------
FFO per Share Leverage(2) FFO per Share Leverage(2)
------------- ----------- ------------- -----------
Base Case(3) $3.39 - $3.51 58.2% $3.62 - $3.74 58.6%
Pro Forma Crown Transaction(4) $3.34 - $3.46 65.5% $4.26 - $4.38 65.7%
Accretion (mid-point)(5) -$0.05 / -1.4% $0.64 / 17.4%
----------
(1) Operating results assume the following closing dates for the respective
transactions: 4 Rouse Assets (5/1/03); 2 Rouse Assets (6/1/03); Sale of
Multifamily (7/1/03); Crown Transaction (10/1/03).
(2) Leverage is calculated as (Total Debt + Preferred) / (Total Market
Capitalization).
(3) Pro forma for the completion of the Rouse Portfolio acquisition and the
Multifamily Sale; includes the amortization of the debt premium on the
assumed above-market-rate mortgage debt in the acquisition of the Rouse
Portfolio effectively reducing interest expense.
(4) Includes the amortization of the debt premium on the assumed
above-market-rate mortgage debt in the Crown Transaction effectively
reducing interest expense.
(5) Accretion is based on PREIT base case FFO per share in the respective time
period.
[Graphic omitted]
7
Comparative Valuation
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Valuation Statistics
Crown PREIT(1)
-------------- --------------
Current Price (5/13/03) $10.75 $28.00
Total Common Equity Value ($ in thousands)(2) $406,077 $544,621
Total Market Capitalization ($ in thousands) (2) $1,288,417 $1,301,753
Current Dividend / Dividend Yield $0.85 / (7.9%) $2.04 / (7.3%)
2002 FFO per Share / FFO Multiple $1.36 / (7.9x) $2.85 / (9.8x)
2003E FFO per Share / FFO Multiple(3) $1.46 / (7.4x) $3.20 / (8.8x)
2002E FFO per Share / FFO Multiple(3) $1.48 / (7.3x) $3.34 / (8.4x)
Debt / Total Market Capitalization(4)(5) 58.9% 58.2%
(Debt + Preferred) / Total Market Capitalization(4)(5) 68.5% 58.2%
Total Common Shares Outstanding(6) 32,077,961 16,753,614
Total Common Shares and Units Outstanding(5)(6) 37,774,565 19,450,736
Average Daily Volume(7) 109,136 42,392
----------
(1) Pro forma the acquisition of the Rouse Portfolio and the sale of the
Multifamily Portfolio.
(2) Includes both common shares and OP units outstanding. Crown's equity value
based on 37.8 million common shares and OP units outstanding.
(3) Source: First Call as of 5/13/03.
(4) Debt balances include pro rata share of joint venture debt.
(5) PREIT's Total Market Capitalization and OP units outstanding include 0.9
million OP units issued in connection with the acquisition of the Rouse
Portfolio (assumes all 0.9 million OP units issued at closing). Crown's OP
units outstanding reflect CIT's reduced ownership interest in the Operating
Partnership due to the elimination of the equivalent of 4.3 million OP
units in connection with CIT's purchase of Oak Ridge Mall and the
termination of the Cash Flow Support Agreement.
(6) Crown share and OP unit count as of 4/30/03. PREIT share and OP unit count
as of 3/31/03.
(7) Trailing twelve month average as of 5/13/03. Source: Bloomberg.
[Graphic omitted]
8
Crown American Portfolio
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20 Malls 6 Malls 26 Malls
Retained Assets Non-Core Assets Total(1)
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Total Square Footage 12.2 M 3.5 M 15.8 M
--------------------------------------------------------------------------------
In-line Occupancy(2) 90.5% 72.6% 89.1%
--------------------------------------------------------------------------------
In-line Sales Volume $285/sf $218/sf $274/sf
--------------------------------------------------------------------------------
-----------
Note: Figures as of 12/31/02. Data excludes Palmer Park Mall asset owned in a
joint venture with PREIT.
