PREIT Exits MF Sector

Pennsylvania Real Estate Investment Trust, Philadelphia, has sold its multifamily portfolio to Morgan Properties for $420 million in a deal that will seal the company's exit from the multifamily sector and transform it into a retail REIT.The company also reported that it is buying six Philadelphia area retail properties from The Rouse Co. for a total consideration of $548 million. On completion of the latter transaction, PREIT will be the largest retail owner/operator in the Philadelphia market, the REIT said. PREIT said "a substantial portion" of the expected gain from the sale of its multifamily portfolio is expected to meet the requirements for a tax-deferred exchange with the Rouse mall acquisition. As part of the Rouse transaction, PREIT will assume about $285 million of nonrecourse mortgage debt. Upon completion of the two transactions, PREIT's retail portfolio will consist of 28 properties totaling approximately 17.4 million square feet in seven states, PREIT said. The net effect will be to add $0.25 per share in funds from operations for 2003, the company said.