Pennsylvania R.E.I.T. (NYSE:PEI) has announced that it will be selling two of its malls in non-core markets as part of its plan to boost its capital plan resources.
PREIT will be selling the Valley View Mall in LaCrosse and Logan Valley in Altoona and has already gotten spontaneous offers for the malls. Disposing of the malls will allow the company to boost the quality of its portfolio and allow it to source more growth. The revenue generated from the disposal will be pumped into the company’s value-generating redevelopment pipeline. Once the company completes the sale, it anticipates a rise in its portfolio sales by $10 per square foot.
“PREIT has a demonstrated record of transforming and revitalizing the traditional mall model to capitalize on new opportunities and evolving trends in the market. To date, we have successfully sold 16 lower-productivity malls as part of our non-core property disposition program. With these additional dispositions, we are taking further action to strengthen our portfolio amid a challenging retail climate,” stated PREIT CEO, Joseph F. Coradino.
PREIT’s decision places it in a better position to leverage future growth
Coradino also noted that the company’s decision to sell the two malls is a smart move as far as strategy is concerned. He added that the proceeds from the sale will place the firm in a better position to continue carrying out strategic investments in high-value assets. This will also allow the firm to come up with a more productive environment. He also believes that the move will boost shareholder value and foster more engagement with third parties.
PREIT has also adopted a customer-driven approach when considering the tenant mix for the malls. The approach mainly revolves around dining and entertainment. Previous approaches mainly focused on traditional retail, such as shopping for apparel. It has now evolved towards attracting customers by giving them more experiences beyond retail. The strategy aligns with the changing customer behavior.
PREIT stock closed the latest trading session on Monday at $10.84 after tanking by 0.82 percent compared to the value of the stock during the previous close.
