What changed in this filing

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Item 2. Properties

2022-02-22 compared with 2021-02-23 · 63 added, 54 removed, 208 unchanged (36% of the section changed)

As of December 31, 2021, our consolidated portfolio consisted of 30 outlet centers totaling 11.5 million square feet located in 18 states.

We own interests in seven other outlet centers totaling approximately 2.2 million square feet through unconsolidated joint ventures, including three outlet centers in Canada.

We own interests in six other outlet centers totaling approximately 2.1 million square feet through unconsolidated joint ventures, including two outlet centers in Canada.

Our consolidated outlet centers range in size from 104,009 to 739,148 square feet.

30 unchanged sentences

Michigan 2 671,565 6

Delaware 1 557,392 5

Alabama 1 554,649 5

Delaware 1 549,890 5

New Jersey 1 487,718 4

1 unchanged sentence

North Carolina 2 422,895 3

Ohio 1 411,915 3

Arizona 1 410,753 3

13 unchanged sentences

100 729,281 95

Foley, Alabama 100 554,649 92

Rehoboth Beach, Delaware (1)

100 549,890 94

Foley, Alabama 100 554,649 89

Atlantic City, New Jersey (1) (3)

5 unchanged sentences

Myrtle Beach Hwy 501, South Carolina 100 426,523 98

Jeffersonville, Ohio 100 411,915 78

Glendale, Arizona (Westgate) 100 410,753 100

40 unchanged sentences

Cookstown, Ontario 50 307,883 93

Saint-Sauveur, Quebec (1)

Total 2,112,896 97

1 unchanged sentence

See Note 5 to the consolidated financial statements for further details of our joint ventures' debt obligations.

Base Rents and Occupancy Rates

The following table sets forth our year end occupancy and average annual base rent per square foot during each of the last five calendar years for our consolidated outlet centers:

2021 2020 (2)

2019 2018 2017

Occupancy 95 % 92 % 97 % 97 % 97 %

Average annual base rent per square foot $ 23.79 $ 21.10 $ 25.35 $ 25.51 $ 25.81

(1) Average annual base rent per square foot is calculated based on base rental revenues recognized during the year on a straight-line basis including non-cash adjustments to base rent required by United States Generally Accepted Accounting Principles ("GAAP") and the effects of inducements and rent concessions divided by the weighted average square feet of the consolidated portfolio.

(2) The decline in the average annual base rent per square foot in 2020 compared to previous years reflects the decline in occupancy from 97% in 2019 to 92% in 2020 and rent modifications primarily due to a number of tenants filing bankruptcy during 2020.

Lease Expirations

18 unchanged sentences

1,758 8,936 $ 27.66 $ 247,197 100

(1) Excludes leases that have been entered into but which tenant has not yet taken possession, vacant suites, space under construction, temporary leases and month-to-month leases totaling in the aggregate approximately 2.2 million square feet.

(2) Annualized base rent is defined as the minimum monthly payments due as of December 31, 2020 annualized, excluding periodic contractual fixed increases and rents calculated based on a percentage of tenants' sales.

The annualized base rent disclosed in the table above includes all concessions, abatements and reimbursements of rent to tenants.

(1) Excludes leases that have been entered into but which tenant has not yet taken possession, temporary leases and month-to-month leases totaling in the aggregate approximately 2.4 million square feet of our consolidated outlet centers.

(2) Annualized base rent is defined as the minimum monthly payments due as of the end of the reporting period annualized, excluding periodic contractual fixed increases.

Includes rents which are based on a percentage of sales in lieu of fixed contractual rents.

Changes in rental income associated with individual signed leases on comparable spaces may be positive or negative, and we can provide no assurance that the rents on new leases or renewals of existing leases will increase from current levels, if at all.

Base Rents and Occupancy Rates

The following table sets forth our year end occupancy and average annual base rent per square foot during each of the last five calendar years for our consolidated properties:

2020 2019 2018 2017 2016

Occupancy 92 % 97 % 97 % 97 % 98 %

Average annual base rent per square foot (1)

$ 21.10 $ 25.35 $ 25.51 $ 25.81 $ 26.10

The decline in the average annual base rent per square foot in 2020 compared to previous years reflects the decline in occupancy from 97% in 2019 to 92% in 2020 and rent modifications primarily due to a number of tenants filing bankruptcy during 2020.

Expiring leases

The following table sets forth information regarding the expiring leases for our consolidated outlet centers during each of the last five calendar years:

11 unchanged sentences

(2) Represents the percentage of total square footage at the beginning of each year that is scheduled to expire during the respective year.

The following table sets forth the weighted average rental rate increases (decreases) per square foot on a straight-line basis (includes periodic, contractual fixed rent increases) for our consolidated outlet centers upon re-leasing stores that were turned over or renewed during each of the last five calendar years:

Leasing activity

In 2021, we revised our rent spread presentation from a commenced basis to executed basis and we are presenting it for comparable space.

