SCHEDULE 14A INFORMATION
                Proxy Statement Pursuant to Section 14(a) of the
                         Securities Exchange Act of 1934

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Check the appropriate box:

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/ / Confidential, for Use of the Commission Only
    (as permitted by Rule 14a-6(e)(2))
/X/ Definitive Proxy Statement
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/ / Soliciting Material Under Rule 14a-12


                    PENNSYLVANIA REAL ESTATE INVESTMENT TRUST
-----------------------------------------------------------------------------
                (Name of Registrant as Specified in Its Charter)


 -----------------------------------------------------------------------------
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                               [GRAPHIC OMITTED]






                   PENNSYLVANIA REAL ESTATE INVESTMENT TRUST

                             -----------------------

                          NOTICE OF ANNUAL MEETING OF
                 HOLDERS OF CERTIFICATES OF BENEFICIAL INTEREST
                                  MAY 9, 2002

                             -----------------------

   The Annual Meeting of Holders of Certificates of Beneficial Interest of
Pennsylvania Real Estate Investment Trust will be held on Thursday, May 9,
2002 at 11:00 a.m. at the Park Hyatt Philadelphia at the Bellevue, 200 South
Broad Street, Philadelphia, Pennsylvania 19102 for the following purposes:

          (1)  To elect two Trustees;

          (2)  To consider and vote upon a proposal to approve certain terms
               of the Pennsylvania Real Estate Investment Trust 2002-2004
               Long-Term Incentive Plan; and

          (3)  To transact such other business as may properly be brought
               before the meeting or any adjournment thereof.

   The Trustees have fixed the close of business on March 20, 2002 as the
record date for the determination of shareholders entitled to notice of and to
vote at the meeting.

   All shareholders are cordially invited to attend the meeting. Whether or not
you expect to attend the meeting in person, please mark, sign and date the
enclosed proxy and return it promptly so that your shares may be voted. If you
attend the meeting, you may revoke your proxy and vote in person.


                                   By Order of the Board of Trustees



                                   JEFFREY A. LINN
                                   Secretary



Philadelphia, Pennsylvania
April 5, 2002


                               TABLE OF CONTENTS




                                                                            Page
                                                                            ----
                                                                         
VOTING AND REVOCABILITY OF PROXIES ......................................     1
PROPOSAL ONE -- ELECTION OF TRUSTEES ....................................     2
    Required Vote .......................................................     7
    Board Recommendation ................................................     7
PROPOSAL TWO -- THE 2002-2004 LONG-TERM INCENTIVE PLAN ..................     8
    Performance Units ...................................................     8
    Restricted Share Awards .............................................     9
    Termination of Employment and Change of Control .....................    10
    Administration and Amendment ........................................    10
    Required Vote .......................................................    11
    Board Recommendation ................................................    11
PROPOSAL THREE -- OTHER MATTERS .........................................    11
ADDITIONAL INFORMATION ..................................................    12
    Summary Compensation Table ..........................................    12
    Employment Agreements ...............................................    13
    Stock Options .......................................................    15
    Stock Option Plans ..................................................    15
    Transactions with Management ........................................    16
    Board Matters .......................................................    18
    Section 16(a) Beneficial Ownership Reporting Compliance .............    18
    Compensation Committee Interlocks and Insider Participation .........    18
    Report of Executive Compensation and Human Resources Committee on
      Executive Compensation ............................................    19
    Performance Graph ...................................................    20
    Audit Committee Report ..............................................    21
    Additional Information Regarding Our Independent Public Accountants .    22
    Principal Security Holders ..........................................    22
    Shareholders' Proposals .............................................    22

EXHIBIT A -- Pennsylvania Real Estate Investment Trust 2002-2004 Long-Term
             Incentive Plan



                   PENNSYLVANIA REAL ESTATE INVESTMENT TRUST

                             200 South Broad Street
                        Philadelphia, Pennsylvania 19102
                                 www.preit.com

                             -----------------------

                                PROXY STATEMENT

                             -----------------------

   The Annual Meeting of Holders of Certificates of Beneficial Interest of
Pennsylvania Real Estate Investment Trust ("PREIT") will be held on Thursday,
May 9, 2002 at 11:00 a.m. at the Park Hyatt Philadelphia at the Bellevue, 200
South Broad Street, Philadelphia, Pennsylvania 19102. We are mailing this
Proxy Statement on or about April 5, 2002 to each holder of PREIT's issued and
outstanding shares of beneficial interest (the "Shares") entitled to vote at
the meeting in order to furnish information relating to the business to be
transacted at the meeting. We have mailed our Annual Report to Shareholders
for the fiscal year ended December 31, 2001, including financial statements,
to our shareholders together with this Proxy Statement. We have included the
Annual Report for informational purposes and not as a means of soliciting your
proxy.

   We have fixed the close of business on March 20, 2002 as the record date for
the Annual Meeting. All shareholders of record at that time are entitled to
notice of and are entitled to vote at the Annual Meeting and any adjournment
or postponement thereof. On the record date, 15,961,368 Shares were
outstanding.

                       VOTING AND REVOCABILITY OF PROXIES

   We hope you will be present at the Annual Meeting. If you cannot attend,
please complete, sign, date and return the enclosed proxy in the accompanying
envelope so that your Shares will be represented. The envelope is addressed to
our transfer agent and requires no postage. If you receive more than one proxy
card -- because you have multiple accounts -- you should sign and return all
proxies received to be sure all of your Shares are voted.

   On each matter voted on at the Annual Meeting and any adjournment or
postponement thereof, each record holder of Shares will be entitled to one
vote per Share. Assuming a quorum is present, the two nominees receiving the
highest number of votes cast at the meeting will be elected Trustees. In
addition, the terms of the 2002-2004 Long-Term Incentive Plan that are being
submitted to shareholders for their approval will be approved upon the
affirmative vote of the holders of a majority of the Shares present in person
or by proxy at the Annual Meeting and voting on the proposal. If you mark your
proxy as "Withhold Authority" or "Abstain" on any matter, or if you give
specific instructions that no vote be cast on any specific matter, the Shares
represented by your proxy will not be voted on that matter, but will count
towards the establishment of a quorum.

   You may vote your Shares at the Annual Meeting in person or by proxy. All
valid proxies received before the Annual Meeting will be voted according to
their terms. If you complete your proxy properly, but do not provide
instructions as to how to vote your Shares, your proxy will be voted "FOR" the
election of all Trustees nominated by our Board of Trustees and "FOR" the
approval of the terms of the 2002-2004 Long-Term Incentive Plan that are being
submitted to shareholders for their approval. If any other business is brought
before the Annual Meeting, proxies will be voted, to the extent permitted by
the rules and regulations of the Securities and Exchange Commission, in
accordance with the judgment of the persons voting the proxies. After
providing your proxy, you may revoke it at any time before it is voted at the
Annual Meeting by filing with PREIT's Secretary an instrument revoking it or a
duly executed proxy bearing a later date, or by attending the Annual Meeting
and giving notice of revocation. Attendance at the Annual Meeting will not, by
itself, constitute revocation of a proxy.

   We will bear the cost of preparing and soliciting proxies, including the
reasonable charges and expenses of brokerage firms or other nominees for
forwarding proxy materials to shareholders. In addition to solicitation by
mail, certain Trustees, officers and employees of PREIT and its subsidiaries
may solicit proxies by telephone, telegraph or personally without extra
compensation, with the exception of reimbursement for actual expenses incurred
in connection with the solicitation. The enclosed proxy is solicited by and on
behalf of our Board of Trustees.


                                       1


                                  PROPOSAL ONE
                              ELECTION OF TRUSTEES

   The Trustees intend to cause Lee H. Javitch and Jonathan B. Weller, the two
Trustees whose terms expire at the Annual Meeting, to be nominated for re-
election at the Annual Meeting as Class A Trustees to serve until the Annual
Meeting to be held in the spring of 2005 and until their respective successors
have been duly elected and have qualified. If either of the foregoing nominees
becomes unable to or declines to serve, the persons named in the accompanying
proxy shall have discretionary authority to vote for a substitute or
substitutes unless the Board of Trustees reduces the number of Trustees to be
elected.

   PREIT's Trust Agreement provides that nominations for election to the office
of Trustee at any Annual or Special Meeting of Shareholders shall be made by
the Trustees, or by petition in writing delivered to PREIT's Secretary not
fewer than thirty-five days before an Annual or Special Meeting of
Shareholders signed by the holders of at least two percent of the Shares
outstanding on the date of the petition. Nominations not made in accordance
with these procedures will not be considered, unless the number of persons
properly nominated is fewer than the number of persons to be elected to the
office of Trustee at the meeting. In this latter event, nominations for the
Trustee positions that would not otherwise be filled may be made at the
meeting by any person entitled to vote in the election of Trustees.

   PREIT's Board of Trustees currently consists of eight members who serve
staggered three year terms. The following table presents information
concerning the two nominees for the office of Class A Trustee, the six
Trustees who will continue in office after the Annual Meeting and PREIT's
executive officers, including their ages, principal occupations and the number
of Shares beneficially owned by them as of March 22, 2002.



                                                                                                        Shares Beneficially Owned
                                                                                                           on March 22, 2002(1)
                                                  Principal Occupation                    Trustee       -------------------------
           Name              Age                    and Affiliations                       Since           Number        Percent
           ----              ---                    ----------------                       -----           ------        -------
                                                                                            
Nominees for the
Office of Trustee

Class A Trustees; Terms Expire in 2002

Lee H. Javitch                71     Private investor and former Chairman and Chief        1985             11,625(2)        *
                                     Executive Officer, Giant Food Stores, Inc.
                                     Director of Jewish Theological Seminary of
                                     America, and Jewish Community Center of
                                     Harrison, NY. Former chairman of MAZON: A
                                     Jewish Response to Hunger, Rye Country Day
                                     School, Pennsylvania Council on Arts, and
                                     executive committee member of Boy Scouts of
                                     America.

Jonathan B. Weller            55     President and Chief Operating Officer of PREIT        1994            225,701(3)       1.39%
                                     since 1993. From 1988 to 1993, Executive Vice
                                     President and Director of Eastdil Realty, Inc.
                                     (real estate investment banking). Member of
                                     National Association of Real Estate Investment
                                     Trusts, Urban Land Institute and International
                                     Council of Shopping Centers. Chair of Lower
                                     Merion Conservancy. Director of Ramapo-
                                     Anchorage Camp.

                              2





                                                                                                        Shares Beneficially Owned
                                                                                                           on March 22, 2002(1)
                                                  Principal Occupation                    Trustee       -------------------------
           Name              Age                    and Affiliations                       Since           Number        Percent
           ----              ---                    ----------------                       -----           ------        -------
                                                                                            
Trustees Whose Terms
Continue

Class B Trustees; Terms Expire in 2003

Ronald Rubin(4)               70     Since September 1997, Chief Executive Officer         1997            751,738(5)      4.50%
                                     of PREIT. Chairman of PREIT since October
                                     2001. From 1992 to September 1997, Chairman
                                     and Chief Executive Officer of The Rubin
                                     Organization, Inc. (now named PREIT-RUBIN,
                                     Inc.). Trustee of International Council of
                                     Shopping Centers. Director of Exelon
                                     Corporation. Past Chairman of Center City
                                     District and past Chairman of the Greater
                                     Philadelphia Chamber of Commerce. Director of
                                     the Regional Performing Arts Center. Past
                                     President of Jewish Federation of Greater
                                     Philadelphia. Served on boards of Franklin
                                     Institute, Philadelphia Orchestra, Albert
                                     Einstein Medical Center, Tel Aviv University,
                                     American Friends of Hebrew University,
                                     Midlantic Bank (now PNC), University of the
                                     Arts and the United Jewish Appeal.

Leonard I. Korman             66     Chairman and Chief Executive Officer, Korman          1996            310,285(6)      1.93%
                                     Commercial Properties, Inc. (real estate
                                     development and management). Former member of
                                     regional advisory board of First Union
                                     National Bank, Trustee of Albert Einstein
                                     Health Care Network, Thomas Jefferson
                                     University, and Korman Family Foundation.

Jeffrey P. Orleans            55     Chairman and Chief Executive Officer, Orleans         1986             81,248(7)        *
                                     Homebuilders, Inc. (residential development).
                                     Partner, Orleans Builders and Developers.
                                     Director of Builders League of South Jersey,
                                     the National Association of Home Builders,
                                     Member of the Board of Directors for the
                                     Baldwin School, New Jersey National Bank,
                                     Mainard, Inc. and Resort at Palm Aire, Inc.
                                     Member of Board of Federation of Jewish
                                     Agencies, The William Penn Charter School, The
                                     American Committee for the Weizmann Institute
                                     of Science, JEVS, Pennsylvania Academy of Fine
                                     Arts and President of the Lower Merion Police
                                     Pension Fund.


