Pennsylvania Real Estate Investment Trust Reports Third Quarter 2007 Results

Pennsylvania Real Estate Investment Trust (NYSE: PEI) today reported results for the quarter and nine months ended September 30, 2007.

Financial Results

FFO for the third quarter of 2007 includes the $13.3 million impact of the Company’s July 2007 redemption of its Preferred Shares. FFO for the first nine months of 2007 also includes a $1.5 million gain from a parcel sale at The Plaza at Magnolia in Florence, South Carolina, and $0.8 million of condemnation proceeds at Capital City Mall in Harrisburg, Pennsylvania. FFO for the first nine months of 2006 was affected by $4.0 million of executive separation expenses associated with the retirement of Jonathan B. Weller, formerly a Vice Chairman of the Company.

In addition to the items listed above, net income available to common shareholders for the nine months ended September 30, 2007 was affected by a $6.7 million gain on the sale of Schuylkill Mall in Frackville, Pennsylvania, and a $0.6 million gain on the sale of an outparcel with an operating restaurant at New River Valley Mall in Christiansburg, Virginia. In the first nine months of 2006, net loss allocable to common shareholders was affected by the items stated above and $2.8 million of additional depreciation and amortization expense that was recorded in connection with the reclassification of Schuylkill Mall from held for sale to continuing operations.

A description of each non-GAAP financial measure and the related reconciliation to the comparable GAAP measure are located at the end of this press release.

Ronald Rubin, Chairman and Chief Executive Officer of the Company, said, “We have made significant progress on the projects in our development and redevelopment pipelines. Our three most ambitious redevelopment projects, Cherry Hill Mall, Plymouth Meeting Mall, and Voorhees Town Center, are underway with an expected combined investment of approximately $350 million. Our team will remain focused on these projects in the upcoming year.”

Retail Operating Metrics

The following tables set forth information regarding occupancy and sales per square foot in the Company’s retail portfolio as of September 30, 2007:

Same store NOI increased $0.4 million to $72.3 million for the third quarter of 2007, an increase of 0.5% from the third quarter of 2006. For the first nine months of 2007, same store NOI decreased $0.3 million to $218.3 million, or 0.1%, compared to the first nine months of 2006. Same store results represent retail properties that the Company owned for the full periods presented.

“We continue to enhance the shopping experience of our customers by improving the physical environment and upgrading the merchandise mix. Our enhanced properties are attracting premier merchants including Cheesecake Factory, Eastern Mountain Sports, Armani Exchange, Apple and P.F. Chang’s,” said Joseph Coradino, President of PREIT Services, LLC and PREIT-RUBIN, Inc. “As further evidence of our improvements, the same-store NOI of the eight redevelopments completed last year grew 8.3% for the third quarter and 9.8% for the nine months ended September 30, 2007.”

2007 Outlook

The Company is raising its 2007 full-year estimates for net income available to common shareholders per diluted share and FFO per diluted share to the following:

Conference Call Information

The Company has scheduled a conference call for 3:00 p.m. Eastern Time today to review its third quarter and nine months results, market trends, and future outlook. To listen to the call, please dial (877) 691-0878 (domestic) or (973) 935-8505 (international), at least five minutes before the scheduled start time. Investors can also access the call in a "listen only" mode via the Internet at the Company website, www.preit.com, or at www.viavid.net. Please allow extra time prior to the call to visit the site and download the necessary software to listen to the Internet broadcast. Financial and statistical information expected to be discussed on the call will also be available on the Company’s website.

For interested individuals unable to join the conference call, a replay of the call will be available through November 13, 2007 at (877) 519-4471 (domestic) or (973) 341-3080 (international), (Replay Pin Number: 9338399). The online archive of the webcast also will be available for 14 days following the call.

About Pennsylvania Real Estate Investment Trust

Pennsylvania Real Estate Investment Trust, founded in 1960 and one of the first equity REITs in the United States, has a primary investment focus on retail shopping malls and power centers. Currently, PREIT’s retail portfolio is approximately 34 million square feet and consists of 55 properties, including 38 shopping malls, 11 strip and power centers and six properties under development. PREIT’s properties are located in 13 states in the eastern half of the United States, primarily in the Mid-Atlantic region. PREIT is headquartered in Philadelphia, Pennsylvania, and its website can be found at www.preit.com. PREIT is publicly traded on the NYSE under the symbol PEI.

Definitions

The National Association of Real Estate Investment Trusts (“NAREIT”) defines Funds From Operations, which is a non-GAAP measure, as income before gains (losses) on sales of operating properties and extraordinary items (computed in accordance with GAAP); plus real estate depreciation; plus or minus adjustments for unconsolidated partnerships to reflect funds from operations on the same basis. We compute Funds From Operations by taking the amount determined pursuant to the NAREIT definition and subtracting dividends on preferred shares (“FFO”).FFO includes the effect of the Company’s redemption of all of its 11% non-convertible Senior Preferred Shares in July 2007.

