SKT
Tanger INC
NYSE
10-K: Tanger Inc. Reports 2024 Annual Results, Highlights Strategic Acquisitions and Financial Maneuvering
Sentiment:
Annual Results
21 February 2025 4:25 PM
Tanger Inc.'s 2024 10-K filing reveals strategic acquisitions, financing transactions, and organizational changes aimed at long-term growth amidst evolving market conditions.
Capital raise
During 2024, we sold 3.4 million common shares under our at-the-market stock offering (ATM Offering) program at a weighted average price of $34.34 per share, generating gross proceeds of $115.9 million.
In addition, we issued 1.9 million forward shares for an estimated gross value of $69.7 million based on the initial forward sale price of $36.40 with respect to each forward sale agreement.
Shares can be settled at any time over the next 12-15 months, unless otherwise extended.
As of December 31, 2024, we have a remaining authorization of $34.5 million under the ATM Offering.
Summary
- Tanger Inc., a leading owner and operator of outlet and open-air centers, released its 10-K filing for the year ended December 31, 2024.
- The company's consolidated portfolio includes 31 outlet centers and 2 open-air lifestyle centers, totaling approximately 13.0 million square feet with 98% occupancy.
- In December 2024, Tanger acquired a 270,000-square-foot open-air lifestyle center in Little Rock, Arkansas, for $73.1 million.
- In February 2025, Tanger acquired a 640,000-square-foot open-air mixed-use center in Cleveland, Ohio, for $167.0 million.
- During 2024, Tanger sold 3.4 million common shares under its ATM Offering program, generating gross proceeds of $115.9 million.
- The company also issued 1.9 million forward shares for an estimated gross value of $69.7 million.
- In April 2024, the Operating Partnership amended its unsecured lines of credit, increasing borrowing capacity to $620 million and extending the maturity date to April 2028.
- Steven B. Tanger transitioned from Executive Chair to Non-Executive Chair of the Board on January 1, 2024.
- Sonia Syngal was elected as a director in September 2024, expanding the Board to ten positions.
Sentiment
Score: 7
Explanation: The document presents a mixed sentiment. While strategic acquisitions and financial maneuvers indicate positive growth potential, decreased net income and increased expenses raise concerns. The high occupancy rate and strong tenant base are positive indicators, but risks related to the retail environment and debt financing need to be considered.
Positives
- High occupancy rate of 98% indicates strong demand for Tanger's retail spaces.
- Strategic acquisitions in Little Rock and Cleveland diversify the portfolio and expand into growing markets.
- Successful ATM equity offerings provide capital for acquisitions and debt management.
- Extension of unsecured lines of credit ensures access to liquidity for future investments.
- Addition of Sonia Syngal to the Board brings valuable experience and expertise.
Negatives
- Net income decreased by $1.1 million in 2024 compared to 2023.
- Higher interest expense from new interest rate swaps negatively impacted profitability.
- Increased operating expenses and depreciation from new centers contributed to lower net income.
- Executive separation costs added to general and administrative expenses.
- Lower investment income in 2024 due to the use of cash for acquisitions and development.
Risks
- Conditions that adversely affect the general retail environment could materially and adversely affect the company.
- The company's earnings and profitability are dependent on rental income from real property.
- The company is substantially dependent on the results of operations of its retail tenants, and their bankruptcy, early termination, or closing could adversely affect the company.
- Significant inflation could negatively impact the company's business.
- Certain of the company's properties are subject to ownership interests held by third parties, whose interests may conflict with the company's.
- The company faces risks associated with climate change and severe weather.
- An uninsured loss or a loss that exceeds the company's insurance policies on its centers or the insurance policies of its tenants could subject the company to lost capital and revenue on those centers.
- The company's Canadian investments may subject it to different or greater risk from those associated with its domestic operations.
- The company is subject to the risks associated with debt financing.
- The company depends on distributions from the Operating Partnership to meet its financial obligations, including dividends.
- The company may not be able to obtain additional capital to further its business objectives.
- The Operating Partnership guarantees debt or otherwise provides support for a number of joint venture properties.
- Adverse changes in the company's credit ratings could negatively affect its financing ability.
- The company's interest rate hedging arrangements may not effectively limit its interest rate risk exposure.