                                       3





                                                                                                        Shares Beneficially Owned
                                                                                                           on March 22, 2002(1)
                                                  Principal Occupation                    Trustee       -------------------------
           Name              Age                    and Affiliations                       Since           Number        Percent
           ----              ---                    ----------------                       -----           ------        -------
                                                                                            
Trustees Whose
Terms Continue

Class C Trustees; Terms Expire in 2004

George F. Rubin(4)            59     President and Secretary, PREIT-RUBIN, Inc.            1997            373,881(8)      2.28%
                                     (formerly named The Rubin Organization, Inc.,
                                     which was acquired by PREIT in September
                                     1997). Trustee of Lafayette College, Board
                                     Member of Elwyn Institute, Israel Elwyn and
                                     Radnor Hunt Races. Chairman of the Board of
                                     Thorncroft Therapeutic Horseback Riding, Inc.
                                     Former treasurer of the Philadelphia Vietnam
                                     Veteran's Memorial Committee.

Rosemarie B. Greco(4)         55     Principal, Grecoventures LTD. (business               1997            4,625(9)          *
                                     investment and consulting partnership); former
                                     CEO and President, CoreStates Bank, N.A. and
                                     President CoreStates Financial Corp.; former
                                     corporate director of General Accident
                                     Insurance (USA), Cardone Industries, Inc. and
                                     Genuardi's Family Markets, Inc.; currently
                                     director of Exelon Corporation, Radian, Inc.,
                                     Sunoco, Inc.; Trustee of SEI Mutual Funds.
                                     Former chair of the Greater Philadelphia
                                     Chamber of Commerce, former interim president
                                     and CEO of Philadelphia Private Industry
                                     Council, former member of Philadelphia
                                     Planning Commission and Board of Education;
                                     former chair of Workforce Investment Board,
                                     Trustee of the University of Pennsylvania
                                     School of Nursing, and board member, National
                                     Liberty Museum.

Ira M. Lubert                 52     Chairman of Lubert-Adler Partners, L.P., a            2001              1,000(10)       *
                                     company specializing in private equity
                                     investments in real estate and other
                                     entrepreneurial opportunities. Co-founder and
                                     managing partner of LLR Equity Partners, L.P.,
                                     a venture fund making private equity
                                     investments in mid-Atlantic growth companies
                                     and middle market special opportunity
                                     situations. Chairman of GF Management, a
                                     company that specializes in the ownership and
                                     management of underperforming hospitality
                                     properties. Co-founder of Rose Glen Capital, a
                                     hedge fund.


                                       4





                                                                                                        Shares Beneficially Owned
                                                                                                           on March 22, 2002(1)
                                                  Principal Occupation                    Trustee       -------------------------
           Name              Age                    and Affiliations                       Since           Number        Percent
           ----              ---                    ----------------                       -----           ------        -------
                                                                                            
Non-Trustee Executive
Officers

Edward A. Glickman            44     Since September 1997, Executive Vice President         --             172,883(11)     1.07%
                                     and Chief Financial Officer of PREIT. From
                                     1993 to 1997, Executive Vice President and
                                     Chief Financial Officer of The Rubin
                                     Organization, Inc. (now named PREIT-RUBIN,
                                     Inc.).

Joseph F. Coradino            50     Since December 2001, Executive Vice President          --             125,631(12)       *
                                     -- Retail of PREIT and, since November 1998,
                                     Executive Vice President -- Retail Division
                                     and Treasurer, PREIT-RUBIN, Inc. From
                                     September 1997 to November 1998, Senior Vice
                                     President -- Retail Division and Treasurer,
                                     PREIT-RUBIN, Inc. From November 1995 to
                                     September 1997, Executive Vice President --
                                     Office Division of The Rubin Organization,
                                     Inc. (now named PREIT-RUBIN, Inc.).

Douglas S. Grayson            43     Since March 2002, Executive Vice President --          --              56,132(13)       *
                                     Development of PREIT. Since October 1998,
                                     Executive Vice President -- Development of
                                     PREIT-RUBIN, Inc. From September 1997 to
                                     September 1998, Vice President of PREIT-RUBIN,
                                     Inc. From September 1995 to September 1997,
                                     Vice President of The Rubin Organization, Inc.
                                     (now named PREIT-RUBIN, Inc.).

Jeffrey A. Linn               53     Since December 2001, Executive Vice President          --              82,842(14)       *
                                     -- Acquisitions and Secretary of PREIT. From
                                     1995 to December 2001, Senior Vice President
                                     -- Acquisitions and Secretary of PREIT.

David J. Bryant               44     Since September 2000, Senior Vice President --         --              20,391(15)       *
                                     Finance and Treasurer of PREIT. From September
                                     1997 to September 2000, Vice President --
                                     Financial Services of PREIT. From January 1997
                                     to September 1997, Vice President -- Financial
                                     Services of The Rubin Organization, Inc. (now
                                     named PREIT-RUBIN, Inc.).

Raymond J. Trost              46     Since May 2000, Senior Vice President --               --              22,815(16)       *
                                     Multifamily Division of PREIT. From 1995 to
                                     May 2000, Vice President -- Asset Management
                                     of PREIT.

Bruce Goldman                 43     Since December 2001, Senior Vice President --          --               4,739(17)       *
                                     General Counsel of PREIT. From September 2000
                                     to December 2001, Senior Vice President --
                                     Legal of PREIT. From 1997 to 2000, Vice
                                     President of New City Development, the
                                     development subsidiary of Mirage Resorts, Inc.
                                     From 1994 to 1997, Manager of Infrastructure
                                     Finance of Frederic R. Harris, an
                                     architectural engineering firm.

All Trustees and              --     --                                                     --            2,190,530(18)   12.50%
 executive officers as a
 group (15 persons)


---------------
*   Less than one percent.


                                       5


 (1)    Unless otherwise indicated in the following footnotes, each Trustee and
        executive officer has sole voting and investment power with respect to
        all such Shares.
 (2)    Includes 3,000 Shares held directly by Mr. Javitch and 8,625 Shares
        subject to options that are currently exercisable.
 (3)    Includes 50,301 Shares held directly by Mr. Weller, 175,000 Shares
        subject to options that are currently exercisable and 400 Shares held
        by Mr. Weller as custodian for his children under the New York Uniform
        Gifts to Minors Act.
 (4)    Pursuant to the TRO Contribution Agreement, dated as of July 30, 1997
        (the "TRO Contribution Agreement"), PREIT acquired all of the
        outstanding non-voting shares of capital stock of The Rubin
        Organization, Inc. In accordance with Section 5.19 of the TRO
        Contribution Agreement, the Board of Trustees of PREIT elected Ronald
        Rubin, George F. Rubin and Rosemarie B. Greco as Trustees of PREIT to
        fill the vacancies created by the resignations of Robert Freedman, Jack
        Farber and Robert G. Rogers. Ronald Rubin and George F. Rubin are
        brothers.
 (5)    Includes 112,700 Shares held directly by Ronald Rubin, 483,038 Class A
        units of limited partnership interest in PREIT Associates, L.P. (49,006
        of which are held by a trust of which Ronald Rubin and George F. Rubin
        are beneficiaries and 2,776 of which are owned by a corporation of
        which Ronald Rubin is the sole shareholder) that are currently
        redeemable for cash or, at the option of PREIT, for a like number of
        Shares, 150,000 Shares subject to options that are currently
        exercisable, and 6,000 shares held by a trust of which Mr. Rubin is a
        trustee.
 (6)    Includes 244,088 Shares held directly by Mr. Korman, 420 Shares owned
        by Mr. Korman's spouse, 41,824 Shares held in trusts of which Mr.
        Korman is a co-trustee, 19,328 Shares held by trusts of which Mr.
        Korman is a co-trustee and the sole beneficiary and 4,625 Shares
        subject to options that are currently exercisable. Mr. Korman disclaims
        beneficial ownership of the 41,824 Shares held in trusts of which Mr.
        Korman is a co-trustee and the 420 Shares owned by Mr. Korman's spouse.
 (7)    Includes 71,351 Shares held directly by Mr. Orleans, 1,300 Shares held
        by Mr. Orleans' minor children, 220 Shares held by trusts of which Mr.
        Orleans is co-trustee, 252 Shares owned by a corporation 50% of whose
        shares are owned by Mr. Orleans and 8,125 Shares subject to options
        that are currently exercisable. Mr. Orleans disclaims beneficial
        ownership of the 220 Shares held by trusts of which he is co-trustee.
 (8)    Includes 51,562 Shares held directly by George Rubin, 239,919 Class A
        units of limited partnership interest in PREIT Associates, L.P. (49,006
        of which are held by a trust of which Ronald Rubin and George F. Rubin
        are beneficiaries) that are currently redeemable for cash or, at the
        option of PREIT, for a like number of Shares, 75,000 Shares subject to
        options that are currently exercisable and 6,000 Shares held by a trust
        of which Mr. Rubin is a trustee. Also includes 900 Shares held by a
        trust, the beneficiary of which is Mr. Rubin's daughter, and 500 Shares
        held by Mr. Rubin's spouse, as to both of which Mr. Rubin disclaims
        beneficial ownership.
 (9)    Includes 1,000 Shares held directly by Ms. Greco and 3,625 Shares
        subject to options that are currently exercisable.
(10)    All 1,000 Shares are held indirectly by Mr. Lubert through LLR
        Management, L.P., of which Mr. Lubert is a managing director and
        beneficial owner.
(11)    Includes 25,000 Shares held directly by Mr. Glickman, 37,883 Class A
        units of limited partnership interest in PREIT Associates, L.P. that
        are currently redeemable for cash or, at the option of PREIT, for a
        like number of Shares, and 110,000 Shares subject to options that are
        currently exercisable.
(12)    Includes 22,148 Shares held directly by Mr. Coradino, 73,483 Class A
        units of limited partnership interest in PREIT Associates, L.P. that
        are currently redeemable for cash or, at the option of PREIT, for a
        like number of Shares, and 30,000 Shares subject to options that are
        currently exercisable.
(13)    Includes 21,521 Shares held directly by Mr. Grayson, 14,611 Class A
        units of limited partnership interest in PREIT Associates, L.P. that
        are currently redeemable for cash or, at the option of PREIT, for a
        like number of Shares, and 20,000 Shares subject to options that are
        currently exercisable.
(14)    Includes 25,842 Shares held directly by Mr. Linn, 55,000 Shares subject
        to options that are currently exercisable and 2,000 Shares that are
        held by Mr. Linn as custodian for his son under the Pennsylvania
        Uniform Gifts to Minors Act.
(15)    Includes 7,841 Shares held directly by Mr. Bryant, 3,800 Class A units
        of limited partnership interest in PREIT Associates, L.P. that are
        currently redeemable for cash or, at the option of PREIT, for a like
        number of Shares, and 8,750 Shares subject to options that are
        currently exercisable.


                                       6


(16)    Includes 7,065 Shares held directly by Mr. Trost and 15,750 Shares
        subject to options that are currently exercisable.
(17)    All 4,739 Shares are owned by Mr. Goldman directly.
(18)    Includes 664,500 Shares subject to options that are currently
        exercisable and 803,728 Shares subject to Class A units of limited
        partnership interest in PREIT Associates, L.P. that are currently
        redeemable for cash or, at PREIT's option, for a like number of Shares.
        In certain instances, two Trustees beneficially own the same Shares
        because they share voting or investment power over the Shares. These
        Shares have been counted only once in this total.

Required Vote

   Assuming a quorum is present, the two nominees receiving the highest number
of votes cast at the Annual Meeting will be elected Trustees. For this
purpose, the withholding of authority to vote or the specific direction not to
cast a vote, such as a broker non-vote, will not constitute the casting of a
vote in the election of Trustees.

Board Recommendation

   The Board of Trustees recommends that shareholders vote FOR the election of
each of the nominees for Trustee.


                                       7


                                  PROPOSAL TWO
                     THE 2002-2004 LONG-TERM INCENTIVE PLAN


   PREIT's Board of Trustees approved the Pennsylvania Real Estate Investment
Trust 2002-2004 Long-Term Incentive Plan on July 12, 2001. Participants in the
Plan receive awards of Performance Units and Restricted Shares. Performance
units are awards providing for a payment to participants -- which may be in
cash or a combination of cash and Shares -- if PREIT achieves certain
financial targets that are specified in the Plan and described below.
Restricted Share awards are Shares that a participant may not sell, assign,
transfer or pledge until those Shares have vested. A portion of the Restricted
Share awards vest based on PREIT's achievement of financial targets, some of
which are specified in the Plan and some of which will be determined by
PREIT's Executive Compensation and Human Resources Committee. The balance of
the Restricted Share awards vest over time subject to the participant's
continued employment with PREIT.

   The Plan as a whole is not subject to shareholder approval. Only the
material terms of the financial targets relating to the Performance Units that
may be granted under the Plan are being submitted to shareholders for their
approval. Consequently, if the material terms of these financial targets are
not approved, the Performance Units granted under the Plan will become null
and void and no additional Performance Units may be granted. However, the
aspects of the Plan involving the Restricted Shares that may be granted will
remain in effect.

