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|                                                    |
|----------------------------------------------------|
|                                                    |  |  |
| Report of Independent Auditors                     | 1 |  |
|                                               |   |
| Audited Consolidated Financial Statements          |   |
|                                               |   |
| Consolidated Balance Sheets                        | 3 |  |
| Consolidated Statements of Operations              | 4 |  |
| Consolidated Statements of Partners’ Deficit | 5 |  |
| Consolidated Statements of Cash Flows              | 6 |  |
| Notes to Consolidated Financial Statements         | 7 |  |

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|                     |
|---------------------|
|                     |
| March 25, 2014 |

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|                                                                               |
|-------------------------------------------------------------------------------|
|                                                                               |  |  |
| Lehigh Valley Associates and Subsidiary                                       |
|                                                                          |   |   |
|  Consolidated Balance Sheets                                             |
|                                                                          |   |   |
|                                                                          |   |   |
|                                                                          |  December 31 |
|                                                                          | 2013 | 2012 |
| Assets                                                                        |   |   |
| Investment property, at cost                                                  |  $   84,879,741 |  $   83,843,264 |
| Less accumulated depreciation                                                 |       43,476,720 |       40,574,648 |
|                                                                          |       41,403,021 |       43,268,616 |
|                                                                          |   |   |
| Cash and cash equivalents                                                     |         8,156,661 |         4,634,620 |
| Tenant receivables, net of allowance for credit losses of                     |   |   |
| $45,533 and $29,034 for 2013 and 2012, respectively                           |            467,602 |            305,354 |
| Accrued straight-line rent                                                    |         2,631,317 |         2,285,279 |
| Deferred costs, net                                                           |         1,906,622 |         2,040,664 |
| Other assets                                                                  |         1,027,250 |            738,088 |
| Total assets                                                                  |  $   55,592,473 |  $   53,272,621 |
|                                                                          |   |   |
| Liabilities and partners’ deficit                                       |   |   |
| Mortgage note payable                                                         |  $ 133,542,159 |  $ 135,567,983 |
| Accounts payable and accrued expenses                                         |         7,593,644 |         6,764,828 |
| Capital expenditures payable                                                  |            576,725 |            482,476 |
| Total liabilities                                                             |     141,712,528 |     142,815,287 |
|                                                                          |   |   |
| Partners’ deficit                                                       |     (86,120,055) |     (89,542,666) |
| Total liabilities and partners’ deficit                                 |  $   55,592,473 |  $   53,272,621 |
|                                                                          |   |   |
| The accompanying notes are an integral part of these consolidated statements. |   |

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|                                                                               |
|-------------------------------------------------------------------------------|
|                                                                               |  |  |  |
| Lehigh Valley Associates and Subsidiary                                       |
|                                                                          |   |   |   |
|  Consolidated Statements of Operations                                   |
|                                                                          |   |   |   |
|                                                                          |   |   |   |
|                                                                          |  For the Years Ended |
|                                                                          | December 31 |
|                                                                          | 2013 | 2012 | 2011 |
| Revenue:                                                                      |   |   |   |
| Minimum rent                                                                  |  $   22,473,706 |  $   21,090,823 |  $  20,514,185 |
| Overage rent                                                                  |            164,666 |            276,880 |           151,255 |
| Tenant reimbursements                                                         |       12,355,469 |       11,505,009 |      10,723,503 |
| Other income                                                                  |            634,108 |            375,512 |           290,810 |
| Total revenue                                                                 |       35,627,949 |       33,248,224 |      31,679,753 |
|                                                                          |   |   |   |
| Expenses:                                                                     |   |   |   |
| Property operating                                                            |         4,252,131 |         4,273,884 |        4,029,884 |
| Depreciation and amortization                                                 |         3,335,096 |         3,436,335 |        3,736,826 |
| Real estate taxes                                                             |         2,745,862 |         2,175,691 |        2,100,412 |
| Repairs and maintenance                                                       |         1,165,201 |         1,277,892 |        1,293,020 |
| Advertising and promotion                                                     |            797,250 |            830,398 |           852,172 |
| Provision for credit losses                                                   |            521,801 |            252,972 |           278,160 |
| Other                                                                         |            334,442 |            374,260 |           301,482 |
| Total expenses                                                                |       13,151,783 |       12,621,432 |      12,591,956 |
|                                                                          |   |   |   |
| Operating income                                                              |       22,476,166 |       20,626,792 |      19,087,797 |
|                                                                          |   |   |   |
| Interest expense                                                              |         7,961,555 |         8,077,456 |        8,186,752 |
| Net income                                                                    |  $   14,514,611 |  $   12,549,336 |  $  10,901,045 |
|                                                                          |   |   |   |
| The accompanying notes are an integral part of these consolidated statements. |   |

