AMENDMENT NO. 3 TO THE PENNSYLVANIA REAL ESTATE INVESTMENT TRUST 1990 STOCK OPTION PLAN FOR NON-EMPLOYEE TRUSTEES

Exhibit 10.4

AMENDMENT NO. 3

TO THE

PENNSYLVANIA REAL ESTATE INVESTMENT TRUST

1990 STOCK OPTION PLAN FOR NON-EMPLOYEE TRUSTEES

WHEREAS, Pennsylvania Real Estate Investment Trust (the “Trust”) sponsors the Pennsylvania Real Estate Investment Trust 1990 Stock Option Plan for Non-Employee Trustees(the “Plan”);

WHEREAS, the Plan has been amended on two occasions;

WHEREAS, Section 12 of the Plan provides that, subject to certain inapplicable limitations, the Board of Trustees of the Trust (the “Board”) may amend the Plan; and

WHEREAS, the Board desires to amend the Plan to prohibit (without shareholder approval) the repricing of options;

NOW, THEREFORE, effective as of January 1, 2008:

1. A new subsection (vii) is added to the end of Section 7 (“Terms, Conditions and Form of Options”) of the Plan to read as follows:

(vii) No Repricing . Repricing of Options shall not be permitted without the approval of the shareholders of the Trust. For this purpose, a “repricing” means any of the following (or any other action that has the same effect as any of the following): (i) changing the terms of an Option to lower its exercise price (