SKT
Tanger INC
NYSE
10-K: Tanger Inc. Reports Strong 2023 Results, Driven by Increased Occupancy and Strategic Acquisitions
Sentiment:
Annual Report
21 February 2024 4:08 PM
Tanger Inc., a leading owner and operator of outlet and open-air centers, announced strong financial results for 2023, marked by increased occupancy rates, new developments, and strategic acquisitions.
Capital raise
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.
Summary
- Tanger Inc. reported net income of $103.9 million for 2023, an increase of $18.1 million compared to 2022.
- The increase in net income was primarily driven by a rise in average portfolio occupancy from 95% to 97%, higher property management and leasing responsibilities, increased other revenues, and higher investment income.
- These gains were partially offset by lower termination fees, a gain on sale of assets in 2022, and higher general and administrative expenses in 2023.
- Rental revenues increased by $17.5 million in 2023, primarily due to growth in occupancy and rental rates.
- The company opened a new 291,000 square foot outlet center in Nashville, Tennessee in October 2023.
- Tanger acquired a 382,000 square foot open-air outlet center in Asheville, North Carolina, and an 825,000 square foot open-air lifestyle center in Huntsville, Alabama in November 2023.
- During 2023, Tanger sold 3.5 million common shares under its at-the-market stock offering program, generating gross proceeds of $90.0 million.
Sentiment
Score: 8
Explanation: The document reflects a positive outlook with strong financial results, successful acquisitions, and a clear growth strategy. However, the score is not higher due to the inherent risks in the retail sector and the broader economic environment.
Positives
- Tanger Inc. experienced a significant increase in net income, reaching $103.9 million in 2023.
- The company achieved a higher average portfolio occupancy rate of 97% in 2023.
- Rental revenues grew by $17.5 million, reflecting positive growth in occupancy and rental rates.
- Successful opening of a new outlet center in Nashville, Tennessee, added 291,000 square feet to the portfolio.
- Strategic acquisitions in Asheville, North Carolina, and Huntsville, Alabama, expanded the company's presence in key markets.
- The company effectively utilized its at-the-market stock offering program to generate $90.0 million in gross proceeds.
Negatives
- The company experienced lower termination fees in 2023 compared to 2022.
- General and administrative expenses were higher in 2023.
- The 2022 results included a $3.2 million gain on the sale of the Blowing Rock, North Carolina center, which was not replicated in 2023.
Risks
- The company faces risks associated with debt financing, including the ability to refinance existing indebtedness on favorable terms.
- Changes in consumer spending habits, retail bankruptcies, and competition from e-commerce could adversely affect rental income and occupancy rates.
- The company is exposed to interest rate risk on its variable rate debt, although it uses hedging strategies to mitigate this risk.
- Failure to qualify as a REIT could have adverse tax consequences and affect distributions to shareholders.
- Cybersecurity breaches could disrupt operations and result in the loss of sensitive data.
- Climate change and severe weather events could impact the company's properties, particularly those located in coastal areas.
Future Outlook
The company anticipates that adequate cash will be available to fund operating and administrative expenses, regular debt service obligations, and the payment of dividends in accordance with REIT requirements in both the short and long-term. The company expects to maintain sufficient liquidity to fund existing capital expenditures.
Industry Context
Tanger's performance aligns with broader trends in the retail real estate sector, where outlet and open-air centers have shown resilience. The company's focus on strategic acquisitions and development of new centers positions it to capitalize on the continued demand for value-oriented retail experiences.
Comparison to Industry Standards
- Tanger's occupancy rate of 97% as of December 31, 2023, is higher than the average occupancy rate for regional malls in the United States, which was 95.4% as of Q4 2023 according to Cushman & Wakefield.
- Tanger's focus on outlet centers differentiates it from traditional mall operators like Simon Property Group and Brookfield Properties, which have a more diversified portfolio of retail properties.
- Compared to other outlet center operators like Simon Premium Outlets, Tanger's portfolio is smaller but geographically diverse, with a presence in 18 states and partial ownership in 2 centers in Canada.