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|                                                                               |
|-------------------------------------------------------------------------------|
|                                                                               |  |  |  |  |
| Lehigh Valley Associates and Subsidiary                                       |
|                                                                          |   |   |   |   |
|  Consolidated Statements of Partners’ Deficit                      |
|                                                                          |   |   |   |   |
| For the Years Ended December 31, 2013 and 2012                                |
|                                                                          |   |   |   |   |
|                                                                          |   |   |   |   |
|                                                                          | PREIT |   |   |   |
|                                                                          | Associates, L.P. |   |   |   |
|                                                                          | and Affiliate |   |   |   |
|                                                                          | (General Partner | Delta | Kravco Simon |   |
|                                                                          | and Limited | Ventures, Inc. | Investments, L.P. |   |
|                                                                          | Partner) | (General Partner) | (Limited Partner) | Total |
|                                                                          |   |   |   |   |
| Partners’ percentage equity interest                                    | 50.0% | 0.5% | 49.5% | 100% |
|                                                                          |   |   |   |   |
| Partners’ deficit at January 1, 2012                                    |  $        (43,395,996) |  $                (433,961) |  $          (42,962,045) |  $     (86,792,002) |
| Distributions                                                                 |              (7,650,000) |                      (76,500) |                (7,573,500) |         (15,300,000) |
| Net income                                                                    |                6,274,668 |                       62,747 |                 6,211,921 |           12,549,336 |
| Partners’ deficit at December 31, 2012                                  |            (44,771,328) |                    (447,714) |              (44,323,624) |         (89,542,666) |
| Distributions                                                                 |            (5,546,000) |                    (55,460) |             (5,490,540) |       (11,092,000) |
| Net income                                                                    |             7,257,306 |                      72,573 |               7,184,732 |        14,514,611 |
| Partners’ deficit at December 31, 2013                                  |  $     (43,060,022) |  $             (430,601) |  $       (42,629,432) |  $  (86,120,055) |
|                                                                          |   |   |   |   |
| The accompanying notes are an integral part of these consolidated statements. |   |   |

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|                                                                               |
|-------------------------------------------------------------------------------|
|                                                                               |  |  |  |  |
| Lehigh Valley Associates and Subsidiary                                       |
|                                                                          |   |   |   |
| Consolidated Statements of Cash Flows                                         |
|                                                                          |   |   |   |
|                                                                          |   |   |   |
|                                                                          |  For the Years Ended |
|                                                                          |  December 31 |
|                                                                          | 2013 | 2012 | 2011 |
| Cash flows from operating activities                                          |   |   |   |
| Net income                                                                    |  $  14,514,611 |  $    12,549,336 |  |  $    10,901,045 |
| Adjustments to reconcile net income to net                                    |   |   |   |
| cash provided by operating activities:                                        |   |   |   |
| Straight-line rent                                                            |         (346,038) |              (8,953) |  |            132,736 |
| Depreciation and amortization                                                 |        3,387,874 |          3,489,114 |  |          3,789,604 |
| Amortization of tenant inducements                                            |           127,017 |            126,654 |  |            126,289 |
| Provision for credit losses                                                   |           521,801 |            252,972 |  |            278,160 |
| Changes in assets and liabilities:                                            |   |   |   |
| Tenant receivables                                                            |         (684,049) |           (285,548) |  |            155,343 |
| Deferred costs and other assets                                               |         (550,464) |           (371,309) |  |           (173,703) |
| Accounts payable and accrued expenses                                         |           828,816 |            976,138 |  |           (186,319) |
| Net cash provided by operating activities                                     |      17,799,568 |        16,728,404 |  |        15,023,155 |
|                                                                          |   |   |   |
| Cash flows from investing activities                                          |   |   |   |
| Capital expenditures                                                          |      (1,253,952) |           (783,619) |  |           (695,783) |
| Change in capital expenditures payable                                        |             94,249 |            269,964 |  |             (53,531) |
| Net cash used in investing activities                                         |      (1,159,703) |           (513,655) |  |           (749,314) |
|                                                                          |   |   |   |
| Cash flows from financing activities                                          |   |   |   |
| Mortgage payments                                                             |      (2,025,824) |        (1,910,414) |  |        (1,801,580) |
| Distributions to partners                                                     |    (11,092,000) | (15,300,000 | ) |       (11,098,000) |
| Cash used in financing activities                                             |    (13,117,824) | (17,210,414 | ) |       (12,899,580) |
|                                                                          |   |   |   |
| Increase (decrease) in cash and cash equivalents                              |        3,522,041 |           (995,665) |  |          1,374,261 |
| Cash and cash equivalents, beginning of year                                  |        4,634,620 |          5,630,285 |  |          4,256,024 |
| Cash and cash equivalents, end of year                                        |  $    8,156,661 |  $      4,634,620 |  |  $      5,630,285 |
|                                                                          |   |   |   |
| The accompanying notes are an integral part of these consolidated statements. |   |

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----

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|                               |
|-------------------------------|
|                               |  |  |
|                          | 2013 | 2012 |
| Deferred financing costs      | $527,789 | $527,789 |
| Leasing costs and other       | 1,462,119 | 1,536,767 |
| Tenant inducements            | 1,526,841 | 1,526,841 |
|                          | 3,516,749 | 3,591,397 |
| Less accumulated amortization | 1,610,127 | 1,550,733 |
|                          | $1,906,622 | $2,040,664 |

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----

----

|                                        |
|----------------------------------------|
|                                        |  |  |
|                                   | 2013 | 2012 |
|                                   |   |   |
| Land                                   | $5,752,083 | $5,752,083 |
| Building and improvements              | 77,096,905 | 75,978,754 |
| Total land, building, and improvements | 82,848,988 | 81,730,837 |
|                                   |   |   |
| Furniture, fixtures, and equipment     | 2,030,753 | 2,112,427 |
| Investment property, at cost           | 84,879,741 | 83,843,264 |
|                                   |   |   |
| Less accumulated depreciation          | 43,476,720 | 40,574,648 |
| Investment property, at cost, net      | $41,403,021 | $43,268,616 |

|            |
|------------|
|            |  |
| 2014       | $2,148,206 |
| 2015       | 2,277,981 |
| 2016       | 2,415,595 |
| 2017       | 2,561,523 |
| 2018       | 2,716,267 |
| Thereafter | 121,422,587 |
|       | $133,542,159 |

----

|            |
|------------|
|            |  |
| 2014       | $18,681,381 |
| 2015       | 18,346,934 |
| 2016       | 17,323,106 |
| 2017       | 14,153,985 |
| 2018       | 9,716,500 |
| Thereafter | 25,902,573 |
|       | $104,124,479 |

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