(1) Figures exclude Crown's weakest performing assets, Oak Ridge Mall and
Carlisle Plaza Mall, due to sale.
(2) In-line occupancy includes temporary and seasonal tenants.
[Graphic omitted]
9
Combined Retail Portfolio
--------------------------------------------------------------------------------------------------
Rouse
PREIT Portfolio(1) Crown(2) Combined
------------ ------------ ------------ ------------
Malls
Owned & Managed 6.9 M sf 5.6 M sf 15.8 M sf 28.2 M sf
Third Party Mgmt.(3) 4.2 M sf 0.0 M sf 0.7 M sf 4.9 M sf
------------ ------------ ------------ ------------
Subtotal 11.1 M sf 5.6 M sf 16.5 M sf 33.1 M sf
Power & Strip
Owned & Managed 5.2 M sf 0 sf 0 sf 5.2 M sf
Third Party Mgmt. 0.5 M sf 0 sf 0 sf 0.5 M sf
------------ ------------ ------------ ------------
Subtotal 5.7 M sf 0 sf 0 sf 5.7 M sf
Total 16.8 M sf 5.6 M sf 16.5 M sf 38.8 M sf
------------ ------------ ------------ ------------
In-Line Occupancy(4) 93.0% 90.0% 89.1% 90.6%
Sales Volume(5) $358 $328 $274 $303
-------------
(1) Reflects square footage of all 6 assets acquired, or to be acquired, by
PREIT. Rouse information per PREIT's March 6, 2003 press release.
(2) Crown square footage excludes its interest in Palmer Park Mall (it is
reflected in the PREIT numbers) and includes non-core assets.
(3) Adjusted to reflect the termination of the Christiana Mall management
agreement.
(4) PREIT: In-line Weighted Average Occupancy (Entire Retail Portfolio
excluding redevelopment properties) at 12/31/02; Crown: includes temporary
and seasonal tenants at 12/31/02.
(5) PREIT: Enclosed Malls Weighted Average Comparable Sales; Crown: Comparable
Store In-line Sales -data as of 12/31/02.
[Graphic omitted]
10
Significant Presence in Pennsylvania and the Mid-Atlantic
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Combined Portfolio by Total Square Footage (1) (2)
[Graphic omitted]
[Pie chart showing percentage of total square footage by state.]
----------
(1) Data based on total square footage. Information for PREIT excludes
properties under construction, as well as multifamily and industrial assets.
Pro forma for the acquisition of all 6 Rouse assets.
(2) Crown and PREIT data as of the December 31, 2002 Form 10K. Rouse information
per PREIT's March 6, 2003 press release.
[Graphic omitted]
11
Significant Presence in Pennsylvania and the Mid-Atlantic
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Pro Forma Retail Holdings (1)
[Graphic omitted]
[Listing of each of the properties and corresponding square
footage by state in the Mid-Atlantic region.]
----------
* Denotes joint venture properties.
(1) Pro forma for the acquisition of all 6 Rouse assets. Crown and PREIT data as
of the December 31, 2002 Form 10K. Rouse information per PREIT's March 6,
2003 press release.
(2) Assets considered to be non-core assets.