- The price per share of the company's stock may fluctuate significantly.
- If the company fails to qualify as a REIT, its operations and distributions to shareholders would be adversely affected.
- The company may need to incur additional borrowings to meet the REIT minimum distribution requirement and to avoid excise tax.
- Complying with REIT requirements may cause the company to forego otherwise attractive opportunities or liquidate otherwise attractive investments.
- The tax imposed on REITs engaging in prohibited transactions may limit the company's ability to engage in transactions which would be treated as sales for U.S. federal income tax purposes.
- Complying with REIT requirements may limit the company's ability to hedge effectively and may cause it to incur tax liabilities.
- Dividends payable by REITs do not qualify for the reduced tax rates available for some dividends.
- The U.S. federal income tax treatment of the cash that the company might receive from cash settlement of the forward sale agreement is unclear and could jeopardize its ability to meet the REIT qualification requirements.
- Changes to the U.S. federal income tax laws, including the enactment of certain tax reform measures, could have an adverse impact on the company's business and financial results.
- Cyber-attacks or acts of cyber-terrorism could disrupt the company's or its third-party providers' business operations and information technology systems or result in the loss or exposure of confidential or sensitive customer, employee or Company information.
- An increased focus on metrics and reporting related to environmental, social and governance (ESG) factors, may impose additional costs and expose the company to new risks.
- The company's success depends, in part, on its ability to attract, retain and develop talented employees, and its failure to do so, including the loss of any one of its key personnel, could adversely impact its business.
- Use of artificial intelligence presents risks and challenges that could impact the company's business.
Future Outlook
The company intends to continue to qualify as a REIT and to distribute substantially all of its taxable income to its shareholders through the payment of regular quarterly dividends. The company also intends to retain the ability to raise additional capital, including public debt or equity, to pursue attractive investment opportunities that may arise and to otherwise act in a manner that it believes to be in the best interests of its shareholders and unitholders.
Industry Context
The announcement reflects a broader trend in the retail industry where companies are focusing on diversifying their portfolios with open-air and mixed-use centers to adapt to changing consumer preferences and economic conditions. Tanger's strategic acquisitions and financial maneuvers position it to compete effectively in the evolving retail landscape.
Comparison to Industry Standards
- Simon Property Group (SPG) and Macerich (MAC) are major players in the REIT sector, particularly in shopping malls.
- SPG has also been diversifying into outlet centers and mixed-use properties, similar to Tanger's strategy.
- Comparing Tanger's occupancy rates and rental yields to those of SPG's premium outlet portfolio would provide a relevant benchmark.
- RioCan Real Estate Investment Trust, Tanger's partner in Canada, is a major Canadian REIT with a focus on retail properties.
- Analyzing the performance of Tanger's Canadian joint ventures against RioCan's overall portfolio would offer insights into their success.
- Assessing Tanger's debt levels and credit ratings against those of its peers, such as SPG and MAC, provides a view of its financial health.
- Tanger's focus on maintaining a conservative leverage position aligns with industry best practices for REITs.
Stakeholder Impact
- Shareholders: Potential for long-term growth and dividend payments, but also risk of market fluctuations and economic downturns.
- Employees: Organizational changes and potential for career development within the company.
- Tenants: Access to well-managed and strategically located retail centers.
- Customers: Continued access to a diverse mix of retailers and shopping experiences.
- Creditors: Repayment of debt obligations and financial stability of the company.
Next Steps
- Continue to monitor and manage the performance of newly acquired centers.
- Focus on optimizing leasing strategies to maintain high occupancy rates and increase rental income.
- Manage capital expenditures and debt levels to maintain a strong financial position.
- Assess and mitigate risks related to the retail environment, climate change, and cybersecurity.
- Evaluate and adapt to changes in tax laws and regulations.
Key Dates
- 1993-03: Tanger Inc. was incorporated.
- 1993-05: Tanger Properties Limited Partnership was formed.
- 2023-11: Acquisition of Asheville Outlets and Bridge Street Town Centre.
- 2024-01-01: Steven B. Tanger transitioned to Non-Executive Chair.
- 2024-04: Amendment of unsecured lines of credit.
- 2024-09: Sonia Syngal elected as a director.