Funds From Operations is a commonly used measure of operating performance and profitability in the REIT industry and we use FFO as a supplemental non-GAAP measure to compare our Company’s performance to that of our industry peers. In addition, we use FFO as a performance measure for determining bonus amounts earned under certain of our performance-based executive compensation programs. The Company computes FFO in accordance with standards established by NAREIT, less dividends on preferred shares, which may not be comparable to Funds From Operations reported by other REITs that do not define the term in accordance with the current NAREIT definition, or that interpret the current NAREIT definition differently than the Company. FFO does not include gains or losses on sale of operating real estate assets, which are included in the determination of net income in accordance with GAAP. Accordingly, FFO is not a comprehensive measure of our operating cash flows. In addition, since FFO does not include depreciation on real estate assets, FFO may not be a useful performance measure when comparing our operating performance to that of other non-real estate commercial enterprises. We compensate for these limitations by using FFO in conjunction with other GAAP financial performance measures, such as net income and net cash provided by operating activities, and other non-GAAP financial performance measures, such as net operating income. FFO does not represent cash generated from operating activities in accordance with GAAP and should not be considered to be an alternative to net income (determined in accordance with GAAP) as an indication of the Company's financial performance, or to be an alternative to cash flow from operating activities (determined in accordance with GAAP) as a measure of the Company's liquidity, nor is it indicative of funds available for the Company's cash needs, including its ability to make cash distributions.

The Company believes that net income is the most directly comparable GAAP measurement to FFO. The Company believes that FFO is helpful to management and investors as a measure of operating performance because it excludes various items included in net income that do not relate to or are not indicative of operating performance, such as various non-recurring items that are considered extraordinary under GAAP, gains on sales of operating real estate and depreciation and amortization of real estate.

Net operating income ("NOI"), which is a non-GAAP measure, is derived from revenues (determined in accordance with GAAP) minus property operating expenses (determined in accordance with GAAP). Net operating income is a non-GAAP measure. It does not represent cash generated from operating activities in accordance with GAAP and should not be considered to be an alternative to net income (determined in accordance with GAAP) as an indication of the Company's financial performance or to be an alternative to cash flow from operating activities (determined in accordance with GAAP) as a measure of the Company's liquidity; nor is it indicative of funds available for the Company's cash needs, including its ability to make cash distributions. The Company believes that net income is the most directly comparable GAAP measurement to net operating income.

The Company believes that net operating income is helpful to management and investors as a measure of operating performance because it is an indicator of the return on property investment, and provides a method of comparing property performance over time. Net operating income excludes general and administrative expenses, management company revenues, interest income, interest expense, depreciation and amortization and gains on sales of interests in real estate.

This press release contains certain “forward-looking statements” within the meaning of the U.S. Private Securities Litigation Reform Act of 1995, Section 27A of the Securities Act of 1933 and Section 21E of the Securities Exchange Act of 1934. Forward-looking statements relate to expectations, beliefs, projections, future plans, strategies, anticipated events, trends and other matters that are not historical facts. These forward-looking statements reflect PREIT’s current views about future events and are subject to risks, uncertainties and changes in circumstances that might cause future events, achievements or results to differ materially from those expressed or implied by the forward-looking statements. More specifically, PREIT’s business might be affected by uncertainties affecting real estate businesses generally as well as the following, among other factors: general economic, financial and political conditions, including changes in interest rates or the possibility of war or terrorist attacks; changes in local market conditions or other competitive or retail industry factors in the regions where our properties are concentrated; PREIT’s ability to maintain and increase property occupancy and rental rates, and risks relating to development or redevelopment activities, including construction, obtaining entitlements and managing multiple projects simultaneously. Additionally, there can be no assurance that PREIT’s actual results will not differ significantly from the estimates set forth above, or that PREIT’s returns on its developments, redevelopments or acquisitions will be consistent with the estimates outlined in press releases or other disclosures. Investors are also directed to consider the risks and uncertainties discussed in documents PREIT has filed with the Securities and Exchange Commission and, in particular, PREIT's Annual Report on Form 10-K for the year ended December 31, 2006. PREIT does not intend to update or revise any forward-looking statements to reflect new information, future events or otherwise.

[Financial Tables Follow]

** Quarterly supplemental financial and operating **

** information will be available on www.preit.com**

Contacts:

Pennsylvania Real Estate Investment Trust
Robert McCadden, 215-875-0735
EVP & CFO
or
Nurit Yaron
VP, Investor Relations, 215-875-0735