Comparable space excludes leases for space that was vacant for more than 12 months (non-comparable space).

We believe that this presentation provides additional information and improves comparability to other retail REITs.

Prior period results have been revised to conform with the current period presentation.

The following table sets forth leasing activity for each of the calendar years for comparable space for executed leases for consolidated outlet centers.

Renewals of Existing Leases Stores Re-leased to New Tenants

Average Annualized Rent (2)

Initial Rent (2)

ft.) ($ per sq.

(in 000's) Expiring New %

Increase (Decrease) Square Feet

(in 000's) Expiring New %

Increase (Decrease)

Year Square Feet

(in 000's) New

2021 978 $ 31.08 — 192 $ 29.27 (4)

3 unchanged sentences

2017 1,570 $ 29.21 (1) 210 $ 36.91 —

(1) The square footage re-leased to new tenants for 2020, 2019, 2018, 2017, and 2016, contains 46,000, 109,000, 144,000, 107,000, and 93,000 square feet respectively, that was re-leased to new tenants upon expiration of an existing lease during the respective year.

(2) Represents base rent and CAM, excluding license agreements, seasonal tenants, and month-to-month leases.

(3) Excludes data for properties sold in each respective year.

(1) For consolidated properties owned as of the period-end date.

Represents leases for new stores or renewals that were executed during the respective calendar year and excludes license agreements, seasonal tenants and month-to-month leases.

(2) Represents average initial cash rent (base rent and common area maintenance (“CAM”)).

(3) Represents change in initial and expiring cash rent (base rent and CAM).

See above for a description of the change in calculation from prior periods.

Occupancy Costs

5 unchanged sentences

Given the fewer than twelve months of sales reported by our tenants for 2020, an average tenant occupancy cost is not provided for this period.

As of December 31, 2021, our occupancy cost was reduced to 8.1%.

The decrease in occupancy costs compared to the previous 5 years is primarily due to the strong rebound in sales in the 2021 period, but has also been impacted favorably by the significant amount of stores permanently closing in our portfolio during 2019 and 2020, as a result of bankruptcies and brand-wide restructurings, which generally had occupancy costs higher than the portfolio average.

The following table sets forth certain information for our consolidated outlet centers with respect to our 25 largest tenants based on total annualized base rent as of December 31, 2021 (1) :

3 unchanged sentences

The Gap, Inc.

Gap, Banana Republic, Janie & Jack, Old Navy 94 926,819 7.8 % 6.6 %

Gap, Banana Republic, Old Navy 83 881,942 7.7 % 6.1 %

Premium Apparel, LLC;

The Talbots, Inc.

LOFT, Ann Taylor, Lane Bryant, Talbots 77 426,970 3.7 % 4.2 %

SPARC Group Aéropostale, Brooks Brothers, Eddie Bauer, Forever 21, Lucky Brands, Nautica 75 461,640 4.0 % 4.2 %

Tommy Hilfiger, Van Heusen, Calvin Klein 40 298,803 2.6 % 3.6 %

Ascena Retail Group, Inc.

LOFT, Ann Taylor, Lane Bryant, Justice 59 359,893 3.0 % 3.6 %

Tapestry, Inc.

Coach, Kate Spade, Stuart Weitzman 47 223,813 2.0 % 3.4 %

Under Armour, Inc.

Under Armour, Under Armour Kids 29 228,931 2.0 % 3.2 %

SPARC Group Aéropostale, Brooks Brothers, Forever 21, Lucky Brands, Nautica 61 361,884 3.0 % 3.1 %

American Eagle Outfitters, Inc.

1 unchanged sentence

Nike, Converse, Hurley 31 370,448 3.2 % 2.7 %

Tapestry, Inc.

Coach, Kate Spade, Stuart Weitzman 47 224,149 1.9 % 2.7 %

Columbia Sportswear Company Columbia Sportswear 23 183,484 1.6 % 2.5 %

Adidas AG Adidas, Reebok 32 206,425 1.8 % 2.3 %

Capri Holdings Limited Michael Kors, Michael Kors Men’s 27 137,486 1.2 % 2.3 %

Carter’s, Inc.

Carters, OshKosh B Gosh 40 177,045 1.5 % 2.3 %

Adidas AG Adidas, Reebok 31 198,425 1.7 % 2.2 %

Hanesbrands Inc.

Hanesbrands, Maidenform, Champion 34 169,877 1.5 % 2.1 %

Capri Holdings Limited Michael Kors, Michael Kors Men’s 28 138,454 1.2 % 2.1 %

Signet Jewelers Limited Kay Jewelers, Zales, Jared Vault 48 108,923 0.9 % 2.1 %

Columbia Sportswear Company Columbia Sportswear 19 147,361 1.2 % 2.0 %

Ralph Lauren Corporation Polo Ralph Lauren, Polo Children, Polo Ralph Lauren Big & Tall 32 350,331 3.1 % 2.1 %

Rack Room Shoes, Inc.