- 2024-12: Acquisition of The Promenade at Chenal.
- 2025-02: Acquisition of open-air mixed-use center in Cleveland, Ohio.
Keywords
SKT
Tanger INC
NYSE
Sector: Real Estate
Filings with Classifications
Capital raise
2 May 2025 9:08 AM
Quarterly Report
- The company has an at-the-market stock offering (ATM Offering) program, which commenced in February 2021, and replaced with a new program in February 2025, under which it may offer and sell its common shares, $0.01 par value per share, having an aggregate gross sales price of up to $400 million.
- As of March 31, 2025, we had approximately $400.0 million of common shares remaining available for sale under the ATM Offering program.
Worse than expected
2 May 2025 9:08 AM
Quarterly Report
- Net income decreased from $23.3 million to $20.0 million due to an impairment charge.
Better than expected
28 March 2025 8:46 AM
Proxy Statement
- The company's total shareholder return outperformed retail REITs, the REIT industry, and the broad market.
- Core FFO increased to $2.13 per share, or $247 million, in 2024.
- Same Center NOI grew to $333.4 million in 2024.
- Net Debt to Adjusted EBITDAre improved to 4.8x.
Capital raise
24 February 2025 4:05 PM
8-K Filing
- Tanger Inc. is establishing an at-the-market offering program to issue and sell up to $400 million of its common shares.
- The company may sell shares through sales agents, directly to them as principals, or through forward stock purchase transactions.
- The net proceeds will be used for general corporate purposes, including property development, debt repayment, and working capital.
Capital raise
21 February 2025 4:25 PM
Annual Results
- During 2024, we sold 3.4 million common shares under our at-the-market stock offering (ATM Offering) program at a weighted average price of $34.34 per share, generating gross proceeds of $115.9 million.
- In addition, we issued 1.9 million forward shares for an estimated gross value of $69.7 million based on the initial forward sale price of $36.40 with respect to each forward sale agreement.
- Shares can be settled at any time over the next 12-15 months, unless otherwise extended.
- As of December 31, 2024, we have a remaining authorization of $34.5 million under the ATM Offering.
Capital raise
19 February 2025 4:06 PM
Earnings Release
- During the fourth quarter of 2024, the Company sold 2.6 million common shares under its at-the-market stock offering program (the ATM Offering Program) at a weighted average price of $35.57 per share generating gross proceeds of $90.9 million.
- For the full year period, the Company sold 3.4 million common shares generating $115.9 million.
- Additionally, during the fourth quarter of 2024, the Company entered into forward sale agreements for 1.9 million shares at a weighted average price of $36.40 per share with total gross proceeds of approximately $69.7 million, all of which remain unsettled and can be drawn down over time.
- As of December 31, 2024, the Company had $34.5 million of common shares remaining available for sale under the ATM Offering Program.
Better than expected
19 February 2025 4:06 PM
Earnings Release
- The company's FFO and Core FFO per share increased compared to the prior year period, indicating improved operating performance.
- The company's occupancy rate increased to 98.0% compared to 97.3% in the prior year, demonstrating strong demand for its properties.
- The company's Same Center NOI increased by 3.0% for the fourth quarter and 5.1% for the full year, indicating improved profitability from its existing properties.
Capital raise
7 November 2024 4:14 PM
Quarterly Report
- The company issued 818,943 common shares under its at-the-market offering program, generating $25 million in gross proceeds.
- The company has approximately $195.1 million of common shares remaining available for sale under the ATM Offering program.
- In October 2024, the company issued an additional 484,741 common shares under its ATM program at an average price of $33.38 per share, totaling approximately $16.2 million of gross proceeds.
Worse than expected
7 November 2024 4:14 PM
Quarterly Report
- Net income decreased by approximately $3 million compared to the same quarter last year, indicating a worse performance than the prior year.
Delay expected
6 November 2024 4:08 PM
Quarterly Report
- Tanger Outlets Asheville was temporarily closed due to a lack of utilities following Hurricane Helene, causing a delay in operations.
Capital raise
6 November 2024 4:08 PM
Quarterly Report
- The company sold 0.8 million common shares under its at-the-market stock offering (the ATM Offering) at a weighted average price of $30.53 per share, generating gross proceeds of $25.0 million during the three and nine months ended September 30, 2024.
