Exton Square Mall’s parent company, the Pennsylvania Real Estate Investment Trust, is standing its ground following the request by one of its shareholders, Land and Buildings, that it divest itself of the 17 least-valued malls in its portfolio – including Chester County’s beloved Exton Square Mall.

Joseph DiStefano of Philly.com is reporting Land and Buildings wants PREIT to keep its malls in Cherry Hill, Willow Grove, Springfield, the Gallery at Market East, and 12 other high-performing locations — while “liquidating” those at Moorestown, Plymouth Meeting, Exton, Voorhees and 13 other places with high vacancies/low rents:  www.philly.com/philly/blogs/inq-phillydeals/Investor-tells-PREIT-Liquidate-lower-quality-malls.html

The full text of the letter to PREIT from investment firm Land and Buildings is here:  http://www.landandbuildings.com/  The suggested actions are aimed at potentially driving the share price to net asset value of $30 per share, 55 percent above the current share.

PREIT made the uncharacteristic move of issuing a press release about its discussions with the shareholder, who is recommending PREIT sell a pool of assets into a liquidating trust.

PREIT, which says its portfolio quality is misunderstood, says this strategy would not achieve optimal execution price or be value enhancing and would not be in the best interest of all shareholders.  In fact, PREIT says a disposition program would potentially destroy shareholder value.

However, Jonathan Litt, Land and Buildings founder and CEO, went so far as to say despite PREIT’s recent efforts to shave its portfolio in favor of its highest-quality properties, it is viewed as a “low-quality mall company.”

Litt, who is considered an activist investor, called PREIT’s defensive response “a friendly kiss-off letter.” http://blogs.wsj.com/developments/2014/10/21/jonathan-litt-explains-his-activist-campaign-against-pennsylvania-reit/

PREIT says its recent sales and actions have significantly improved PREIT’s valuation and led to multiple expansion, improved the company’s trading relative to NAV and resulted in three-year total shareholder returns that are significantly greater than those delivered by the MSCI US REIT Index or the S&P 500 Index.