Performance Units

   The financial targets relating to the Performance Units were established to
motivate PREIT's top executive officers and to focus their attention on
critical financial indicators that measure PREIT's success. The material terms
of the financial targets relating to the Performance Units that are subject to
shareholder approval are:

   o the business criterion on which the financial targets are based;

   o the employees eligible to be awarded Performance Units based on the
     achievement of the financial targets; and

   o the maximum amount of compensation that can be paid to any eligible
     employee if the financial targets are obtained.

   PREIT will make payments to participants in respect of their Performance
Units if certain financial targets are reached in 2004. The financial targets
are based on PREIT's publicly reported per share "funds from operations" for
2004, subject to adjustment to account for certain non-recurring items as
described in the Plan. None of the Performance Units will vest if PREIT does
not achieve at least $3.12 of funds from operations per share in 2004, one-
third will vest if PREIT achieves $3.12 of funds from operations per share in
2004, two-thirds will vest if PREIT achieves $3.18 of funds from operations
per share in 2004 and all of the Performance Units will vest if PREIT achieves
at least $3.24 of funds from operations per share in 2004. PREIT's Executive
Compensation and Human Resources Committee, if applicable and in their good
faith judgment, will adjust the preceding target levels of funds from
operations per share to account for certain material asset sales by PREIT and
its subsidiaries or the issuance of a significant amount of Shares by PREIT.

   The executive officers of PREIT and its subsidiaries who hold the office of
Executive Vice President or a higher office are eligible to participate in the
Plan. This group currently includes, among others, the four officers named in
the table below, who have been allocated Performance Units, and Edward A.
Glickman, who has not been allocated any Performance Units. The number of
Performance Units that the six participants who have been allocated
Performance Units will receive is set forth in the Plan and each Performance
Unit is valued at one dollar per unit. In addition to the Performance Units
allocated to specific participants by the Plan, 700,000 unallocated
Performance Units are available for future issuances under the Plan to any
individual in the group of eligible officers whom PREIT's Executive
Compensation and Human Resources Committee designates to receive Performance
Units. Any such additional issuances will occur on or before December 31,
2002. The maximum value of any participant's Performance Unit award is
$1,200,000. The following table shows the monetary value and number of
Performance Units awarded to each participant listed in the Summary
Compensation Table and to all participants as a group.


                                       8


                            Performance Unit Awards





                                                         Monetary Value of        Number of
Name and Principal Position                              Performance Units    Performance Units
---------------------------                              -----------------    -----------------
                                                                              
Ronald Rubin                                                 $1,200,000           1,200,000
  Chairman, Chief Executive
  Officer and Trustee
Jonathan B. Weller                                           $  900,000             900,000
  President, Chief Operating
  Officer and Trustee
George F. Rubin                                              $  700,000             700,000
  President, PREIT-RUBIN, Inc.
  and Trustee
Joseph F. Coradino                                           $  600,000             600,000
  Executive Vice President -- Retail
All current executive officers as a group                    $4,250,000           4,250,000
All current non-executive Trustees as a group                        $0                   0
All current non-executive officers as a group                        $0                   0



Restricted Share Awards

   The Restricted Shares issuable under the Plan were awarded on March 22,
2002. The number of Restricted Shares awarded to each participant was
determined by dividing the monetary value of his award by the average closing
price of PREIT's Shares during the 20 trading days preceding February 15,
2002, which was $23.12. The maximum initial value of any participant's
Restricted Share award, based on that calculation, was $600,000, and the
maximum number of Restricted Shares awarded to any participant was 25,952.

   One half of a participant's Restricted Share award is subject to time
vesting and the other half is subject to performance-based vesting. So long as
a participant remains employed by PREIT, he will vest in one half of his
Restricted Share award in three equal installments on each February 15 in
2003, 2004 and 2005. Participants may vest in all or a portion of the other
half of their Restricted Share awards in equal installments in 2003, 2004 and
2005, depending on the achievement of certain financial targets in each of
those years. Only financial targets with respect to 2002 are set forth in the
Plan, and PREIT's Executive Compensation and Human Resources Committee, in its
sole discretion, will decide whether such targets have been reached. The
Committee will also establish the financial targets for 2003 and 2004. PREIT
will pay and amount equal to dividends on a current basis, and participants
have voting rights, with respect to their non-vested Restricted Shares.


                                       9


   The following table shows the monetary value and number of Restricted Share
awarded to each participant listed in the Summary Compensation Table and to
all participants as a group. Edward A. Glickman, PREIT's Chief Financial
Officer, has not been awarded any Restricted Shares under the Plan.


                            Restricted Share Awards






                                                                      Monetary Value of           Number of
Name and Principal Position                                         Restricted Share Awards   Restricted Shares
---------------------------                                         -----------------------   -----------------
                                                                                              
Ronald Rubin                                                              $  600,000                25,952
  Chairman, Chief Executive
  Officer and Trustee
Jonathan B. Weller                                                        $  450,000                19,464
  President, Chief Operating
  Officer and Trustee
George F. Rubin                                                           $  330,000                14,273
  President, PREIT-RUBIN, Inc.
  and Trustee
Joseph F. Coradino                                                        $  315,000                13,625
  Executive Vice President -- Retail
All current executive officers as a group                                 $2,145,000                92,778
All current non-executive Trustees as a group                                     $0                     0
All current non-executive officers as a group                                     $0                     0



Termination of Employment and Change of Control

   If a participant terminates employment for Good Reason (as defined in his
employment agreement) or his employment is terminated as a result of his
death, disability or by PREIT without Cause (as defined in the participant's
employment agreement) then he will vest in (1) all unvested Restricted Shares
subject to time vesting, (2) a prorated portion of his unvested Restricted
Shares subject to performance vesting in the period in which the participant's
employment is terminated, provided the financial targets required for such
shares to vest are achieved, and (3) all of his Performance Units to the same
extent that he would have vested in such units had he remained an employee
until the date on which PREIT's Executive Compensation and Human Resources
Committee determines that PREIT has (or has not) attained any of the financial
targets for 2004.

   If a participant terminates employment without Good Reason, or PREIT
terminates his employment for Cause, then he will forfeit all unvested awards.

   If a participant is an employee on the date of a Change of Control of PREIT
(as defined in the participant's employment agreement), he will vest in all
unvested Restricted Shares and Performance Units. If a participant terminates
employment prior to a Change of Control for Good Reason, or his employment is
terminated as a result of his death or disability or by PREIT without Cause,
and the Change of Control occurs in the year of such termination, then he will
vest in a prorated portion of his unvested Restricted Shares subject to
performance vesting. If a participant terminates employment prior to a Change
of Control for Good Reason, or his employment is terminated as a result of his
death or disability or by PREIT without Cause, and the Change of Control
occurs before the end of 2004, then he will vest in a prorated portion of his
unvested Performance Units.

Administration and Amendment

   PREIT's Executive Compensation and Human Resources Committee administers the
Plan. The Committee has the power to interpret disputed provisions of the Plan
and determine all questions concerning awards under the Plan.

   The Board of Trustees reserves the right to amend or terminate the Plan at
any time. Shareholder approval is required for amendments either to modify the
material terms of the financial targets for which vesting in the

                                       10


Performance Units are based or that are required to be voted on by
shareholders under the rules of the New York Stock Exchange. In addition,
PREIT's chief executive officer may amend the Plan, so long as any such
amendment is technical and non-material in nature.

                                   *   *   *

   The foregoing is a description of the material features of the Plan. You
should read the Plan, which is attached as Exhibit A to this proxy statement,
for additional information.

Required Vote

   Assuming a quorum is present at the Annual Meeting, the material terms of
the financial targets relating to the Performance Units will be approved if a
majority of the Shares present in person or by proxy and casting a vote on
this proposal vote "FOR" the proposal. For purposes of the foregoing,
abstentions and broker non-votes shall not be deemed to be votes cast.

Board Recommendation

   The Board of Trustees believes that the proposal to approve the material
terms of the financial targets relating to the Performance Units (i.e., the
business criterion on which the financial targets are based, the employees
eligible to be awarded Performance Units and the maximum amount of
compensation that can be paid to any eligible employee if the financial
targets are obtained) is in the best interests of PREIT and its shareholders
and unanimously recommends a vote FOR approval of such material terms.


                                 PROPOSAL THREE
                                 OTHER MATTERS


   PREIT's management knows of no matters other than those stated above to come
before the meeting. However, if any other matters should properly come before
the meeting, the enclosed proxy confers discretionary authority with respect
to these matters.


                                       11


                             ADDITIONAL INFORMATION


Summary Compensation Table

   The following table shows information concerning the compensation paid by
PREIT for the last three fiscal years to PREIT's Chief Executive Officer and
its four other most highly compensated executive officers.




                                                                                             Long Term
                                                          Annual Compensation           Compensation Awards
                                                          -------------------           -------------------
             Name and Principal                                                    Restricted Stock                    All Other
                   Position                     Year    Salary($)   Bonus($)(4)        Awards($)       Options(#)   Compensation($)
                   ---------                    ----    ---------   -----------        ---------       ----------   ---------------
                                                                                                  
Ronald Rubin                                    2001     378,895      140,000           120,004(5)           --              --
 Chairman, Chief Executive                      2000     378,898      255,000           363,200(6)           --              --
 Officer and Trustee                            1999     345,000      120,750                --              --              --

Jonathan B. Weller(1)                           2001     330,746      116,000            89,997(5)           --          64,535
 President, Chief Operating                     2000     330,746      212,000           272,400(6)           --          48,911
 Officer and Trustee                            1999     315,000       97,650                --              --          50,693

Edward A. Glickman(2)                           2001     300,000      150,000                --              --          50,150
 Executive Vice President and                   2000     275,000      137,500           448,500         100,000          51,000
 Chief Financial Officer                        1999     250,000      125,000                --              --          51,665

George F. Rubin(3)                              2001     262,496       92,000            89,997(5)           --           6,800
 President, PREIT-RUBIN, Inc.                   2000     262,496       77,500           272,400(6)           --           6,800
 and Trustee                                    1999     250,000       53,169                --              --           6,742

Joseph F. Coradino(3)                           2001     250,000      110,000            65,000(5)           --           6,800
 Executive Vice President --                    2000     236,250       67,500           136,200(6)           --           6,800
 Retail                                         1999     225,000       37,978                --              --           7,058


---------------
(1) The amounts shown in the "All Other Compensation" column for Mr. Weller
    represent $20,829 of annual premium payments on life insurance provided
    under Mr. Weller's employment agreement for 2001, and $9,750 for each of
    2000 and 1999; matching contributions under PREIT's 401(k) retirement plan
    of $5,076 for 2001, $6,800 for 2000 and $8,463 for 1999; and contributions
    by PREIT under its Supplemental Retirement Plan of $38,630 for 2001,
    $32,361 for 2000 and $32,480 for 1999.
(2) The salary and bonus for Mr. Glickman in 1999 reflect payments made in the
    fourth quarter of 2000 of $20,000 and $53,700, respectively. Those payments
    related to Mr. Glickman's services in 1999, and were paid pursuant to Mr.
    Glickman's amended and restated employment agreement with PREIT which was
    entered into on November 10, 2000. The restricted stock awarded to Mr.
    Glickman in 2000 vests in five equal annual installments beginning on
    January 1, 2000, contingent upon his continued employment on the vesting
    dates. The amounts shown in the "All Other Compensation" column for Mr.
    Glickman represent $25,000 in contributions to Mr. Glickman's retirement
    account for each of 2001, 2000 and 1999; matching contributions under
    PREIT's 401(k) retirement plan of $5,950 for 2001, $6,800 for 2000 and
    $7,465 for 1999; and a credit to an account established for Mr. Glickman of
    $19,200 for each of 2001, 2000 and 1999 related to dividend equivalent
    rights on a notional 50,000 Shares. The $19,200 for 1999 was paid in the
    fourth quarter of 2000 pursuant to Mr. Glickman's amended and restated
    employment agreement, but related to his services in 1999. The amounts
    credited to such account vest in five equal annual installments beginning
    on January 1, 2000, contingent on continued employment on those dates.
(3) The amounts shown in the "All Other Compensation" column for George Rubin
    and Joseph Coradino represent matching contributions under PREIT's 401(k)
    retirement plan.
(4) The bonuses for fiscal 2001 were paid on February 15, 2002.
(5) The restricted stock vested in full on February 15, 2002.
(6) The restricted stock vests in three equal installments on each of March 1,
    2001, February 15, 2002 and February 15, 2003, contingent upon continued
    employment on those dates. PREIT pays an amount equal to dividends on the
    unvested restricted stock as dividends are declared by PREIT's Board of
    Trustees on PREIT's outstanding Shares.