- In October 2024, the Company sold an additional 0.5 million common shares at a weighted average price of $33.38 per share, totaling approximately $16.2 million of gross proceeds.
- As of October 31, 2024, the Company had $179.0 million of common shares remaining available for sale under the ATM Offering.
Better than expected
6 November 2024 4:08 PM
Quarterly Report
- The company increased its full-year 2024 guidance for net income, FFO, and Core FFO per share, indicating better than expected performance.
- The company achieved its 11th consecutive quarter of positive leasing spreads, demonstrating better than expected rental growth.
- Net debt to Adjusted EBITDAre improved to 5.0x, indicating better than expected financial health.
Capital raise
5 August 2024 8:02 AM
Quarterly Report
- The company has an at-the-market stock offering program with approximately $220.1 million of common shares remaining available for sale.
- The company may issue equity from time to time on an opportunistic basis, dependent upon market conditions and available pricing.
Better than expected
1 August 2024 4:06 PM
Quarterly Report
- The company's results exceeded expectations due to strong leasing activity and positive rent spreads.
- The company's increased full-year guidance indicates management's confidence in continued strong performance.
- The company's same center NOI growth of 8.0% was better than expected.
Capital raise
1 May 2024 4:55 PM
Quarterly Report
- The company has an at-the-market stock offering program with approximately $220.1 million of common shares remaining available for sale.
- The company may issue equity from time to time on an opportunistic basis, dependent upon market conditions and available pricing.
Worse than expected
1 May 2024 4:55 PM
Quarterly Report
- Net income decreased by $1.6 million compared to the first quarter of 2023, indicating a worse performance than the previous year.
Better than expected
30 April 2024 4:07 PM
Quarterly Report
- The company raised its full-year 2024 guidance for net income, FFO, and Core FFO per share.
- The company achieved a 5.2% increase in same center net operating income (NOI).
- The company increased its dividend by 5.8% to $1.10 per share annually.
Better than expected
15 April 2024 9:21 AM
Credit Agreement Amendment
- The increase in borrowing capacity, extended maturity, and improved pricing grid are all better than the previous terms.
Better than expected
4 April 2024 8:46 AM
Proxy Statement
- The company's 2023 performance highlights include net income available to common shareholders of $0.92 per share, Core FFO of $1.96 per share, and 97.3% occupancy for the consolidated portfolio, all of which are better than the previous year.
Capital raise
21 February 2024 4:08 PM
Annual Report
- During 2023, the company sold 3.5 million common shares under its at-the-market stock offering (ATM Offering) program at a weighted average price of $25.75 per share, generating gross proceeds of $90.0 million.
- As of December 31, 2023, the company has a remaining authorization of $220.1 million under the ATM Offering.
- The company is a well-known seasoned issuer with a shelf registration statement on Form S-3 that allows it to register unspecified amounts of different classes of securities.
Capital raise
15 February 2024 4:07 PM
Quarterly Report
- During the fourth quarter of 2023, Tanger sold 3.4 million common shares under its ATM equity offering program at a weighted average price of $25.77 per share, generating gross proceeds of $87.3 million.
- During 2023, the Company sold 3.5 million shares at a weighted average price of $25.75 per share, generating gross proceeds of $90.0 million.
- As of December 31, 2023, the Company has a remaining authorization of $220.1 million under its ATM equity offering program.
Better than expected
15 February 2024 4:07 PM
Quarterly Report
- The company's net income, FFO, and Core FFO all increased year-over-year, indicating improved financial performance.
- Same center NOI growth of 5.4% for the quarter and 6.2% for the year exceeded expectations.
- The company achieved record leasing activity with over 2.3 million square feet of leases executed in 2023.
- Blended average rental rates increased by 13.3%, demonstrating strong demand for the company's properties.
Disclaimer: This summary was generated by artificial intelligence and its accuracy is not guaranteed. The information provided here is for general informational purposes only and does not constitute financial advice, recommendation, or endorsement of any kind. It may contain errors or omissions. You should not rely on this information to make financial decisions. Always seek the advice of a qualified financial professional before making any investment or financial decisions. Use of this information is at your own risk.