Item 2. Properties
ITEM 2. PROPERTIES
As of December 31, 2023, our consolidated portfolio consisted of 31 outlet centers and one open-air lifestyle center, totaling 12.7 million square feet located in 18 states. We own interests in six other outlet centers totaling approximately 2.1 million square feet through unconsolidated joint ventures, including two outlet centers located in Canada. Our portfolio also includes two managed centers totaling approximately 760,000 square feet. Each of our outlet centers, except one joint venture property, features the Tanger brand name. Our consolidated centers range in size from 181,687 to 739,148 square feet. The centers are generally located near tourist destinations or along major interstate highways to provide visibility and accessibility to potential customers.
We believe that our centers are well diversified geographically and by tenant and that we are not dependent upon any single property or tenant. No property comprises more than 10% or more of our consolidated total assets as of December 31, 2023. Our asset in Deer Park represented more than 10% of our consolidated total assets in 2022. With the addition of Nashville, Asheville and Huntsville, Deer Park's total assets now fall below 10% of our consoliated total assets. No property comprises more than 10% of our consolidated revenues for the year ended December 31, 2023.
We have an ongoing strategy of acquiring centers, developing new centers and expanding existing centers. See “Management's Discussion and Analysis of Financial Condition and Results of Operations - Liquidity and Capital Resources” for a discussion of the cost of such programs and the sources of financing thereof.
As of December 31, 2023, of the 32 centers in our consolidated portfolio, we own the land underlying 26 and have ground leases on all or a portion of six centers. The following table sets forth information about such land leases:
Center
Acres Expiration Expiration including renewal terms at our option
Myrtle Beach Hwy 17, SC 40.0 2027 2096
Atlantic City, NJ 21.3 2100 2101
Sevierville, TN 43.6 2086 2086
Riverhead, NY 47.0 2024 2039
Mashantucket, CT (Foxwoods) 8.1 2039 2089
Rehoboth Beach, DE 2.7 2044 2064
Generally, our leases with our center tenants typically have an initial term that ranges from 5 to 10 years and provide for the payment of fixed monthly rent in advance. There are often contractual base rent increases during the initial term of the lease. In addition, the rental payments are customarily subject to upward adjustments based upon tenant sales volume. A component of most leases includes a pro-rata share or escalating fixed contributions by the tenant for property operating expenses, including common area maintenance, real estate taxes, insurance and advertising and promotion, thereby reducing exposure to increases in operating expenses resulting from inflation.
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The following table summarizes certain information with respect to our consolidated centers as of December 31, 2023:
State Number of
Centers Square
Feet %
of Square Feet
South Carolina 5 1,605,812 13
New York 2 1,468,428 12
Alabama 2 1,205,760 9
Georgia 3 1,140,579 9
Pennsylvania 3 999,762 8
Texas 2 823,650 6
Tennessee 2 740,624 6
North Carolina 2 701,362 5
Michigan 2 671,571 5
Delaware 1 547,937 4
New Jersey 1 484,748 4
Arizona 1 410,753 3
Florida 1 351,691 3
Missouri 1 329,861 3
Mississippi 1 324,801 3
Louisiana 1 321,066 3
Connecticut 1 311,229 2
New Hampshire 1 250,558 2
Total 32 12,690,192 100
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The following table summarizes certain information with respect to our consolidated centers in which we have an ownership interest as of December 31, 2023. Except as noted, all properties are fully owned:
Location Legal Ownership % Square Feet (4)
% Occupied (4)
Consolidated Centers
Deer Park, New York 100 739,148 100
Riverhead, New York (1)
100 729,280 94
Huntsville, Alabama
100 651,024 88
Foley, Alabama 100 554,736 97
Rehoboth Beach, Delaware (1)
100 547,937 99
Atlantic City, New Jersey (1) (3)
100 484,748 89
San Marcos, Texas 100 471,816 98
Sevierville, Tennessee (1)
100 449,968 100
Savannah, Georgia 100 448,089 99
Myrtle Beach Hwy 501, South Carolina 100 426,523 99
Glendale, Arizona (Westgate) 100 410,753 100
Myrtle Beach Hwy 17, South Carolina (1)
100 404,710 100
Charleston, South Carolina 100 386,328 100
Asheville, North Carolina 100 381,600 96
Lancaster, Pennsylvania 100 376,203 100
Pittsburgh, Pennsylvania 100 373,863 100
Commerce, Georgia 100 371,408 100
Grand Rapids, Michigan 100 357,133 98
Fort Worth, Texas 100 351,834 100
Daytona Beach, Florida 100 351,691 100
Branson, Missouri 100 329,861 100
Southaven, Mississippi (2) (3)
50 324,801 100
Locust Grove, Georgia 100 321,082 100
Gonzales, Louisiana 100 321,066 100
Mebane, North Carolina 100 319,762 100
Howell, Michigan 100 314,438 86
Mashantucket, Connecticut (Foxwoods) (1)
100 311,229 89
Nashville, Tennessee 100 290,656 97
Tilton, New Hampshire 100 250,558 92
Hershey, Pennsylvania 100 249,696 100
Hilton Head II, South Carolina 100 206,564 100
Hilton Head I, South Carolina 100 181,687 100
Total 12,690,192 97 (5)
(1) These properties or a portion thereof are subject to a ground lease.