Rack Room Shoes 26 193,632 1.7 % 2.0 %

Skechers USA, Inc.

Skechers 28 154,913 1.4 % 2.0 %

Signet Jewelers Limited Kay Jewelers, Zales, Jared Vault 45 103,260 0.9 % 2.0 %

Corporation The North Face, Vans, Timberland, Dickies, Work Authority 27 143,207 1.2 % 1.9 %

Express Factory 24 168,000 1.5 % 1.8 %

Chico’s, FAS Inc.

Chicos, White House/Black Market, Soma Intimates 37 107,287 0.9 % 1.8 %

Corporation The North Face, Vans, Timberland, Dickies 27 143,207 1.2 % 1.9 %

Express Factory 24 168,000 1.4 % 1.8 %

Famous Footwear, Naturalizer, Allen Edmonds 31 160,018 1.4 % 1.7 %

Levi Strauss & Co.

Levi's 28 116,486 1.0 % 1.6 %

L Brands, Inc.

Bath & Body Works, Victoria's Secret, Pink by Victoria's Secret 30 118,516 1.0 % 1.6 %

Rack Room Shoes, Inc.

Rack Room Shoes 22 129,699 1.1 % 1.6 %

H & M Hennes & Mauritz LP.

H&M 18 385,321 3.4 % 1.8 %

Luxottica Group S.p.A.

Sunglass Hut, Oakley, Lenscrafters 52 76,178 0.7 % 1.7 %

Ralph Lauren Corporation Polo Ralph Lauren, Polo Children, Polo Ralph Lauren Big & Tall, Club Monaco 33 358,736 3.0 % 1.6 %

Childrens Place Childrens Place 23 136,276 1.2 % 1.5 %

Levi Strauss & Co.

Levi's 27 111,510 1.0 % 1.6 %

Famous Footwear, Allen Edmonds 27 152,156 1.3 % 1.6 %

Rue 21 Rue 21 19 114,559 1.0 % 1.4 %

Total of Top 25 tenants 941 6,107,051 53.3 % 63.7 %

(1) Excludes leases that have been entered into but which tenant has not yet taken possession, temporary leases and month-to-month leases.

(1) Excludes leases that have been entered into but for which the tenant has not yet taken possession, temporary leases and month-to-month leases.

Includes all retail concepts of each tenant group for consolidated outlet centers;

tenant groups are determined based on leasing relationships.

(2) Annualized base rent is defined as the minimum monthly payments due as of the end of the reporting period annualized, excluding periodic contractual fixed increases.

Includes rents which are based on a percentage of sales in lieu of fixed contractual rents.

Includes rents that are based on a percentage of sales in lieu of fixed contractual rents.

Significant Property

8 unchanged sentences

(1) Average annual base rent per square foot is calculated based on base rental revenues recognized during the year on a straight-line basis including non-cash adjustments to base rent required by GAAP and the effects of inducements and rent concessions divided by the weighted average square feet of the Deer Park Outlet Center.

The decline in the average annual base rent per square foot in 2020 compared to previous years reflects the decline in occupancy from 99% in 2019 to 89% in 2020 and rent modifications primarily due to a number of tenants filing bankruptcy during 2020.

The increase in the average annual base rent per square foot in 2021 compared to 2020 reflects the increase in occupancy from 89% in 2020 to 95% in 2021 and temporary rent modifications primarily due to a number of tenants filing bankruptcy during 2020.

Depreciation on the outlet centers is computed on the straight-line basis over the estimated useful lives of the assets.

19 unchanged sentences

Total 78 559 $ 34.50 $ 19,298 100 %

(1) Excludes leases that have been entered into but which tenant has not taken possession, vacant suites, temporary leases and month-to-month leases totaling in the aggregate approximately 133,000 square feet.

(2) Annualized base rent is defined as the minimum monthly payments due as of December 31, 2020, excluding periodic contractual fixed increases and rents calculated based on a percentage of tenants' sales.

The annualized base rent disclosed in the table above includes all concessions, abatements and reimbursements of rent to tenants.

(1) Excludes leases that have been entered into but for which the tenant has not taken possession, vacant suites, temporary leases and month-to-month leases totaling in the aggregate approximately 180,000 square feet.

(2) Annualized base rent is defined as the minimum monthly payments due as of the end of the reporting period annualized, excluding periodic contractual fixed increases.

Includes rents that are based on a percentage of sales in lieu of fixed contractual rents.

Compared sentence by sentence after normalising whitespace, quotation marks, case and digits, so re-formatting and restated figures do not read as changed language. Wording changes appear as one removal and one addition. The current filing and the prior one are authoritative.

What changed 10-K

Item 2. Properties