                                       12


Employment Agreements

   Ronald Rubin entered into an employment agreement with PREIT as of April 2,
2002 for an initial term through December 31, 2004 and extending year-to-year
thereafter unless either party gives at least 120 days advance written notice
that the term is not to be extended. Under the Agreement, Mr. Rubin serves as
Chairman and Chief Executive Officer of PREIT. He is entitled to a base salary
under the agreement of $390,000 for 2002, which may be increased in subsequent
years at the discretion of PREIT's Executive Compensation and Human Resources
Committee. In accordance with the agreement, Mr. Rubin is eligible for a bonus
of up to $331,500 for 2002 and he received $1,200,000 worth of Performance
Units and 25,952 Restricted Shares subject to the terms of PREIT's 2002-2004
Long-Term Incentive Plan. PREIT agreed to contribute $100,000 per year to a
supplemental executive retirement plan that will accrue interest at the rate
of 10% per year, compounded annually, payable to Mr. Rubin within 60 days of
the termination of his employment for any reason.

   Jonathan B. Weller entered into an employment agreement with PREIT as of
March 22, 2002 for an initial term through December 31, 2004 and extending
year-to-year thereafter unless either party gives at least 120 days advance
written notice that the term is not to be extended. Under the agreement, Mr.
Weller serves as President and Chief Operating Officer of PREIT. He is
entitled to a base salary under the agreement of $340,000 for 2002, which may
be increased in subsequent years at the discretion of PREIT's Executive
Compensation and Human Resources Committee. In accordance with the agreement,
Mr. Weller is eligible for a bonus of up to $272,000 for 2002 and he received
$900,000 worth of Performance Units and 19,464 Restricted Shares subject to
the terms of PREIT's 2002-2004 Long-Term Incentive Plan. In the agreement,
PREIT acknowledged a continuing obligation to contribute amounts to Mr.
Weller's supplemental retirement plan according to a formula contained in that
plan. PREIT also acknowledged a continuing obligation to make payments under
existing split dollar insurance agreements for the benefit of Mr. Weller's
designated beneficiaries. See footnote (1) to the Summary Compensation Table
for PREIT's payments pursuant to these arrangements in 1999, 2000 and 2001.

   Edward A. Glickman entered into an employment agreement with PREIT on
November 10, 2000. The Employment Agreement provides that Mr. Glickman is to
serve as Chief Financial Officer of PREIT. The term of the employment
agreement was made retroactively effective to January 1, 1999 and expires on
September 30, 2002. The term is automatically extended for additional two-year
periods unless and until either party gives notice of termination at least one
year prior to the end of the then current term. Mr. Glickman's base salary for
2001 was $300,000 and his salary increases by at least $25,000 per year every
January 1st. The agreement also provides for the payment of a bonus equal to
one half of Mr. Glickman's base salary each year, subject to Mr. Glickman's
meeting performance goals established by PREIT's compensation committee. Mr.
Glickman achieved the performance goals for 2001 and, accordingly, received
the full potential bonus payable with respect to 2001. In accordance with the
Employment Agreement, PREIT granted Mr. Glickman (i) 25,000 Restricted Shares
that vest in five equal annual installments beginning January 1, 2000, (ii) an
incentive stock option to purchase 11,210 Shares at $17.94 per Share that
vests in two equal annual installments beginning on January 1, 2003, (iii) a
nonqualified stock option to purchase 88,790 Shares at $17.94 per Share that
vests in five annual installments, 20,000 Shares on November 10, 2000, 20,000
Shares on January 1, 2001, 20,000 Shares on January 1, 2002, 14,395 Shares on
January 1, 2003 and 14,395 Shares on January 1, 2004, and (iv) 50,000 dividend
equivalent rights that vest in five equal annual installments beginning on
January 1, 2000. PREIT has agreed to contribute $25,000 per year to a
supplemental executive retirement plan that will accrue interest at the rate
of 10% per year, compounded annually, payable to Mr. Glickman within 60 days
of the termination of his employment for any reason.

   George F. Rubin entered into an employment agreement with PREIT Services,
LLC as of March 22, 2002 for an initial term through December 31, 2004 and
extending year-to-year thereafter unless either party gives at least 120 days
advance written notice that the term is not to be extended. The obligations of
PREIT Services under the agreement are guaranteed by PREIT. Under the
Agreement, Mr. Rubin serves as President of PREIT Services. He is entitled to
a base salary under the agreement of $290,000 for 2002, which may be increased
in subsequent years at the discretion of PREIT's Executive Compensation and
Human Resources Committee. In accordance with the agreement, Mr. Rubin is
eligible for a bonus of up to $232,000 for 2002 and he received $700,000 worth
of Performance Units and 14,273 Restricted Shares subject to the terms of
PREIT's 2002-2004 Long-Term Incentive Plan. PREIT Services has agreed to
contribute $25,000 per year to a supplemental

                                       13


executive retirement plan that will accrue interest at the rate of 10% per
year, compounded annually, payable to Mr. Rubin within 60 days of the
termination of his employment for any reason.

   Joseph F. Coradino entered into an employment agreement with PREIT Services,
LLC as of March 22, 2002 for an initial term through December 31, 2004 and
extending year-to-year thereafter unless either party gives at least 120 days
advance written notice that the term is not to be extended. The obligations of
PREIT Services under the agreement are guaranteed by PREIT. Under the
Agreement, Mr. Coradino serves as Executive Vice President -- Retail both of
PREIT Services and of PREIT. He is entitled to a base salary under the
agreement of $280,000 for 2002, which may be increased in subsequent years at
the discretion of PREIT's Executive Compensation and Human Resources
Committee. In accordance with the agreement, Mr. Coradino is eligible for a
bonus of up to $196,000 for 2002 and he received $600,000 worth of Performance
Units and 13,625 Restricted Shares subject to the terms of PREIT's 2002-2004
Long-Term Incentive Plan. PREIT Services has agreed to contribute $25,000 per
year to a supplemental executive retirement plan that will accrue interest at
the rate of 10% per year, compounded annually, payable to Mr. Coradino within
60 days of the termination of his employment for any reason.

   The employment agreements described above contain provisions addressing the
consequences of a termination of each executive's employment. With respect to
each executive other than Mr. Glickman, if PREIT or PREIT Services terminates
the executive's employment without specified cause, or if the executive
terminates his employment for specified good reason (including the delivery by
PREIT or PREIT Services of notice that the term of the agreement will not be
renewed), the executive is entitled to a lump-sum severance payment equal to
the greater of (a) his base salary through the end of the term plus a portion
of the executive's average bonus for the last three years prorated through the
date of termination, or (b) a multiple of the sum of the executive's then
current salary plus a portion of the executive's average bonus for the last
three years prorated through the date of termination. For purposes of the
preceding sentence, the phrase "average bonus for the last three years" means
the average percentage of the executive's salary represented by his annual
bonus paid in each of the prior three years, multiplied by his then current
salary. For Ronald Rubin, the multiple related to part (b) above is three, for
Jonathan Weller, the multiple is two and one-half, for George Rubin, the
multiple is two and one-half and for Joseph Coradino, the multiple is two. If
such a termination occurs within a specified amount of time following a change
of control of PREIT, then Jonathan Weller's multiple is increased to three. In
the same circumstances, without regard to whether the termination is preceded
by a change of control, Mr. Glickman is entitled to three times the sum of his
then current salary plus the average of his annual bonus over the last three
years. Additionally, Mr. Glickman is entitled to terminate his employment for
good reason if Ronald Rubin ceases to be the PREIT's Chief Executive Officer
for any reason.

   If the executive dies or becomes disabled during the term of his employment
agreement, the executive or his estate is entitled to continue to receive his
then current salary for the longer of the remainder of the term or one year
(two years with respect to Edward Glickman and three years with respect to
Ronald Rubin), and to receive a prorated portion of any bonus payable with
respect to established performance goals that the company achieves in the year
of the executive's disability or death.

   Additionally, the employment agreements provide that if PREIT terminates any
of the executives without cause, if the executive terminates his employment
for good reason or if the executive dies or becomes disabled:

   o the executive's Restricted Shares and options (and, with respect to Mr.
     Glickman, dividend equivalent rights) immediately become vested; and

   o the executive -- in some cases including his dependents -- is entitled to
     continuing medical benefits for a specified number of days.

   As to Ronald Rubin, Jonathan Weller and Edward Glickman, the employment
agreements provide that, in the event any payments to such executives result
in the imposition on them of an excise tax under Section 4999 of the Code,
PREIT will pay to such executive an additional amount equal to one half of the
excise tax.


                                       14


Stock Options

   The following table presents information as to the exercise of options to
purchase Shares and the fiscal year-end value of unexercised options for all
of the persons named in the Summary Compensation Table. None of the persons
named in the Summary Compensation Table were granted options during fiscal
2001.


                   Aggregate Option Exercises in Fiscal 2001
                      and December 31, 2001 Option Values





                                                                            Number of Unexercised          Value of Unexercised
                                                  Shares                         Options at               In-the-Money Options at
                                                 Acquired                     December 31, 2001            December 31, 2001(1)
                                                    On        Value      ---------------------------    ---------------------------
                     Name                        Exercise    Realized   Exercisable    Unexercisable    Exercisable   Unexercisable
 ---------------------------------------------   --------    --------   -----------    -------------    -----------   -------------
                                                                                                    
Ronald Rubin .................................      --          --        112,500          37,500              --              --
Jonathan B. Weller ...........................      --          --        175,000               0        $247,500              --
Edward A. Glickman ...........................      --          --         77,500          72,500        $214,400        $321,600
George F. Rubin ..............................      --          --         56,250          18,750              --              --
Joseph F. Coradino ...........................      --          --         22,500           7,500              --              --


---------------
(1) In-the-money options are those where the fair market value of the
    underlying securities exceeds the exercise price of the option. The closing
    price of the Shares on December 31, 2001 was $23.20 per Share.

Stock Option Plans

   Under PREIT's 1990 Stock Option Plan for Non-Employee Trustees (the "Trustee
Option Plan"), PREIT is authorized to issue to its Trustees who are not
employees of PREIT or any of its affiliates nonqualified stock options to
purchase up to 100,000 Shares. Options to purchase 88,000 Shares have been
issued under the Trustee Option Plan, 28,125 of which have been exercised and
7,500 have expired without being exercised. The Executive Compensation and
Human Resources Committee administers the Trustee Option Plan. The exercise
price per Share of options granted under the Trustee Option Plan must equal
100% of the fair market value of the Shares underlying the options on the
grant date and the options generally expire 10 years from the grant date
unless extended in the Compensation Committee's discretion. The Trustee Option
Plan was amended in 2001 to cease the automatic annual grant in January of
each year to each non-employee Trustee of an option for 2,500 Shares. The
Trustee Option Plan continues to provide for an automatic grant of an option
for 5,000 Shares to newly elected non-employee Trustees. Option grants may not
be made after January 31, 2004, unless the plan is extended. Additional
options may be granted under the Trustee Option Plan to purchase a maximum of
19,500 Shares.

   PREIT's Restricted Share Plan for Non-Employee Trustees, adopted in 2002,
authorizes PREIT to issue to its Trustees who are not employees of PREIT or
any of its affiliates up to 50,000 Restricted Shares. The plan provides for
the automatic grant of 1,000 shares to each non-employee Trustee on January 31
of each year, and 5,000 Restricted Shares have been granted under the plan.
The Restricted Shares vest in three approximately equal annual installments so
long as the recipient remains a Trustee of PREIT. The plan is administered by
the Executive Compensation and Human Resources Committee.

   Under PREIT's 1999 Equity Incentive Plan (the "1999 Plan"), PREIT has
granted incentive stock options, designed to qualify under Section 422 of the
Code, and nonqualified stock options to purchase 100,000 Shares to the
officers and other key employees of PREIT and PREIT-RUBIN and their subsidiary
entities. The Executive Compensation and Human Resources Committee administers
the 1999 Plan. The 1999 Plan requires that the exercise price of options
granted under the plan not be less than the fair market value of the Shares
underlying the options on the grant date and the term of each option granted
may not exceed 10 years. Additionally, the 1999 Plan provides for the grant of
restricted stock, stock appreciation rights, performance stock, dividend
equivalent rights and/or loans to the officers and other key employees of
PREIT and PREIT-RUBIN and their subsidiary entities. PREIT has awarded 272,314
shares of restricted stock and 50,000 dividend equivalent rights under the
1999 Plan. In addition to 400,000 Shares that may be granted under the 1999
Plan, Shares that are subject to

                                       15


options under PREIT's 1990 Incentive and Nonqualified Stock Option Plan, 1997
Stock Option Plan and 1998 Stock Option Plan that expire or otherwise
terminate automatically will also be made available for awards under the 1999
Plan. As of March 23, 2002, an additional 209,561 Shares were available for
awards under the 1999 Plan. The 1999 Plan also covers the grant of restricted
stock under the 2002-2004 Long-Term Incentive Plan.

