Item 2.03     Creation of a Direct Financial Obligation or an Obligation under an Off Balance Sheet Arrangement of a Registrant.

     On March 24, 2006, a subsidiary of Pennsylvania Real Estate Investment Trust (the “Company”) entered into a $156.5 million mortgage loan with Prudential Mortgage Capital Company, LLC, which is secured by Woodland Mall in Grand Rapids, Michigan. The mortgage loan bears interest at a rate of 5.58% and has a 10 year term. The loan terms provide for interest-only payments for three years and then repayment of principal based on a 30 year amortization schedule.

     As disclosed in a Current Report on Form 8-K filed on January 5, 2006, on December 29, 2005, in order to finance the acquisition of Woodland Mall, the Company issued a 90-day $85.4 million seller note which bore interest at a rate of 7.0% per annum and which was secured by an approximately $86.9 million letter of credit issued by Wells Fargo Bank, and a 90-day $9.0 million seller note which bore interest at a rate of 5.4% per annum and which was secured by an approximately $9.1 million letter of credit issued by Wells Fargo Bank. On March 29, 2006, the Company repaid both of these notes using $94.4 million of the proceeds of the new mortgage loan and terminated the associated letters of credit. The Company used a portion of the remainder of the proceeds of this mortgage loan to repay a portion of the outstanding balance under its unsecured revolving credit facility and plans to use a portion for working capital. After this repayment, there was a total of $238.0 million outstanding under the Company’s credit facility, with interest rates on the amount outstanding in the range of 5.70% to 5.78% per annum, subject to adjustment as provided under the terms of the credit facility.

     Under the new mortgage loan, the borrower may not prepay the loan until three years after the loan closing, after which it may prepay the loan with a premium based on a yield maintenance formula. 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 lender may declare the entire outstanding balance of the loan, including all accrued and unpaid interest, any prepayment premium and late charges and other amounts, to be immediately due and payable.

Item 9.01     Financial Statements and Exhibits.

(d)      Exhibits

     10.1      Promissory Note, dated March 24, 2006, in the principal amount of $156.5 million, issued by PR Woodland Limited Partnership in favor of Prudential Mortgage Capital Company, LLC.

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