77281--3/16/2010--PENNSYLVANIA_REAL_ESTATE_INVESTMENT

related topics

{investment, property, distribution}

{loan, real, estate}

{acquisition, growth, future}

{debt, indebtedness, cash}

{tax, income, asset}

{condition, economic, financial}

{loss, insurance, financial}

{capital, credit, financial}

{interest, director, officer}

{provision, law, control}

{competitive, industry, competition}

{cost, regulation, environmental}

{operation, natural, condition}

{stock, price, share}

RISKS RELATED TO OUR INDEBTEDNESS AND OUR FINANCING We have substantial debt, which could adversely affect our overall financial health and our operating flexibility. We require significant cash flows to satisfy our debt. If we are unable to satisfy these obligations, we might be constrained from using our cash flow for other purposes or might default on our obligations. If we were unable to comply with the covenants in our 2010 Credit Facility, we might be adversely affected. We might not be able to refinance our existing obligations or obtain the capital required to finance our new business initiatives. Recent disruptions in the credit markets could affect our ability to obtain debt financing on terms acceptable to us, or at all, and have other adverse effects on us. The current downturn in the overall economy and the recent disruptions in the financial markets might adversely affect our cash flows from operations. Payments by our direct and indirect subsidiaries of dividends and distributions to us might be adversely affected by their obligations to make prior payments to the creditors of these subsidiaries. Our hedging arrangements might not be successful in limiting our risk exposure, and we might be required to post collateral or incur expenses in connection with these arrangements or their termination that could harm our results of operations or financial condition. Recent disruptions in the credit markets could adversely affect our ability to access funds under the 2010 Credit Facility. RISKS RELATED TO OUR BUSINESS AND OUR PROPERTIES Any store closings, leasing delays, lease terminations or tenant bankruptcies or other financial difficulties we encounter could adversely affect our financial condition and results of operations. Rising operating expenses, decreased occupancy and certain lease provisions have reduced, and could in the future continue to reduce, our expense reimbursements and our cash flow and funds available for future distributions. The valuation and accounting treatment of certain long-lived assets, such as real estate, or of intangible assets, such as goodwill, could result in future asset impairments, which would be recorded as operating losses. Changes in the retail industry, particularly among retailers that serve as anchor tenants, could adversely affect our results of operations. The recent investments we have made in redeveloping older properties and developing new properties could be subject to higher costs, delays or other risks and might not yield the returns we anticipate, which would harm our financial condition and operating results. There is a concentration of our retail properties in the Eastern United States, particularly in the Mid-Atlantic region, and adverse market conditions in that region might affect the ability of our tenants to make lease payments and the interest of prospective tenants to enter into leases, which might reduce the amount of revenue generated by our properties. We have invested and expect to invest in the future in partnerships with third parties to acquire or develop properties, and we might not control the management, redevelopment or disposition of these properties, or we might be exposed to other risks. The retail real estate industry is highly competitive, and this competition could harm our ability to operate profitably. We might be unable to effectively manage simultaneously any redevelopment and development projects, which could affect our financial condition and results of operations. We face competition for the acquisition of properties, development sites and other assets, which might impede our ability to make future acquisitions or might increase the cost of these acquisitions. We might not be successful in starting and nurturing new business initiatives. We might not be successful in identifying suitable acquisitions that meet the criteria we apply, given economic, market or other circumstances, which might impede our growth. We might be unable to integrate effectively any additional properties we might acquire, which might result in disruptions to our business and additional expense. Our business could be harmed if Ronald Rubin, our chairman and chief executive officer, or other members of our senior management team terminate their employment with us. If we suffer losses that are not covered by insurance or that are in excess of our insurance coverage limits, we could lose invested capital and anticipated profits. We might incur costs to comply with environmental laws, which could have an adverse effect on our results of operations. Inflation may adversely affect our financial condition and results of operations. RISKS RELATED TO THE REAL ESTATE INDUSTRY We are subject to risks that affect the retail real estate environment generally. Illiquidity of real estate investments could significantly affect our ability to respond to adverse changes in the performance of our properties and harm our financial condition. Possible terrorist activity or other acts of violence or war could adversely affect our financial condition and results of operations. RISKS RELATING TO OUR ORGANIZATION AND STRUCTURE Our organizational documents contain provisions that might discourage a takeover of us and depress our share price. Limited partners of PREIT Associates may vote on certain fundamental changes we propose, which could inhibit a change in control that might otherwise result in a premium to our shareholders. We have entered into tax protection agreements for the benefit of certain former property owners, including some limited partners of PREIT Associates, that might affect our ability to sell or refinance some of our properties that we might otherwise want to sell, which could harm our financial condition. Some of our officers and trustees have interests in properties that we manage and therefore might have conflicts of interest that could adversely affect our business. RISKS RELATING TO OUR SECURITIES Holders of our common shares might have their interest in us diluted by actions we take in the future. Many factors, including changes in interest rates and the negative perceptions of the retail sector generally, can have an adverse effect on the market value of our securities. Individual taxpayers might perceive REIT securities as less desirable relative to the securities of other corporations because of the lower tax rate on certain dividends from such corporations, which might have an adverse effect on the market value of our securities. If we were to fail to qualify as a REIT, our shareholders would be adversely affected. We might be unable to comply with the strict income distribution requirements applicable to REITs, or compliance with such requirements could adversely affect our financial condition or cause us to forego otherwise attractive opportunities.

Full 10-K form ▸

77281--3/16/2010--PENNSYLVANIA_REAL_ESTATE_INVESTMENT_TRUST