- Tanger's 2023 acquisition of Bridge Street Town Centre, an open-air lifestyle center, reflects a strategic move to diversify its portfolio beyond traditional outlet centers, similar to the strategy employed by some other retail REITs like Kimco Realty, which has been investing in mixed-use and open-air centers.
Stakeholder Impact
- Shareholders: The company's performance and growth strategy are aimed at increasing shareholder value through dividends and share price appreciation.
- Employees: The company focuses on attracting, developing, and retaining talent, providing various training programs and benefits.
- Customers: The company aims to provide a positive shopping experience through a curated mix of retailers and by adding non-traditional uses to its tenant mix.
- Tenants: The company works to maintain strong relationships with its tenants and offers support through re-sizing and re-location of retail space for maximum sales.
- Creditors: The company manages its capital structure to reflect a long-term investment approach and utilizes multiple sources of capital to meet its requirements.
Next Steps
- The company plans to continue its focus on increasing net operating income at existing centers, renovating and optimizing selected centers, and pursuing disciplined external growth.
- Tanger intends to retain the ability to raise additional capital, including public debt or equity, to pursue attractive investment opportunities.
- The company will continue to monitor the impact of supply chain and labor issues, inflationary pressures, changes in interest rates, and the overall macroeconomic environment on its business.
Legal Proceedings
- The Company and the Operating Partnership are, from time to time, engaged in a variety of legal proceedings arising in the normal course of business.
- Although the results of these legal proceedings cannot be predicted with certainty, management believes that the final outcome of such proceedings will not have a material adverse effect on our results of operations or financial condition.
Key Dates
- January 1, 2021: Stephen Yalof became Chief Executive Officer of the Company.
- February 2021: Commencement of at-the-market stock offering (ATM Offering) program.
- March 2021: Paid down $50.0 million of borrowings under unsecured term loan.
- June 2021: Paid down $50.0 million of borrowings under unsecured term loan.
- July 2021: Amended unsecured lines of credit and extended maturity date.
- August 2021: Completed a public offering of $400.0 million in senior notes due 2031.
- November 2021: The Company was admitted as the sole general partner of the Operating Partnership.
- December 2022: Sold a non-core center in Blowing Rock, North Carolina.
- May 2023: The Board authorized the repurchase of up to $100.0 million of the Company's outstanding shares.
- June 2023: The Galveston/Houston joint venture completed the refinance of its mortgage.
- July 2023: Bridget Ryan-Berman was appointed lead independent director.
- September 2023: Jessica K. Norman joined the Company as the Executive Vice President, General Counsel and Secretary.
- October 2022: Amended and restated unsecured term loan and amended debt agreements for unsecured lines of credit.
- October 2023: Opened a 291,000 square foot outlet center in Nashville, Tennessee.
- November 2023: Acquired a 382,000-square-foot, open-air outlet center in Asheville, North Carolina and Bridge Street Town Centre in Huntsville, Alabama.
- December 31, 2023: End of the fiscal year.
- January 1, 2024: Steven B. Tanger transitioned from his role as Executive Chair of the Board to Non-Executive Chair of the Board.
- January 17, 2024: The Board declared a quarterly dividend of $0.26 per share.
- February 1, 2024: $300.0 million of existing interest rate swaps expired.
- February 1, 2024: $325.0 million of forward starting interest rate swap agreements became effective.
- February 15, 2024: Quarterly dividend of $0.26 per share paid.
- May 31, 2025: Expiration of the share repurchase program.
- December 2026: Expiration of the shelf registration statement on Form S-3.
Keywords
outlet centers, open-air retail centers, REIT, real estate, retail, shopping centers, development, acquisition, leasing, occupancy, rental income, net operating income, capital strategy, debt financing, equity offering, Nashville, Asheville, Huntsville, Tanger Outlets
SKT
Tanger INC
NYSE
Sector: Real Estate
Filings with Classifications
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.
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.
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.
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
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.
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.
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.
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.
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
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.
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.
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.
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.
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.
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.
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