Pennsylvania Real Estate Investment Trust Announces Completion of Merger with Crown American Realty Trust

PHILADELPHIA--()--Nov. 20, 2003--Pennsylvania Real Estate Investment Trust ("PREIT") (NYSE: PEI) today announced that earlier today it has closed its merger with Crown American Realty Trust ("Crown") (NYSE:CWN), which was originally announced on May 14, 2003. Both companies received shareholder approval for the transaction on November 11, 2003.

With the completion of the merger, PREIT now has a market capitalization of approximately $3.1 billion and owns 54 retail properties, including 40 shopping malls and 14 strip and power centers, totaling approximately 33.4 million square feet in 14 states. Approximately 82% of PREIT's portfolio is now located in the Mid-Atlantic States of Pennsylvania, New Jersey, Delaware and Maryland. Through the Crown merger, PREIT acquired 26 wholly owned regional shopping malls and the remaining 50% interest in Palmer Park Mall, Easton, Pennsylvania.

Under terms of the agreement, Crown common shares were converted to PREIT common shares at a fixed exchange ratio of 0.3589 for each outstanding common share of Crown and a fixed exchange ratio of 0.2053 for each Operating Partnership Unit. There were 32,669,754 Crown common shares outstanding on November 20, 2003 and 9,956,398 Crown Operating Partnership Units. Including shares issued to former Crown shareholders in the merger, PREIT now has 35,371,789 common shares outstanding and 3,760,075 Operating Partnership Units currently outstanding and an additional 341,297 Operating Partnership Units subject to issuance in the future in connection with the merger transactions. PREIT also issued 2,475,000 PREIT preferred shares (NYSE:PEIPRA) in exchange for the outstanding Crown preferred shares (NYSE:CWNPRA). The terms of the PREIT preferred shares are substantially identical to the terms Crown preferred shares.

Ronald Rubin, Chairman and Chief Executive Officer of PREIT, said, "We are pleased to close this transaction and solidify our position as a leading shopping mall REIT in the Mid-Atlantic Region. We will now focus our efforts on successfully integrating the Crown retail assets and working diligently to deploy our management expertise to improve the overall performance of the combined portfolio. The completion of this merger provides value-creation opportunities and strengthens our relationships with retailers. Our experience in the redevelopment and leasing of middle market malls, combined with our increased operating leverage, provides strong long-term growth potential. In addition, we now have greater financial flexibility and liquidity and expect to achieve significant economies of scale. On behalf of PREIT, I would like to officially welcome the Crown shareholders to Pennsylvania Real Estate Investment Trust and we look forward with optimism to our future success."

Capital Structure

PREIT also announced that it has completed a new $500 million unsecured revolving line of credit which gives PREIT the ability to increase the facility to $650 million under prescribed conditions. The new facility bears interest at a rate between 1.5% and 2.5% over LIBOR based on PREIT's leverage. The availability of funds under the facility is subject to PREIT's compliance with customary financial and other covenants and agreements. The facility has a term of three years with an additional one year extension provided that there is no event of default at that time. PREIT used $170 million of its new line of credit to pay off Crown's GECC line of credit and to pay for certain closing costs in connection with the merger.

The new facility is led by Wells Fargo National Bank Association as Sole Lead Arranger & Administrative Agent, and includes U.S. Bank Association and Fleet National Bank as Syndication Agents; Commerzbank AG, New York and Cayman Branches and Manufacturers & Traders Trust Company as Documentation Agents; Bank One, NA, Eurohypo AG, New York Branch and Wachovia Bank National Association as Managing Agents and Union Bank of California, Allied Irish Bank, Citizens Bank, National City Bank, Wilmington Trust, Bank of America, Citigroup and FirsTrust Bank.

PREIT also assumed from Crown approximately $444 million of a first mortgage loan secured by a portfolio of 15 properties at 7.53% interest rate and maturity of September 2008, and an additional $153 million in mortgages on certain properties with current interest rates between 3.12%-7.61%.

About Pennsylvania Real Estate Investment Trust

Pennsylvania Real Estate Investment Trust, founded in 1960 and one of the first equity REITs in the U.S., has a primary investment focus on retail shopping malls and power centers (approximately 33.4 million square feet) located in the eastern United States. PREIT's portfolio currently consists of 58 properties in 14 states. PREIT's portfolio includes 40 shopping malls, 14 strip and power centers and four industrial properties.

This press release contains certain "forward-looking statements" within the meaning of Section 21E of the Securities Exchange Act of 1934 and the U.S. Private Securities Litigation Reform Act of 1995. 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. The success of the merger will depend, among other things, upon PREIT's ability to integrate successfully the properties and operations acquired in the merger from Crown and to enhance the value of these properties. 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 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 press release to reflect new information, future events or otherwise.

Contacts

Pennsylvania Real Estate Investment Trust, Philadelphia
Phone: 215-875-0700
Fax: 215-546-7311
Toll Free: 866-875-0700
www.preit.com
Ronald Rubin, 215-875-0125
or
KCSA Public Relations Worldwide, New York
Investor Relations:
Todd Fromer, 212-896-1215
Media Relations:
Evan Smith, 212-896-1251

Contacts

Pennsylvania Real Estate Investment Trust, Philadelphia
Phone: 215-875-0700
Fax: 215-546-7311
Toll Free: 866-875-0700
www.preit.com
Ronald Rubin, 215-875-0125
or
KCSA Public Relations Worldwide, New York
Investor Relations:
Todd Fromer, 212-896-1215
Media Relations:
Evan Smith, 212-896-1251