Transactions with Management

   On September 30, 1997, PREIT consummated a series of related transactions
(the "TRO Transaction") in which PREIT, among other things: (i) formed a
Delaware limited partnership (the "Operating Partnership"), of which PREIT is
the sole general partner; (ii) transferred to the Operating Partnership
PREIT's interests in its real property assets, or the economic benefits
thereof; (iii) caused the Operating Partnership to acquire all of the issued
and outstanding non-voting common shares of The Rubin Organization, Inc.
("TRO") (renamed PREIT-RUBIN, Inc.), a commercial real estate development and
management firm, representing 95% of the total equity of TRO, in exchange for
200,000 Class A units of limited partnership interest in the Operating
Partnership ("Class A OP Units") and a contingent obligation to issue up to
800,000 additional Class A OP Units over a five year period based on the
levels of PREIT's funds from operations ("FFO") per share during such period;
(iv) caused the Operating Partnership to acquire, or to become obligated to
acquire, in exchange for additional Class A OP Units, the interests of certain
affiliates of TRO ("TRO Affiliates"), or their rights or obligations to
acquire interests, in three existing shopping centers or portions thereof, and
in two shopping centers then under construction (the "Development
Properties"); (v) caused the Operating Partnership to acquire the pre-
development rights, subject to the obligations of certain TRO Affiliates, in
certain additional proposed shopping centers (the "Predevelopment
Properties"); (vi) implemented, directly or indirectly, employment agreements
with ten members of TRO management, including Ronald Rubin, who became PREIT's
Chief Executive Officer and has since become its Chairman as well, George F.
Rubin, who continued as President of PREIT-RUBIN, Edward Glickman, who became
PREIT's Chief Financial Officer, Joseph F. Coradino, who has since become
PREIT's Executive Vice President -- Retail Division, Douglas S. Grayson, who
has since become PREIT's Executive Vice President -- Development, and David J.
Bryant, who has since become PREIT's Senior Vice President -- Finance and
Treasurer; and (vii) elected three designees of TRO, Ronald Rubin, George F.
Rubin and Rosemarie B. Greco, as Trustees of PREIT.

   The Class A OP Units referred to above are redeemable by the Operating
Partnership, at the option of the holder, beginning one year following the
dates of their respective issuance for an amount per unit equal to the average
closing price of a Share on the twenty trading days immediately before the
date notice of redemption is received by PREIT in its capacity as general
partner of the Operating Partnership. PREIT has the right to acquire any Class
A OP Units tendered for redemption for (i) cash, or (ii) Shares, on the basis
of one Share for each Class A OP Unit, subject to adjustments for share splits
and other capital changes. Redeeming holders of Class A OP Units who receive
Shares from PREIT will have certain rights to cause PREIT to register such
Shares for resale under the federal securities laws. During the five-year
period following the completion of the TRO Transaction, Ronald Rubin, George
F. Rubin, Edward Glickman, Joseph F. Coradino, Douglas S. Grayson and David J.
Bryant are each prohibited from reselling more than one-half of the Shares to
which he would be entitled upon redemption of Class A OP Units, so long as he
continues to hold an executive position with PREIT or PREIT-RUBIN.

   In the TRO Transaction, in exchange for their direct and indirect interests
in TRO and certain affiliated entities: (i) Ronald Rubin received, directly or
indirectly, beneficial ownership of 144,359 Class A OP Units; (ii) George F.
Rubin received, directly or indirectly, beneficial ownership of 86,462 Class A
OP Units; (iii) Edward Glickman received beneficial ownership of 13,633 Class
A OP Units; (iv) Joseph F. Coradino received beneficial ownership of 28,691
Class A OP Units; (v) Douglas S. Grayson received beneficial ownership of
5,968 Class A OP Units; and (vi) David J. Bryant received beneficial ownership
of 1,639 Class A OP Units. The amounts shown above for each of Ronald Rubin
and George F. Rubin include 12,167 Class A OP Units held by a trust of which
both are beneficiaries.

   As stated above, the TRO Transaction also entitled the TRO Affiliates to
receive up to 800,000 additional Class A OP Units based on PREIT's FFO for the
five year period beginning September 30, 1997. In 1998, and again in 2002 with
respect to 2001 only, these "hurdle" and "target" FFO levels were adjusted by
a special committee of PREIT's Trustees to account for the dilutive effects of
public offerings of PREIT's shares that

                                       16


occurred in 1997 and 2001. For the period beginning September 30, 1997 and
ending December 31, 1999, the Operating Partnership issued 330,000 Class A OP
Units to the TRO Affiliates. On April 9, 2001, the Operating Partnership
issued 167,500 Class A OP Units attributable to the period from January 1,
2000 through December 31, 2000. As part of this issuance: (i) Ronald Rubin
received beneficial ownership of 66,159 Class A OP Units; (ii) George F. Rubin
received beneficial ownership of 30,210 Class A OP Units; (iii) Edward
Glickman received beneficial ownership of 7,553 Class A OP Units; (iv) Joseph
F. Coradino received beneficial ownership of 12,273 Class A OP Units; (v)
Douglas S. Grayson received beneficial ownership of 3,776 Class A OP Units;
and (vi) David J. Bryant received beneficial ownership of 944 Class A OP
Units. For the period from January 1, 2001 through December 31, 2001, the TRO
Affiliates earned 167,500 Class A OP Units. These Units have not yet been
issued, but, collectively, Ronald Rubin, George F. Rubin, Edward Glickman,
Joseph F. Coradino, Douglas S. Grayson and David J. Bryant are expected to
receive a significant portion of these Units upon issuance. As of December 31,
2001, the TRO Affiliates were eligible to receive the remaining 135,000 Class
A OP Units for the period from January 1, 2002 through September 30, 2002,
depending on PREIT's FFO during that period.

   The TRO Affiliates also are eligible to receive additional Class A OP Units
in respect of PREIT's payment for the Development and Predevelopment
Properties, all in accordance with the valuation and payment provisions of the
applicable agreements. No Class A OP Units were issued to the TRO Affiliates
during 2001 in respect of the Development and Predevelopment Properties.

   PREIT anticipates that holders of Class A OP Units will receive
distributions at the approximate times, and in the same amounts, as PREIT pays
dividends to its Shareholders. Certain of the Class A OP Units issued in the
TRO transaction are subject to pledges in favor of the Operating Partnership
until certain obligations of TRO are satisfied.

   The amount of consideration PREIT pays and the manner in which it would be
paid was approved by a Special Acquisition Committee of the Board of Trustees
and by the Board of Trustees. The Board received an opinion from Lehman
Brothers that the consideration to be paid was fair from a financial point of
view, and PREIT's Shareholders approved PREIT's completion of the TRO
Transaction at a Special Meeting of Shareholders held on September 29, 1997.
The Board of Trustees has established a committee currently consisting of
Leonard I. Korman, Chair and Rosemarie B. Greco for the purpose of addressing
and resolving any matters pertaining to the TRO Transaction as they arise on
an on-going basis. In connection with the monitoring of the TRO Transaction,
the committee determined to lower the financial performance benchmarks
established for the payment of additional Class A OP Units due to the dilutive
effect of PREIT's December 1997 public offering of 4,600,000 Shares and
PREIT's July 2001 public offering of 2,000,000 Shares.

   PREIT-RUBIN provides real estate management and other services to 18
properties in which Ronald Rubin and/or other TRO Affiliates have direct or
indirect interests. Total revenues earned by PREIT-RUBIN for such services
were approximately $2,900,000 for the calendar year ended December 31, 2001.
As of December 31, 2001, approximately $300,000 was due from these affiliates.
Of this amount, approximately $200,000 was collected subsequent to December
31, 2001. The remaining approximately $100,000 is due in installments to be
paid through 2010, plus interest where applicable. PREIT and PREIT-RUBIN lease
one property from an entity in which Ronald Rubin and George F. Rubin have
indirect interests. The lease term currently is scheduled to expire on July
31, 2009. In 2001, PREIT and PREIT-RUBIN paid approximately $277,000 on this
lease. Ronald Rubin and George F. Rubin, collectively with members of their
immediate family, own less than a 16.66% interest in the entity that leases
the property to PREIT-RUBIN.


                                       17


Board Matters

   PREIT has a standing Executive Compensation and Human Resources Committee, a
standing Audit Committee and a standing Property Committee. PREIT does not
have a standing nominating committee.

   The Executive Compensation and Human Resources Committee, which is currently
comprised of Leonard I. Korman, Chair, Rosemarie B. Greco and Lee H. Javitch,
met three times during fiscal 2001. The principal duties of the Compensation
Committee are to recommend compensation arrangements for PREIT's executive
officers and to administer PREIT's stock option and equity incentive plans.

   The Audit Committee, which is currently comprised of Rosemarie B. Greco,
Chair, Lee H. Javitch and Ira Lubert, met five times during fiscal 2001. The
principal duties of the Audit Committee are to recommend independent public
accountants for appointment by PREIT; to review with management and the
independent accountants PREIT's annual financial statements and related
footnotes; to review PREIT's internal audit activities; to review with the
independent accountants the planned scope and results of the annual audit and
their reports and recommendations; and to review with the independent
accountants matters relating to PREIT's system of internal controls.

   In addition to the Compensation Committee and the Audit Committee, PREIT has
a standing Property Committee. The Property Committee, which is currently
comprised of Ronald Rubin, Chair, Leonard I. Korman, Ira Lubert and Jeffrey P.
Orleans, met three times in fiscal 2001. The principal duties of the Property
Committee are to review acquisitions and dispositions of portfolio properties
proposed by management and make recommendations thereon to the Board of
Trustees.

   The Board of Trustees has constituted a Special Committee, consisting of
Leonard I. Korman, Chair, and Rosemarie B. Greco to review on an on-going
basis any issues which may arise in the implementation of the TRO Transaction.
The Special Committee met once in fiscal 2001.

   The Board of Trustees met seven times in fiscal 2001. Trustees who are not
officers of PREIT receive an annual retainer of $15,000, plus $1,000 per Board
of Trustees meeting and committee meeting attended ($1,500 for a committee
chair) and $500 for telephonic meetings. With the exception of Jeffrey P.
Orleans, all of the Trustees attended at least 75% of Board and applicable
committee meetings in fiscal 2001.

Section 16(a) Beneficial Ownership Reporting Compliance

   Section 16(a) of the Securities Exchange Act of 1934, as amended, requires
PREIT's executive officers and Trustees and persons who own more than ten
percent of a registered class of PREIT's equity securities (collectively, the
"reporting persons") to file reports of ownership and changes in ownership
with the Securities and Exchange Commission and to furnish PREIT with copies
of these reports.

   Based on PREIT's review of the copies of the reports it has received, and
written representations received from certain reporting persons with respect
to the filing of reports on Form 3, 4 and 5, PREIT believes that all filings
required to be made by the reporting persons for fiscal 2001 were made on a
timely basis, except that Raymond J. Trost was late in reporting that he
became a reporting person in May of 2001 and Jeffrey A. Linn was late in
reporting the retirement of 707 of his Restricted Shares in March of 2001. In
addition, Ronald Rubin was late in reporting the acquisition of 6,000 Shares
in March of 2000 by a trust of which he is a trustee.

Compensation Committee Interlocks and Insider Participation

   During fiscal 2001, the late Sylvan M. Cohen, while serving as PREIT's
Chairman, served on the Compensation Committee of Orleans Homebuilders, Inc,
and the Chairman of the Board and Chief Executive Officer of Orleans
Homebuilders, Inc., Jeffrey P. Orleans, served as a Trustee of PREIT.


                                       18


Report of Executive Compensation and Human Resources Committee on Executive
Compensation

   Compensation for PREIT's executive officers is the responsibility of the
entire Board of Trustees acting upon the recommendation of the Compensation
Committee. The Compensation Committee is also responsible for administering
the policies that govern PREIT's stock option and equity incentive plans. The
Compensation Committee consists of three of PREIT's non-employee Trustees.

   The Board of Trustees believes that PREIT's investment goal is to invest in
assets that provide the opportunity for cash flow growth and capital
appreciation. Accordingly, the Board of Trustees believes that PREIT's overall
performance in any year should be based on PREIT's performance in all aspects
of PREIT's business during that year, including development, management,
acquisition and capital structure, as well as financial accomplishments. The
Compensation Committee further believes that, as a result of the nature of
PREIT's business, funds from operations is a better measurement of PREIT's
performance than its reported net income. This standard has been adopted by
the National Association of Real Estate Investment Trusts.

   The members of the Compensation Committee believe that PREIT's success is
largely due to the efforts of its employees and, in particular, the leadership
exercised by its officers. Therefore, the Compensation Committee believes it
is important to:

   o Adopt compensation programs that enhance PREIT's ability to attract and
     retain qualified officers while providing the financial motivation
     necessary for PREIT to achieve continued high levels of performance.

   o Provide equity-based incentives for executives to ensure that they are
     motivated over the long term to respond to PREIT's challenges and
     opportunities as owners rather than only employees.

   o Provide a mix of cash and stock-based compensation programs that are
     competitive with a select group of real estate investment trusts that the
     members of the Compensation Committee believe are comparable to PREIT.

   Each executive officer's salary, including that of the Chief Executive
Officer and the Chief Operating Officer, is based on his employment contract
and the competitive market for the executive officer's services, considering
the executive's specific responsibilities, experience and overall performance.
The Compensation Committee reviews each executive officer's salary and adjusts
the salary to account for inflation, any change in the executive's
responsibilities and any change in the competitive marketplace.