[Graphic omitted]
12
Combined Retail Portfolio
--------------------------------------------------------------------------------
PREIT, Crown (1) and Rouse Top 20 Tenants
Number of Total SF Revenues
---------------------------------
Tenant Stores Occupied Amount % of Total (2) Location
----------------------------------------------------------------------------------------------------------------------
Gap Stores, Inc. 57 612,715 $11,417,004 4.7% National
Limited Stores, Inc. 123 608,916 11,184,677 4.6% National
JCPenney 34 2,866,803 7,177,682 3.0% National
Sears Roebuck and Co. 32 3,931,627 6,196,146 2.6% National
Footlocker Inc. 67 342,612 5,343,351 2.2% National
Hallmark 45 155,057 4,141,541 1.7% National
Sterling Jewelers 43 56,850 3,519,476 1.5% National
Zales 73 49,297 3,489,451 1.4% National
Best Buy Corp 27 169,263 3,352,870 1.4% National
Boarders Group 35 154,044 3,349,209 1.4% National
Transworld Entertainment 38 191,705 3,301,336 1.4% National
Bon Ton 14 1,176,578 3,087,096 1.3% Regional
Kay Bee Toys 41 149,485 2,942,762 1.2% National
Boscov's 8 1,214,594 2,839,972 1.2% Regional
Shoe Show of Rocky Mtn. 35 183,100 2,655,250 1.1% National
American Eagle Outfitters 29 121,158 2,638,698 1.1% National
Dick's Sporting Goods 4 147,340 2,135,594 0.9% National
The Finish Line 21 107,229 1,993,678 0.8% National
Lenscrafters 32 66,407 1,990,569 0.8% National
Hermes & Muritz 3 64,385 1,516,451 0.6% National
Electronics Boutique 36 41,845 1,412,157 0.6% National
Circuit City 4 100,582 1,406,335 0.6% National
Bed, Bath & Beyond 5 112,116 1,393,058 0.6% National
Costco 2 289,447 1,300,588 0.5% National
Home Depot 1 136,633 1,250,000 0.5% National
----------------------------------------------------------------------------------------------------------------------
Total 809 13,049,787 $91,034,951 37.8%
----------------------------------------------------------------------------------------------------------------------
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* Note: Data as of 12/31/02.
(1) Excludes 50% ownership interest in Palmer Park Mall as 100% ownership
interest is credited to PREIT.
(2) Retail revenues equals minimum rent.
[Graphic omitted]
13
Value Creation Opportunities in Crown American Portfolio
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o Capitalize on geographic presence to attract new mall tenants to expanded
portfolio
o Utilize relationships with value-oriented tenants such as Best Buy, Bed Bath &
Beyond and Michael's to increase occupancy and traffic
o Introduce Boscov's and Target into Crown assets
o Leverage premier assets and geographic strength to drive occupancy at
underperforming properties
o Implement enhanced buying economies program to take advantage of increased
scale
o Accelerate lease and sale program for outparcels
o Utilize geographic concentration to enhance ancillary and seasonal revenue
opportunities
[Graphic omitted]
14
PREIT Portfolio - Value Creation Examples
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Dartmouth Mall Prince Georges Plaza
------------------------- --------------------------
Base Year(1) 2002 Base Year(1) 2002
--------------------------------------------------------------------------------
Comp Sales (psf) $237 $400 $273 $369
--------------------------------------------------------------------------------
In-Line Occupancy 77.3% 87.8% 84.4% 93.5%
--------------------------------------------------------------------------------
NOI $4.7M $7.4M $7.4M $8.8M
--------------------------------------------------------------------------------
Investment $36.1M $49.7M $66.0M $76.8M
--------------------------------------------------------------------------------
ROI 13.0% 14.9% 11.2% 11.5%
--------------------------------------------------------------------------------
----------
(1) Sales and occupancy data based on first full quarter of PREIT's ownership of
the respective asset. NOI, Investment and ROI figures based on first twelve
month period after PREIT's purchase of the respective asset.
