In a Current Report on Form 8-K filed on April 26, 2005, Pennsylvania Real Estate Investment Trust (“PREIT” or the “Company”) disclosed that it had signed commitment letters with each of The Prudential Insurance Company of America and The Northwestern Mutual Life Insurance Company (collectively, the “Lenders”) pursuant to which the Lenders, on a several basis, had offered to provide a $200 million first mortgage loan (the “Loan”) secured by Cherry Hill Mall in Cherry Hill, New Jersey, a property owned by a subsidiary of the Company (the subsidiary is the named borrower in the transaction). On September 30, 2005, the Company completed this mortgage loan transaction.

The Company used a portion of the proceeds of the Loan to repay the previous first mortgage on the property, which the Company had assumed upon its acquisition of Cherry Hill Mall in 2003. The previous mortgage had a balance of approximately $70.2 million at closing. The Company used the remaining net proceeds to repay a portion of the outstanding balance under its unsecured revolving credit facility. After the repayment on September 30, 2005, there was a total of $276.0 million outstanding under the credit facility, with interest rates on amounts outstanding ranging from 4.82% to 4.90% per annum.

The Loan has an interest rate of 5.422% per annum, which is 517.8 basis points lower than the interest rate on the previous loan. The Loan will be repaid based on a 30 year amortization schedule and will mature in October 2012. The Company has a right to convert the Loan to an unsecured corporate obligation during the first six years of the Loan term, subject to the requirement that the Company shall have received letters from two nationally recognized rating agencies stating that the Loan and other senior long term unsecured debt of the Company’s operating partnership shall have a rating of at least BBB from Standard & Poor’s or Fitch and/or Baa2 from Moody’s, and subject to financial and other covenants and conditions set forth in the Loan documentation. The borrower may prepay the Loan beginning twenty four months after the closing date, provided that it pays a specified prepayment premium. The Loan contains various customary events of default, including, among others, nonpayment of principal, interest, fees or other amounts; inaccuracy of representations; violation of covenants; and certain bankruptcy events. If an event of default occurs under the Loan, then, subject to the borrower’s customary cure rights, the Lenders may declare the entire outstanding balance of the Loan, including all accrued and unpaid interest, any prepayment premium and any late charges and other amounts, to be immediately due and payable.

In consideration of the Lenders fixing the interest rate on the Loan in April 2005, the Company had delivered to the Lenders an interest rate standby fee in the form of a $6.0 million letter of credit. Upon the closing of the Loan, this letter was returned to the Company.