   The Compensation Committee, in its discretion, periodically awards
restricted stock, stock options or other stock-based compensation to executive
officers. These awards are based on the performance of the individual
executive, PREIT's financial results and the executive officer's
accomplishments in his area of responsibility. The Committee believes that
restricted stock awards and cash bonuses based on PREIT's financial
performance are important elements in PREIT's compensation structure because
these awards promote alignment of the interests of the employees with the
interests of the shareholders.


                                SUBMITTED BY THE EXECUTIVE
                                COMPENSATION AND HUMAN RESOURCES
                                COMMITTEE OF THE BOARD OF TRUSTEES


                                Leonard I. Korman, Chairman
                                Rosemarie B. Greco
                                Lee H. Javitch


                                       19


Performance Graph

   The graph below compares PREIT's cumulative shareholder return with the
cumulative total return of the S&P 500 and the index of all equity real estate
investment trusts (excluding health care real estate investment trusts) as
prepared by the National Association of Real Estate Investment Trusts. Equity
real estate investment trusts are defined as those which derive more than 75%
of their income from equity investments in real estate assets. The graph
assumes that the value of the investment in each of the three was $100 at
August 31, 1996 and that all dividends were reinvested.




                               [GRAPHIC OMITTED]




----------------------------------------------------------------------------------------------------------------------------------
                     August 1996    August 1997   December 1997   December 1998   December 1999    December 1999    December 1999
----------------------------------------------------------------------------------------------------------------------------------
                                                                                                    
PREIT                    100            136            131             113              94               137             182
----------------------------------------------------------------------------------------------------------------------------------
Equity REITs             100            131            145             120             114               145             165
----------------------------------------------------------------------------------------------------------------------------------
S&P 500                  100            152            153             189             229               219             193
----------------------------------------------------------------------------------------------------------------------------------









                                       20


Audit Committee Report

   PREIT's audit committee operates under a charter approved and adopted by its
Board of Trustees on May 10, 2000. A copy of the charter is attached as
Appendix A to the proxy statement for PREIT's 2001 annual meeting. In
accordance with the charter, PREIT's Board of Trustees has determined that all
of the members of the audit committee are independent and financially literate
and at least one member has accounting or related financial management
expertise.

   The following is the report of the audit committee with respect to PREIT's
audited financial statements for the fiscal year ended December 31, 2001,
which include the consolidated balance sheets of PREIT as of December 31, 2001
and 2000, the related consolidated statements of income, shareholders' equity
and cash flows for each of the three years in the period ended December 31,
2001, and the notes thereto. The information contained in this report is not
"soliciting material," nor is it "filed" with the SEC, nor shall the
information be incorporated by reference into any future filing under the
Securities Act of 1933 or the Securities Exchange Act of 1934, except to the
extent that PREIT specifically incorporates it by reference in a filing.

   The audit committee has reviewed and discussed PREIT's audited financial
statements with management. The audit committee has discussed with Arthur
Andersen LLP, PREIT's independent accountants, the matters required to be
discussed by SAS 61 (Communications with Audit Committees), which include,
among other items, matters related to the conduct of the audit of PREIT's
financial statements. The audit committee has also received written
disclosures and the letter from Arthur Andersen LLP required by Independence
Standards Board Standard No. 1, which relates to the accountants' independence
from PREIT and its related entities, and has discussed with Arthur Andersen
LLP their independence from PREIT.

   Based on the review and discussions referred to above, the committee
recommended to PREIT's Board that PREIT's audited financial statements be
included in PREIT's Annual Report on Form 10-K for the fiscal year ended
December 31, 2001.


                                SUBMITTED BY THE AUDIT COMMITTEE OF
                                THE BOARD OF TRUSTEES


                                Rosemarie B. Greco, Chairperson
                                Lee H. Javitch
                                Ira Lubert


                                       21


Additional Information Regarding Our Independent Public Accountants

   Audit Fees

   The aggregate fees charged to PREIT by Arthur Andersen LLP for its audit of
our 2001 financial statements and for its review of PREIT's financial
statements included in PREIT's quarterly reports on Form 10-Q for 2001 were
approximately $170,000.

   All Other Fees

   The aggregate fees charged to PREIT by Arthur Andersen LLP for all other
services for 2001 were approximately $340,250. Of this amount, approximately
$102,250 was for audit-related activities, including assurance services for
certain properties with stand-alone reporting requirements, assistance with
registration statements, comfort letters and consents. The remaining amount of
approximately $238,000 was for tax compliance and tax consulting services.

   The audit committee has considered the nature of the above-listed services
provided by Arthur Andersen LLP and determined that those services are
compatible with its provision of independent audit services. Arthur Andersen
LLP has been PREIT's principal independent public accounting firm for more
than 30 years. The audit committee currently is monitoring circumstances
affecting Arthur Andersen LLP and has not made a decision with respect to the
selection of the principal auditors for PREIT's fiscal year ending December
31, 2002. Representatives of Arthur Andersen LLP are expected to be present at
the Annual Meeting and available to respond to appropriate questions, and will
be given an opportunity to make a statement, if they so desire.

Principal Security Holders

   After examining its own records and those of the Securities and Exchange
Commission, PREIT does not know of any individual or entity that beneficially
owns more than 5% of PREIT's Shares.

Shareholders' Proposals

   Under Securities and Exchange Commission rules, certain shareholder
proposals may be included in PREIT's proxy statement. Any shareholder desiring
to have such a proposal included in PREIT's proxy statement for the Annual
Meeting to be held in 2003 must deliver a proposal in full compliance with
Rule 14a-8 under the Securities Exchange Act of 1934 to PREIT's executive
offices by December 7, 2002. Where a shareholder does not seek inclusion of a
proposal in the proxy material and submits a proposal outside of the process
described in Rule 14a-8 of the Securities Exchange Act of 1934, the proposal
must be received by February 20, 2003, or it will be deemed "untimely" for
purposes of Rule 14a-4(c) under the Exchange Act and, therefore, the proxies
will have the right to exercise discretionary authority with respect to such
proposal. PREIT has not received any such proposal to be submitted from the
floor at the upcoming meeting.


                                By Order of the Board of Trustees


                                Jeffrey A. Linn
                                Secretary

April 5, 2002


                                       22


                                                                      Exhibit A



                            PENNSYLVANIA REAL ESTATE
                                INVESTMENT TRUST
                       2002-2004 LONG-TERM INCENTIVE PLAN

                       (Effective as of January 1, 2002)


                               TABLE OF CONTENTS


 1. Purposes. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .      1

 2. Definitions . . . . . . . . . . . . . . . . . . . . . . . . . . . . .      1

 3. Awards. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .      2

 4. Vesting of Awards; Vesting and Dividend Rights on Restricted Shares .      3

 5. Termination of Employment for Good Reason, Death, Disability, or Not
    for Cause . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .      3

 6. Termination for Cause or Not for Good Reason. . . . . . . . . . . . .      4

 7. Change in Control . . . . . . . . . . . . . . . . . . . . . . . . . .      4

 8. Beneficiary Designation . . . . . . . . . . . . . . . . . . . . . . .      5

 9. Payment to Guardian . . . . . . . . . . . . . . . . . . . . . . . . .      5

10. Withholding; Payroll Taxes. . . . . . . . . . . . . . . . . . . . . .      5

11. Source of Funds and Shares. . . . . . . . . . . . . . . . . . . . . .      5

12. Administration. . . . . . . . . . . . . . . . . . . . . . . . . . . .      5

13. Nonalienation of Benefits . . . . . . . . . . . . . . . . . . . . . .      6

14. Shareholder Approval of FFO Goals . . . . . . . . . . . . . . . . . .      6

15. Amendment and Termination . . . . . . . . . . . . . . . . . . . . . .      6

16. No Contract of Employment . . . . . . . . . . . . . . . . . . . . . .      6

17. Applicable Law. . . . . . . . . . . . . . . . . . . . . . . . . . . .      6

18. Successors. . . . . . . . . . . . . . . . . . . . . . . . . . . . . .      7

19. Headings. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .      7

20. Number and Gender . . . . . . . . . . . . . . . . . . . . . . . . . .      7

APPENDIX A. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .    A-1

APPENDIX B. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .    B-1

APPENDIX C. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .    C-1

APPENDIX D. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .    D-1


                            PENNSYLVANIA REAL ESTATE
                                INVESTMENT TRUST
                       2002-2004 LONG-TERM INCENTIVE PLAN

                       (Effective as of January 1, 2002)


                                    PREAMBLE

      WHEREAS, the Pennsylvania Real Estate Investment Trust (the "Trust") and
PREIT Services, LLC (the "Company") desire to establish a long-term incentive
plan for the benefit of certain officers of the Trust and the Company;

      NOW, THEREFORE, effective as of January 1, 2002, the Pennsylvania Real
Estate Investment Trust 2002-2004 Long-Term Incentive Plan is hereby adopted
by the Trust and the Company under the following terms and conditions:

   1. Purposes. The purposes of the Plan are (i) to help motivate certain
officers of the Trust and the Company to reach and exceed challenging
corporate goals for the Trust of profitability and growth, and (ii) to help
focus the attention of the eligible officers on critical financial indicators
that measure the Trust's success.

   2. Definitions

     (a) "Award" means an award of Performance Units or Restricted Shares to a
Participant.

     (b) "Board" means the Board of Trustees of the Trust.

     (c) "Cause" means "Cause" as the term is defined in a Participant's
Employment Agreement.

     (d) "Change of Control" means "Change of Control" as the term is defined
in a Participant's Employment Agreement.

     (e) "Committee" means the Executive Compensation and Human Resources
Committee of the Board, to whom responsibility for administering the Plan is
delegated under Section 12.

     (f) "Company" means PREIT Services, LLC, a Delaware limited liability
company.

     (g) "Corporate Goals" means the annual financial goals, set forth in
Appendix A attached hereto for 2002 and established by the Committee for 2003
and 2004, in order for a Participant to vest (at least in part) in the portion
of his Award of Restricted Shares subject to such Corporate Goals. The
Committee shall establish the specific measures for such Corporate Goal(s)
before the beginning of the 2003 and 2004 Performance Periods. In creating
these measures, the Committee shall use one or more of the following business
criteria: per-Share FFO net operating income, return on assets, return on net
assets, return on equity, return on capital, market price appreciation of
Shares, economic value added, total shareholder return, net income, earnings
per Share, operating profit margin, net income margin, cash flow, and/or sales
growth. The business criteria may be expressed in absolute terms or relative
to the performance of other companies or an index. In addition, the Committee
shall receive recommendations on these criteria from a management committee
formed for the purpose of providing such recommendations.

     (h) "Disability" means "disability" as the term is defined in a
Participant's Employment Agreement.

     (i) "Effective Date" means January 1, 2002.

     (j) "Employer" means the Trust and the Company.

     (k) "Employment Agreement" means the agreement entered into by the
Participant and the Trust or the Company (as applicable) setting forth the
terms and conditions of the Participant's employment, as amended and then in
effect.

     (l) "Equity Incentive Plan" means the Pennsylvania Real Estate Investment
Trust 1999 Equity Incentive Plan.


                                       1


     (m) "Excess Revenues" means revenues from either lease terminations or
recoveries from bankrupt or insolvent tenants in excess of the stated rent on
the relevant real estate for a one-year period, provided that any portion of
such revenues in respect of real estate that, on or before December 31, 2004,
has been re-leased at a market rental or sold shall be excluded from Excess
Revenues.

     (n) "FFO" means "funds from operations" of the Trust as publicly reported
by the Trust with respect to the Performance Period or 2004, as the case may
be.

     (o) "FFO Goals" means the goals relating to FFO in 2004, set forth in
Appendix B attached hereto, which the Trust must meet in order for a
Participant to vest (at least in part) in his Performance Units. The FFO Goals
shall be subject, if applicable, to the following adjustments: (i) in the
event of either (A) any single sale or series of related sales by the Trust
and its subsidiaries during any fiscal year after December 31, 2001 of 10
percent or more of the real estate assets of the Trust and its subsidiaries or
(B) the issuance during any fiscal year after December 31, 2001 of shares of
beneficial interest of the Trust and partnership units in PREIT Associates,
L.P. which together represent more than 10 percent of the total number of such
shares of beneficial interest and such partnership units outstanding at the
beginning of the applicable fiscal year, the Committee, taking into account
the consideration received therefor and the use thereof, shall make such
adjustment with respect to the FFO Goals as, in the good faith judgment of the
Committee, shall be appropriate so that the events described above shall not
affect, either positively or negatively, the ability of the Trust to achieve
the FFO Goals; (ii) "funds from operations" in 2004 for purposes of
determining FFO under the Plan for 2004 shall be calculated without regard to
the accrual in 2004 of any payments for Performance Units that are determined
to be payable in 2005; and (iii) if "funds from operations" in 2004 includes
Excess Revenues, an amount equal to the Excess Revenues, reduced (but not
below zero) by revenues lost during 2004 due to tenant bankruptcies or
insolvencies occurring after December 31, 2001, shall be deducted from "funds
from operations" in determining FFO for purposes of the Plan for 2004.

