Fitch Affirms & Removes PREIT From Rating Watch Negative.

Business Editors

NEW YORK--(BUSINESS WIRE)--Feb. 10, 2004

Fitch Ratings has affirmed the ratings of Pennsylvania Real Estate Investment Trust (PREIT) and removed them from Rating Watch Negative following the company's announcement on Feb. 9, 2004 that PREIT has obtained a positive ruling from the Internal Revenue Service (IRS) through a private letter ruling granting PREIT retroactive relief for the election of the taxable REIT subsidiary (TRS) from 2001 that was necessary for the company to maintain its real estate investment trust (REIT) status. This follows PREIT's determination on February 5, 2004 that it inadvertently failed to qualify a corporation in which it owns more than 10% of the stock as a TRS. PREIT immediately initiated the process of requesting discretionary retroactive relief from the IRS which led to yesterday's positive ruling.

According to management, PREIT has now met the IRS' requirements for filing the application to qualify this entity as a TRS effective immediately. Additionally, Fitch expects that this event will act as a catalyst for management to review the financial systems and controls of the company to avoid future lapses.

Fitch rates approximately $124 million of PREIT's preferred securities B+ and the rating outlook is stable. PREIT is a $2.6 billion (Fitch-estimated undepreciated book capitalization of PREIT as of Nov. 20, 2003) owner and manager of regional malls, community shopping centers and industrial properties located substantially in the Mid-Atlantic states. As of Nov. 20, 2003, the portfolio consisted of 58 properties in fourteen states, including 40 shopping malls, fourteen strip and power centers and four industrial properties.