Thursday, July 30, 2015

PREIT to demolish Exton Square's Kmart, add organic grocery store.


Pennsylvania Real Estate Investment Trust, owner of Exton Square Mall in Chester County, plans to demolish the site's Kmart building and replace it with a large-format organic grocery store.

PREIT chief executive Joseph Coradino told analysts in a conference call Wednesday that the grocer would be named in the coming days. A lease for 55,000 square feet has been executed, he said.

Philadelphia-based PREIT also has identified a dine-in movie theater and a bowling-and-entertainment center as prospective tenants for the former site of a 118,000-square-foot J.C. Penney Co. store at Exton Square, Coradino said.

The moves come as PREIT - owner of the Gallery at Market East in Center City, the Cherry Hill Mall and Willow Grove Park, among other shopping sites in the region and nationally - pursues a strategy of upgrading its top-performing properties in high-density areas while shedding farther-flung assets.

In a release Tuesday, PREIT said it would soon close on its sale of Uniontown Mall in southwestern Pennsylvania for $23 million. The buyer, who was not identified, will separately acquire ownership of the land on which the mall is built, the company said.

PREIT also has entered into an agreement to sell Gadsden Mall in Gadsden, Ala., Wiregrass Commons Mall in Dothan, Ala., and New River Valley Mall in Christiansburg, Va., to an institutional buyer for $95.4 million.

The transactions would make up a total of 10 malls sold under the company's disposition program, PREIT said. Total funds raised through the sale of those malls and other assets would total more than $560 million, it said.

PREIT is negotiating agreements of sale on two more "non-core" malls, which it said it hopes to execute within the next several weeks.

On the call with analysts Wednesday, Coradino said PREIT was unable to release a development schedule for its planned $325 million revamp of the Gallery because it had yet to secure some state support for the project.

He blamed the delay on the ongoing discord between the Democratic administration of Gov. Wolf and the Republican-led legislature.

PREIT and its partner in the Gallery, Macerich Co., have been awarded $14.5 million in state grants for the project, but have applied for $20 million more.

"There's a lot of tension in Harrisburg right now with our new governor, so we didn't get it done as quickly as we'd like to," Coradino told analysts. "That's why you're not getting the full story on the Gallery."

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