     (p) "Good Reason" means "Good Reason" as the term is defined in a
Participant's Employment Agreement.

     (q) "Grant Date" means the date as of which the Participant's Restricted
Shares and Performance Units are granted to him pursuant to his Employment
Agreement.

     (r) "Participant" means (i) each of the individuals whose names are set
forth in Appendix C attached hereto as designated to receive an Award under
the Plan and (ii) any other individual who holds the office of Executive Vice
President or a higher office and to whom the Committee grants Performance
Units under the Plan.

     (s) "Performance Period" means the calendar year (2002, 2003, or 2004) for
which specific Corporate Goals are established by the Committee.

     (t) "Performance Unit" means an Award that grants a Participant the
potential for a payment in cash (or for a payment in a combination of cash and
up to 50 percent in Shares) if an FFO Goal is met, subject to the restrictions
set forth in Section 4(b). Each Performance Unit shall have a value of $1.00.

     (u) "Plan" means the Pennsylvania Real Estate Investment Trust 2002-2004
Long-Term Incentive Plan, effective as of January 1, 2002, and as it may be
amended from time to time.

     (v) "Restricted Shares" means an Award that grants a Participant Shares
subject to the restrictions set forth in Section 4(a).

     (w) "Share" means a share of beneficial interest in the Trust, par value
$1.00.

     (x) "Trust" means the Pennsylvania Real Estate Investment Trust, a
Pennsylvania business trust.

     (y) "Trustee" means a member of the Board.

   3. Awards

   (a) Restricted Shares. Each Participant shall be granted under the Equity
Incentive Plan the number of Restricted Shares set forth next to his name in
Appendix C attached hereto. Such Restricted Shares will be subject to the
terms of this Plan, as well as to the terms of the Equity Incentive Plan.


                                       2


   (b) Performance Units. A total of 4.95 million Performance Units are
authorized for insurance under the Plan. Each Participant listed in Appendix C
attached hereto shall be granted the number of Performance Units that equals
the value of the Performance Unit Award set forth next to his name in such
Appendix. Each other Participant (if any) designated by the Committee on or
before December 31, 2002, shall be granted a number of Performance Units
determined by the Committee, also on or before December 31, 2002, in its sole
discretion.

   4. Vesting of Awards; Vesting and Dividend Rights on Restricted Shares

   (a) Restricted Shares. One-half of a Participant's Restricted Shares shall
be subject to time vesting and one-half of the Restricted Shares shall be
subject to performance vesting.

      (1) Time Vesting. Each Participant shall vest in (i.e, have the right
   to sell, assign, transfer, pledge, or otherwise encumber or dispose of)
   one-third of his Restricted Shares that are subject to time vesting on
   and after the first February 15 after each of the Performance Periods.

      (2) Performance Vesting. Each Participant shall vest in (i.e, have
   the right to sell, assign, transfer, pledge, or otherwise encumber or
   dispose of) one-third of his Restricted Shares that are subject to
   performance vesting upon the Committee's written determination that the
   Trust has attained the highest Corporate Goal set forth in Appendix A
   attached hereto (for 2002) or hereafter set by the Committee (for 2003
   and 2004). If the Trust attains less than the lowest Corporate Goal for
   the Performance Period, one-third of the Participant's Restricted Shares
   subject to performance vesting shall be forfeited. If the Trust attains
   at least the lowest Corporate Goal but less than the highest Corporate
   Goal for a Performance Period, the Participant shall vest in the
   percentage of one-third of his Restricted Shares subject to performance
   vesting as set forth in Appendix A (for 2002) or decided by the Committee
   (for 2003 and 2004). Appendix A attached hereto states the various
   Corporate Goals and the resulting vesting for the 2002 Performance Period
   only. The Committee shall determine for the 2003 and 2004 Performance
   Periods the various Corporate Goals and the resulting vesting for each of
   those Performance Periods.

      (3) Voting and Dividend Rights. A Participant shall have voting
   rights on nonvested Restricted Shares (both those that are subject to
   time vesting and those that are subject to performance vesting) and
   receive as compensation (subject to the withholding of applicable taxes)
   an amount equal to the dividends that otherwise would have been payable
   to the Participant had the Participant been vested in such Restricted
   Shares on the date of their original issuance.

   (b) Performance Units. Each Participant shall have the right to receive a
cash (or cash and up to 50 percent in Shares, as determined by the Committee)
payment equal to the value of the Participant's Performance Units following
the Committee's written determination that the Trust has attained FFO of at
least $3.24/Share for 2004. Such payment shall be made within the 90-day
period after such determination. If the Trust attains FFO of less than $3.12/
Share for 2004, all of the Participant's Performance Units shall be forfeited.
If the Trust attains FFO of less than $3.24/Share for 2004 but at least $3.12/
Share, the Participant's payment shall equal the value of his Performance
Units times the applicable percentage set forth in Appendix B attached hereto.

   (c) Committee Determination. Within 90 days of the end of each Performance
Period, the Committee shall provide each Participant with a written
determination of whether the Trust has or has not attained any of the
Corporate Goals for such Performance Period and the calculations used to make
such determination. Within 90 days of the end of the 2004 Performance Period,
the Committee shall provide each Participant with a written determination of
whether the Trust did or did not attain any of the FFO Goals for 2004.

   5. Termination of Employment for Good Reason, Death, Disability, or Not for
Cause. If a Participant ceases to be an employee of the Trust or the Company
for Good Reason, death, or Disability, or if the Participant is terminated by
the Trust or the Company but not for Cause, as the case may be, the following
shall apply:

   (a) Restricted Shares

      (1) Time-Vested Shares. All Restricted Shares subject to time vesting
   that were not vested prior to the Participant's termination of employment
   shall immediately vest upon such termination.


                                       3


      (2) Performance-Based Shares. A portion of the Restricted Shares
   subject to performance vesting for the Performance Period in which the
   Participant's termination of employment occurs shall vest to the extent
   (as described in Section 4(a)(2)) the Trust achieves the Corporate Goals
   applicable to such Performance Period. Such portion shall equal the
   product of the number of such Restricted Shares subject to such
   Performance Period (i) multiplied by the applicable percentage determined
   pursuant to Section 4(a)(2) for such Performance Period and then (ii)
   multiplied by a fraction the numerator of which is the number of days in
   such Performance Period prior to the Participant's termination of
   employment and the denominator of which is the total number of days in
   such Performance Period. The Participant shall not vest in any Restricted
   Shares for any Performance Period following the Performance Period in
   which occurs his termination of employment. If the Participant was an
   employee of the Trust or the Company on the last day of the Performance
   Period preceding the Performance Period in which his termination of
   employment occurs but not on the date on which full or partial vesting
   (or forfeiture) occurs (i.e., the date on which the Committee determines
   that the Trust has (or has not) attained the Corporate Goals for the
   preceding Performance Period), he shall become vested in (or forfeit) the
   same number of Restricted Shares as he would have had his employment
   continued until such determination is made.

   (b) Performance Units. If the Participant's termination of employment
occurs prior to December 31, 2004, then the Participant's Performance Units
shall vest (if at all) and be paid to the extent they would have vested and
been paid under Section 4(b) if the Participant had remained an employee of
the Trust or the Company until the date on which the Committee determines that
the Trust has (or has not) attained any of the FFO Goals for 2004.

   6. Termination for Cause or Not for Good Reason. If a Participant
terminates his employment not for Good Reason or is terminated by the Trust or
the Company for Cause, all unvested Awards shall be immediately forfeited.

   7. Change in Control

   (a) Restricted Shares. Notwithstanding any other provision of this Plan,
all outstanding Restricted Shares previously awarded to a Participant (both
time-based and performance-based) shall become fully vested upon a Change in
Control if the Participant is an employee of the Trust or the Company on the
date of the Change in Control. If (i) the Participant terminated employment
before the date of the Change in Control for Good Reason, death, or
Disability, or was terminated before such date by the Trust or the Company but
not for Cause (and thus became vested in his time-based Restricted Shares
under Section 5(a)(1)), and (ii) the Change in Control occurs on or before the
end of the Performance Period in which the Participant's termination of
employment occurs, a portion of the Participant's Restricted Shares subject to
performance vesting for such Performance Period shall immediately vest upon
such Change in Control. Such portion shall equal the product of the number of
such Restricted Shares subject to such Performance Period multiplied by a
fraction the numerator of which is the number of days in such Performance
Period prior to the Participant's termination of employment and the
denominator of which is the number of days in such Performance Period ending
with the date of the Change in Control. The Participant shall not vest in any
Restricted Shares for any Performance Period following the Performance Period
in which occurs his termination of employment.

   (b) Performance Units. Notwithstanding any other provision of this Plan,
all Performance Units awarded to a Participant shall become fully vested upon
a Change in Control if the Participant is an employee of the Trust or the
Company on the date of the Change in Control and shall be paid to the
Participant within the 90-day period after the Change in Control. If (i) the
Participant terminated employment before the date of the Change in Control for
Good Reason, death, or Disability, or was terminated before such date by the
Trust or the Company but not for Cause, and (ii) the Change in Control occurs
on or before the end of 2004, a portion of the Participant's Performance Units
shall immediately vest upon such Change in Control and shall be paid to the
Participant within the 90-day period after the Change in Control. Such portion
shall equal the product of the number of such Performance Units multiplied by
a fraction the numerator of which is the number of days on and after the
Effective Date prior to the Participant's termination of employment and the
denominator of which is the number of days commencing on the Effective Date
and ending with the date of the Change in Control.


                                       4


   8. Beneficiary Designation

   (a) Each Participant shall designate the person or persons as his
beneficiary or beneficiaries to whom his Performance Units shall be paid in
the event of his death prior to the payment of the Performance Units to him.
Each beneficiary designation shall be substantially in the form set forth in
Appendix D attached hereto and shall be effective only when filed with the
Committee during the Participant's lifetime.

   (b) Any beneficiary designation may be changed by a Participant without the
consent of any previously designated beneficiary or any other person by the
filing of a new beneficiary designation with the Committee. The filing of a
new beneficiary designation shall cancel all beneficiary designations
previously filed.

   (c) If any Participant fails to designate a beneficiary in the manner
provided above, or if the beneficiary designated by a Participant predeceases
the Participant, the Committee shall direct such Participant's Performance
Units to be distributed as follows:

      (1) to the Participant's surviving spouse; or

      (2) if the Participant has no surviving spouse, then to the
   Participant's estate.

   9. Payment to Guardian. If an amount is payable under this Plan to a minor,
a person declared incompetent, or a person incapable of handling the
disposition of property, the Committee may direct the payment of the amount to
the guardian, legal representative, or person having the care and custody of
the minor, incompetent, or incapable person. The Committee may require proof
of incompetency, minority, incapacity, or guardianship as the Committee may
deem appropriate prior to the payment. The payment shall completely discharge
the Committee, the Trustees, the Trust, and the Company from all liability
with respect to the amount paid.

   10. Withholding; Payroll Taxes. The Employer shall withhold from payments
made under the Plan any taxes required to be withheld from a Participant's
compensation for Federal, state, or local income tax.

   11. Source of Funds and Shares. This Plan shall be unfunded, and the
payment of Performance Units hereunder shall be made from the general assets
of the Employer. Each Participant and beneficiary shall be a general and
unsecured creditor of the Employer to the extent of the value of his
Performance Units determined hereunder, and the Participant shall have no
right, title, or interest in any specific asset that the Employer may set
aside, earmark, or identify as for the payment of Performance Units under the
Plan. The Employer's obligation under the Plan shall be merely that of an
unfunded and unsecured promise to pay money in the future. If the Committee
determines to pay a portion of a Participant's Performance Units in Shares,
such Shares shall come from the Equity Incentive Plan or from treasury Shares,
as is determined by the Committee in its sole discretion. All Restricted
Shares shall come from the Equity Incentive Plan.

   12. Administration

   (a) In General. This Plan shall be administered by the Committee. The
Committee shall have the authority to:

      (1) determine the specific Corporate Goals and resulting vesting that
   are applicable for the 2003 and 2004 Performance Periods and inform each
   Participant accordingly;

      (2) designate, on or before December 31, 2002, any additional
   individual to become a Participant in the Plan and grant Performance
   Units to him, also on or before December 31, 2002, provided such
   individual holds the office of Executive Vice President or a higher
   office;

      (3) interpret any disputed provision of the Plan; and

      (4) determine all questions concerning Awards under the Plan.

Any remaining dispute with a Participant shall be settled by arbitration
pursuant to the arbitration provision in the Participant's Employment
Agreement.