[Graphic omitted]
15
Integration Strategy
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o PREIT retained Generative Leadership Group and PricewaterhouseCoopers LLP to
develop integration methodology
o Establish integration structure to transition people and properties
o Allocate acquired assets and personnel in new regional structure
o Evaluate personnel from Crown
o Determine leadership appointments from PREIT and Crown staff
o Implement Workforce Integration Project Plan
- Communicate vision and culture
- Perform human resource due diligence including compensation and benefits
strategy
- Identify technology and business process issues
- Establish process for determining best practices
- Formulate interim and long term operating strategy
[Graphic omitted]
16
Arrangement with Mark Pasquerilla
--------------------------------------------------------------------------------
o Nominated to join PREIT's Board of Trustees
- Agreement to include in Board's slate of nominees for up to 8 years or
longer subject to maintenance of 70% of his share ownership at closing
o Mr. Pasquerilla will have the following ownership interests in PREIT
- 1.1 million PREIT common shares
o 4.1% of PREIT common shares outstanding pro forma the transaction
- 3.2 million PREIT common shares and OP units
o 9.7% of PREIT common shares and OP units outstanding pro forma the
transaction(1)
o Sale of stock received in the transaction
- During the period from two weeks after the closing of the transaction until
the nine month anniversary of the closing:
o Permitted to sell up to $16 million less Oak Ridge net proceeds of sale,
if any
o May resell shares in accordance with Rule 144 (e)(1) quarterly volume
limitations
o Will be entitled to a one-time 'piggyback' right to participate in an
underwritten public equity offering of primary shares initiated by PREIT
- 90 day lock-up following completion of offering
- After the nine month anniversary of the closing
o Subject to annual and quarterly volume limitations
----------
(1) Reflects issuance of 0.9 million PREIT OP units in connection with the
acquisition of the Rouse Portfolio (assumes all 0.9 million OP units issued
at closing).
[Graphic omitted]
17
Arrangement with Mark Pasquerilla
--------------------------------------------------------------------------------
o PREIT will purchase 16 undeveloped outparcels adjacent to acquired malls from
Crown Investments Trust in exchange for Pasquerilla Plaza
o Other
- 8 year tax protection by PREIT on asset sales (does not apply to assets
characterized as non-core assets)
- 8 year non-compete agreement
- 8 year minimum standstill provision
- Indemnification of PREIT by entities affiliated with Mr. Pasquerilla,
subject to a $6 million, two year cap, against claims for related party
transactions with Crown entered into since January 1, 2000
- Participation right in net proceeds received by Mr. Pasquerilla upon resale
of Oak Ridge (90%) and Pasquerilla Plaza (50%) prior to the 6th anniversary
of merger
[Graphic omitted]
18
Forward-Looking Statements
--------------------------------------------------------------------------------
This presentation contains forward-looking statements. Forward-looking
statements relate to expectations, beliefs, projections, future plans and
strategies, anticipated events or trends and other matters that are not
historical facts. These forward-looking statements reflect PREIT's current views
about future events and are subject to risks, uncertainties, assumptions and
changes in circumstances that may cause future events, achievements or results
to differ materially from those expressed by the forward-looking statements. In
particular, PREIT may not be able to consummate the merger with Crown, sale of
its multifamily portfolio or the acquisition of Echelon Mall and Plymouth
Meeting Mall from the Rouse Company on previously announced terms, on otherwise
favorable terms to PREIT, or at all. If such transactions are consummated,
PREIT's actual results may differ significantly from those expressed in any
forward-looking statement. If PREIT is unable to consummate the sale of the
multifamily portfolio, it will be unable to use the proceeds from such sale to
repay the acquisition loan obtained in connection with the acquisitions from the
Rouse Company. Certain factors that could cause PREIT not to consummate such
transactions or could cause PREIT's actual results to differ materially from
expected results include, without limitation, failure of the requisite number of
PREIT and Crown shareholders to approve the merger, the satisfaction of closing
conditions applicable to such transactions (some of which are beyond PREIT's
control); and other economic, business or competitive factors. In addition,
PREIT's business is subject to uncertainties regarding the revenues, operating
expenses, leasing activities, occupancy rates, and other competitive factors
relating to PREIT's portfolio and the properties proposed to be acquired and
changes in local market conditions as well as general economic, financial and
political conditions, including the possibility of outbreak or escalation of war
or terrorist attacks, any of which may cause future events, achievements or
results to differ materially from those expressed by the forward-looking
statements. PREIT does not intend to and disclaims any duty or obligation to
update or revise any forward-looking statements or industry information set
forth in this document to reflect new information, future events or otherwise.
[Graphic omitted]
19