SKT
Tanger INC
NYSE
10-Q: Tanger Properties Reports Q1 2025 Results, Impacted by Howell Center Impairment
Sentiment:
Quarterly Report
2 May 2025 9:08 AM
Tanger Properties' Q1 2025 results reflect increased rental revenues offset by an impairment charge related to the sale of the Howell, Michigan outlet center.
Capital raise
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
Net income decreased from $23.3 million to $20.0 million due to an impairment charge.
Summary
- Tanger Properties Limited Partnership reported net income of $20.0 million for the three months ended March 31, 2025, compared to $23.3 million for the same period in 2024.
- Rental revenues increased to $129.3 million from $117.8 million year-over-year, driven by existing properties and recent acquisitions.
- The company recorded a $4.2 million impairment charge related to the Howell, Michigan outlet center, which was sold in April 2025 for $17.0 million.
- Property operating expenses increased to $41.8 million from $35.5 million, while general and administrative expenses decreased slightly to $19.0 million.
- The company acquired Pinecrest in Cleveland, Ohio, a 640,000-square-foot open-air, grocery-anchored, mixed-use center, for $167.0 million in February 2025.
- As of March 31, 2025, Tanger owned and operated 34 consolidated centers with 13.6 million square feet of gross leasable area, with occupancy at 96%.
Sentiment
Score: 6
Explanation: The report presents a mixed sentiment. While rental revenues and occupancy rates are positive, the decrease in net income due to the impairment charge and increased expenses temper the overall outlook. The company's strategic acquisitions and active portfolio management are encouraging, but macroeconomic risks remain a concern.
Positives
- Rental revenues increased due to higher rents from new and existing tenants and the acquisition of new centers.
- The acquisition of Pinecrest in Cleveland, Ohio expands Tanger's portfolio with a grocery-anchored, mixed-use center.
- Leasing activity shows a rent spread of 14.3% for comparable space, indicating strong leasing performance.
- The company maintains a high occupancy rate of 96% across its consolidated centers.
- The declaration of a higher dividend reflects confidence in the company's financial performance.
Negatives
- Net income decreased due to the impairment charge on the Howell, Michigan outlet center.
- Property operating expenses increased, impacting overall profitability.
- Interest expense increased due to higher balances on unsecured lines of credit and newly effective variable interest rate swaps.
Risks
- Macroeconomic conditions, including inflation and rising interest rates, could impact tenants and consumer spending.
- Trade negotiations and tariffs may create regulatory uncertainty and affect tenants' businesses.
- Failure to renew or re-lease a significant amount of space on favorable terms could negatively impact future performance.
- Increased focus on ESG metrics may impose additional costs and expose the company to new risks.
- The company's reliance on distributions from the Operating Partnership to meet financial obligations poses a risk if the Operating Partnership's financial performance declines.
Future Outlook
The company intends to continue growing its portfolio through development, expansion, or acquisition of additional outlet and retail real estate assets, while closely monitoring the impact of the macroeconomic environment.
Industry Context
The report reflects the ongoing challenges and opportunities in the retail real estate sector, with a focus on maintaining high occupancy rates and managing expenses in a dynamic economic environment. Tanger's strategy includes diversifying its portfolio with open-air lifestyle centers and managing interest rate risk through hedging strategies.
Comparison to Industry Standards
- Simon Property Group (SPG) and Macerich (MAC) are comparable REITs in the retail sector.
- SPG's occupancy rates typically range from 93-95%, while MAC's range from 90-92%.
- Tanger's 96% occupancy rate is competitive within the industry.
- SPG and MAC have also been diversifying their portfolios with mixed-use developments, similar to Tanger's acquisition of Pinecrest.
- The average rent spread for retail REITs is typically in the range of 10-15%, and Tanger's 14.3% rent spread is within this range.
Stakeholder Impact
- Shareholders will receive a higher dividend of $0.2925 per share.
- Tenants may be affected by macroeconomic conditions and trade policies.
- Employees may be impacted by the company's strategic decisions and cost management efforts.
- Creditors are exposed to the company's debt obligations and compliance with debt covenants.
Next Steps
- Continue to monitor macroeconomic conditions and their impact on tenants and consumer spending.
- Focus on renewing and re-leasing space on favorable economic terms.
- Manage interest rate risk through hedging strategies.
- Evaluate potential development, expansion, and acquisition opportunities.
Key Dates
- November 16, 2023: Tanger Factory Outlet Centers, Inc. changed its legal name to Tanger Inc.
- December 31, 2024: Date of balance sheet data derived from the company's audited financial statements.
- February 2025: Entered into an agreement to sell the Howell, Michigan outlet center for $17.0 million.
- February 2025: Purchased Pinecrest in Cleveland, Ohio, a 640,000-square-foot open-air, grocery-anchored, mixed-use center, for $167.0 million.
- February 1, 2026: Forward starting interest rate swap agreements totaling $75.0 million become effective.
- April 2025: The transaction to sell the Howell, Michigan outlet center closed.
- April 2025: The Board declared a $0.2925 quarterly cash dividend per common share payable on May 15, 2025.
- April 2025: The Southaven, Mississippi consolidated joint venture refinanced its mortgage increasing the outstanding borrowings from $51.7 million to $61.7 million and extending the maturity date from October 2026 to April 2030.
- April 2025: Entered into forward starting interest rate swap agreements totaling $75.0 million that become effective on February 1, 2026 and expire on April 1, 2028.
- May 2, 2025: Date of certifications by Principal Executive Officer and Principal Financial Officer.
- May 15, 2025: Payment date for the declared $0.2925 cash dividend per common share.
Keywords
Tanger Properties, REIT, outlet centers, rental revenue, occupancy, acquisitions, impairment charge, dividends, leasing activity, financial results
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.
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
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.
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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