   (b) Records and Reports. The Committee (or its designee) shall keep a
record of the Committee's actions and shall maintain all books of account,
records, and other data as necessary for the proper administration of the
Plan. Such records shall contain all relevant data pertaining to individual
Participants and their rights under the

                                       5


Plan. The Committee shall have the duty to carry into effect all rights or
benefits provided hereunder to the extent assets of the Employer are properly
available therefor. Any Participant shall have access to the books of account,
records and other data pertaining to the Plan generally and to such
Participant's own rights under the Plan upon written request and during normal
business hours; provided, however, that no Participant shall have the right to
view data pertaining to any other Participant in the Plan. Upon written
request, the Committee shall provide each Participant with an explanation of
the Corporate Goals and the calculations used to determine the extent to which
they have been attained.

   (c) Indemnification for Liability. Each Employer shall indemnify the
members of the Committee from and against any and all claims, losses, damages,
expenses, and liabilities arising from their responsibilities in connection
with the Plan, unless the same is determined to be due to their gross
negligence or willful misconduct.

   13. Nonalienation of Benefits. Except as hereinafter provided with respect
to marital disputes, none of the Awards or rights of a Participant or any
beneficiary of a Participant shall be subject to the claim of any creditor. In
particular, to the fullest extent permitted by law, all such Awards and rights
shall be free from attachment, garnishment, or any other legal or equitable
process available to any creditor of the Participant or his beneficiary.
Neither the Participant nor his beneficiary shall have the right to alienate,
anticipate, commute, pledge, encumber, or assign any of the payments which he
may expect to receive, contingently or otherwise, under this Plan, except the
right to designate a beneficiary to receive death benefits provided hereunder.
In cases of marital dispute, the Employer shall observe the terms of the Plan
unless and until ordered to do otherwise by a state or federal court. As a
condition of participation, a Participant agrees to hold the Employer harmless
from any harm that arises out of its obeying the final order of any state or
federal court, whether such order effects a judgment of such court or is
issued to enforce a judgment or order of another court.

   14. Shareholder Approval of FFO Goals. This Plan shall become effective as
of January 1, 2002; provided, however, that if the "material terms" (within
the meaning of Treas. Reg. 1 1.162-27(e)(4)(i) or any successor thereto) of
the FFO Goals are not approved by the shareholders of the Trust, in the manner
described in Section 15(b), at the 2002 annual meeting of such shareholders,
Performance Units granted hereunder shall be null and void and no additional
Performance Units shall be granted hereunder. If the shareholders should
decide not to approve the material terms of the FFO Goals, such decision shall
have no effect on the award or vesting of Restricted Shares under the Plan.

   15. Amendment and Termination

   (a) Amendment and Termination. The Chief Executive Officer of the Trust
(the "CEO") may approve and execute changes of a technical nature to the Plan
which do not materially affect the substance thereof and which, in the opinion
of the CEO, are necessary and desirable. In addition, the Trustees reserve the
right to amend the Plan, by written resolution, at any time and from time to
time in any fashion, and to terminate it at will except that the following
amendments shall require the approval of shareholders (given in the manner set
forth in subsection (b) below) --

      (1) a modification of the material terms of the FFO Goals, within the
   meaning of Treas. Reg. 1 1.162-27(e)(4)(vi) or any successor thereto; and

      (2) any amendment for which shareholder approval is required under the
   rules of the exchange or market on which the Shares are listed.

   (b) Manner of Shareholder Approval. The approval of shareholders must be
effected by a majority of the votes cast (including abstentions, to the extent
abstentions are counted as voting under applicable state law), in a separate
vote of the shareholders.

   (c) No Adverse Effect. No amendment or termination of the Plan shall
adversely affect any Award already granted under the Plan without the consent
of the affected Participant(s).

   16. No Contract of Employment. Nothing contained herein shall be construed
as conferring upon any person the right to be employed by the Employer or to
continue in the employ of the Employer.

   17. Applicable Law. This Plan shall be construed and interpreted according
to the laws of the Commonwealth of Pennsylvania (without reference to the
principles of conflict of laws).


                                       6


   18. Successors. This Plan shall bind and inure to the benefit of the Trust
and the Company and their successors and assigns. The term "successors" as
used herein shall include any corporate or other business entity which shall,
whether by merger, consolidation, purchase or otherwise, acquire all or
substantially all of the business and assets of the Trust or the Company, and
the successors of any such corporation or other business entity.

   19. Headings. The headings of the Sections of the Plan are for reference
only. In the event of a conflict between a heading and the content of a
Section, the content of the Section shall control.

   20. Number and Gender. Whenever any words used herein are in the singular
form or in the masculine form, they shall be construed as though they were
also used in the plural form or in the feminine or neuter form in all cases
where they would so apply.

      IN WITNESS WHEREOF, the Pennsylvania Real Estate Investment Trust and
PREIT Services, LLC have caused these presents to be duly executed this 22nd
day of March, 2002.


                                   PENNSYLVANIA REAL ESTATE
                                   INVESTMENT TRUST


                                   By: /s/ Jonathan B. Weller


                                   PREIT SERVICES, LLC


                                   By:  PREIT Associates, L.P., its sole member


                                       By: Pennsylvania Real Estate Investment
                                           Trust, the general partner of PREIT
                                           Associates, L.P.


                                   By: /s/ Jonathan B. Weller

                                       7


                                   APPENDIX A


                            PENNSYLVANIA REAL ESTATE
                                INVESTMENT TRUST
                       2002-2004 LONG-TERM INCENTIVE PLAN


       VESTING IN RESTRICTED SHARES FOR CORPORATE GOAL ACHIEVED IN 2002*



                                             Percentage of Performance-Based
          Corporate Goal Achieved             Restricted Share Award Vested
    ------------------------------------     -------------------------------
                                                        
    At least $2.78 FFO/Share
     but less than $2.79 FFO/Share                       33 1/3%

    At least $2.79 FFO/Share
     but less than $2.80 FFO/Share                           50%

    At least $2.80 FFO/Share
     but less $2.81 FFO/Share                                80%

    At least $2.81 FFO/Share
     but less than $2.82 FFO/Share                           90%

    Equal to or greater than $2.82 FFO/Share                100%



* If less than $2.78 FFO/Share is achieved for 2002, one-third of the
  Participant's performance-based Restricted Share Award shall be forfeited.
  The specific Corporate Goal achievements that will result in vesting for the
  2003 and 2004 Performance Periods shall be determined by the Committee in
  its discretion provided that the resulting vesting for the achievement of
  the lowest Corporate Goal shall not be less than 33 1/3%.


                                      A-1


                                   APPENDIX B


                            PENNSYLVANIA REAL ESTATE
                                INVESTMENT TRUST
                       2002-2004 LONG-TERM INCENTIVE PLAN


           VESTING IN PERFORMANCE UNITS FOR FFO GOAL ACHIEVED IN 2004


           FFO Goal Achieved*             Percentage of Performance Units Vested
    ----------------------------------    --------------------------------------
    At least $3.12 FFO/Share
     but less than $3.18 FFO/Share                        33 1/3%

    At least $3.18 FFO/Share
     but less than $3.24 FFO/Share                        66 2/3%

    Equal to or greater than $3.24 FFO/Share                 100%


* If less than $3.12 FFO/Share is achieved for 2004, all of the Participant's
  Performance Units shall be forfeited.


                                      B-1


                                   APPENDIX C


                            PENNSYLVANIA REAL ESTATE
                                INVESTMENT TRUST
                       2002-2004 LONG-TERM INCENTIVE PLAN


                            PARTICIPANTS AND AWARDS



                                                      Value of                                Value of
                                                     Restricted         Number of         Performance Unit
Name                  Title                         Share Award    Restricted Shares(1)         Award
----                  -----                         -----------    --------------------         -----
                                                                              
R. Rubin              CEO                             $600,000            25,952             $1,200,000

J. Weller             President/COO                   $450,000            19,464             $  900,000

G. Rubin              President/PSLLC & PRI           $330,000            14,273             $  700,000

J. Coradino           EVP/Retail                      $315,000            13,625             $  600,000

D. Grayson            EVP/Development                 $300,000            12,976             $  550,000

J. Linn               EVP/Acquisitions Secretary      $150,000             6,488             $  300,000



------------

(1) This number of Restricted Shares was calculated by dividing the value of
    the Participant's Restricted Share Award by the average closing price
    (rounded to two decimal places; so that the $23.115 average was rounded to
    $23.12) of a Share during the 20 trading days preceding February 15, 2002.
    The number of Restricted Shares so calculated was then rounded to the
    nearest whole Restricted Share; so that, for example, 14,273.356
    Restricted Shares were rounded to 14,273 Restricted Shares.


                                      C-1


                                   APPENDIX D


                            PENNSYLVANIA REAL ESTATE
                                INVESTMENT TRUST
                       2002-2004 LONG-TERM INCENTIVE PLAN


                          BENEFICIARY DESIGNATION FORM


   This Form is for your use under the Pennsylvania Real Estate Investment
Trust 2002-2004 Long-Term Incentive Plan (the "Plan") to name a beneficiary
for the Performance Units payable to you from the Plan. You should complete
the Form, sign it, have it signed by your Employer, and date it.

                                    * * * *

   I understand that in the event of my death before I receive Performance
Units payable to me under the Plan, the Performance Units will be paid in a
single sum to the beneficiary designated by me below or, if none or if my
designated beneficiary predeceases me, to my surviving spouse or, if none, to
my estate. I further understand that the last beneficiary designation filed by
me during my lifetime cancels all prior beneficiary designations previously
filed by me for the Plan.

   I hereby state that ________________ [insert name], residing at
________________________________ [insert address], whose Social Security
number is __________________, is designated as my beneficiary.




___________________________________   __________________________________________
Signature of Participant              Date



                                      ACCEPTED:

                                      __________________________________________
                                      [Insert Name of Employer]



                                      By: ______________________________________

                                      __________________________________________
                                      Date


                                      D-1



                    PENNSYLVANIA REAL ESTATE INVESTMENT TRUST

           This Proxy is Solicited on behalf of the Board of Trustees


         The undersigned, revoking all prior proxies, hereby appoints LEONARD I.
KORMAN, RONALD RUBIN and GEORGE F. RUBIN, and each and any of them, as proxies
of the undersigned, with full power of substitution, to vote and act with
respect to all Certificates of Beneficial Interest of Pennsylvania Real Estate
Investment Trust held of record by the undersigned at the close of business on
March 20, 2002 at the Annual Meeting of Holders of Certificates of Beneficial
Interest to be held on Thursday, May 9, 2002 and at any adjournment thereof.

          PLEASE MARK, SIGN, DATE AND RETURN THIS PROXY CARD PROMPTLY
               USING THE ENCLOSED ENVELOPE, NO POSTAGE REQUIRED.

                           (continued on reverse side)




   Please mark, sign, date and mail your proxy card back as soon as possible!

        Annual Meeting of Holders of Certificates of Beneficial Interest
                    PENNSYLVANIA REAL ESTATE INVESTMENT TRUST

                                   May 9, 2002

                 Please Detach and Mail in the Envelope Provided
-------------------------------------------------------------------------------

|  |  Please mark your votes as
|  |  in this sample
|  |

                                          WITHHOLD
                    FOR all               AUTHORITY
                    Nominees listed       to vote for all
                    except as marked      nominees listed

                                                              Nominees:
1. ELECTION OF         |   |               |   |              Lee H. Javitch
   TWO (2) CLASS       |   |               |   |              Jonathan B. Weller
   A TRUSTEES          |   |               |   |

(INSTRUCTION: To withhold authority to vote
for any individual nominee, strike a line through
the nominee's name at right.)

                                              FOR        AGAINST        ABSTAIN
2. APPROVAL OF CERTAIN TERMS OF THE          |  |         |  |           |  |
   2002-2004 LONG-TERM INCENTIVE PLAN        |  |         |  |           |  |
                                             |  |         |  |           |  |

3. IN THEIR  DISCRETION,  THE  PROXIES  ARE  AUTHORIZED  TO VOTE UPON SUCH OTHER
   BUSINESS AS MAY PROPERLY COME BEFORE THE MEETING.





THE CERTIFICATES OF BENEFICIAL INTEREST REPRESENTED BY THIS PROXY, DULY
EXECUTED, WILL BE VOTED AS INSTRUCTED ABOVE. IF INSTRUCTIONS ARE NOT GIVEN, THEY
WILL BE VOTED FOR THE ELECTION OF THE NOMINEES LISTED IN PROPOSAL NO. 1 ABOVE
AND FOR THE APPROVAL OF THE TERMS OF THE 2002-2004 LONG-TERM INCENTIVE PLAN.

You are urged to sign and return this proxy so that you may be sure that your
Certificates of Beneficial Interest will be voted.


                                     ----------------------------------------


                                     ----------------------------------------
                                     Signature(s)                    Date


Note: Please sign exactly as your name appears hereon. When certificate(s) are
held by joint tenants, both should sign. When signing as attorney, executor,
administrator, trustee or guardian, please give full title as such. If a
corporation, please sign in full corporate name by President or other authorized
officer. If a partnership, please sign in partnership name by authorized person.