(2) Based on capital contribution and distribution provisions in the joint venture agreement, we expect our economic interest in the venture's cash flow to be greater than our legal ownership percentage. We currently receive substantially all the economic interest of the property.
(3) Property encumbered by mortgage. See Notes 8 and 9 to the consolidated financial statements for further details of our debt obligations.
(4) Excludes square footage and occupancy associated with ground leases to tenants.
(5) Total excludes the Nashville, TN center which opened in October 2023 and has yet to stabilize.
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Location Legal Ownership % Square
Feet %
Occupied
Unconsolidated joint venture properties
Charlotte, North Carolina (1)
50 398,726 99
Ottawa, Ontario 50 357,213 96
Columbus, Ohio (1)
50 355,245 99
Texas City, Texas (Galveston/Houston) (1)
50 352,705 99
National Harbor, Maryland (1)
50 341,156 99
Cookstown, Ontario 50 307,883 98
Total 2,112,928 98
(1) Property encumbered by mortgage. See Note 6 to the consolidated financial statements for further details of our joint ventures' debt obligations.
Location Square Feet
Managed Properties
Palm Beach, Florida 758,156
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 centers:
2023 2022 2021 2020 (2)
2019
Occupancy 97 % 97 % 95 % 92 % 97 %
Average annual base rent per square foot $ 26.07 $ 25.25 $ 23.79 $ 21.10 $ 25.35
(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 total square feet of the consolidated portfolio. Average annual base rent excludes common area maintenance and reimbursements.
(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.
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Lease Expirations
The following table sets forth, as of December 31, 2023, scheduled lease expirations for our consolidated centers, assuming none of the tenants exercise renewal options:
Year No. of Leases Expiring Approx. Square Feet (in 000's) (1)
Average Annualized Base Rent per sq. ft Annualized Base Rent
(in 000's) (2)
% of Annualized Base Rent Represented by Expiring Leases
2024 453 2,117 $ 28.34 $ 60,002 19
2025 429 2,152 27.68 59,571 19
2026 358 1,654 29.58 48,935 15
2027 253 1,346 31.23 42,049 13
2028 254 1,582 28.09 44,445 14
2029 102 407 35.23 14,350 5
2030 66 395 32.70 12,922 4
2031 31 213 26.06 5,545 2
2032 62 465 27.11 12,610 4
2033 64 263 36.64 9,619 3
2034 and after 35 197 35.46 6,998 2
2,107 10,791 $ 29.38 $ 317,046 100
(1) Excludes leases that have been entered into but which tenant has not yet taken possession, vacant space, leases that have turned over but are not open, and temporary leases, totaling in the aggregate approximately 1.9 million square feet of our consolidated 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 that are based on a percentage of gross sales in lieu of fixed contractual rents and ground lease 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.
Expiring leases
The following table sets forth information regarding the expiring leases for our consolidated centers during each of the last five calendar years:
Total Expiring Renewed by Existing
Tenants
Year (1)
Square Feet
(in 000's) % of
Total Center Square Feet (2)
Square Feet
(in 000's) % of
Expiring Square Feet
2023 1,766 17 1,642 93
2022 1,968 17 1,559 79
2021 1,728 15 1,359 79
2020 1,526 13 1,096 72
2019 1,320 11 1,020 81
(1) Excludes data for properties sold in each respective year.
(2) Represents the percentage of total square footage at the beginning of each year that is scheduled to expire during the respective year.
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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 centers. (1)
Renewals of Existing Leases Stores Re-leased to New Tenants
Initial Rent (2)
Initial Rent (2)
($ per sq. ft.) ($ per sq. ft.)
Year Square Feet
(in 000's) New
Rent
Spread % (3)
Square Feet
(in 000's) New
Rent
Spread % (3)
2023 1,711 $ 37.78 12 157 $ 46.58 37
2022 1,693 $ 30.72 9 122 $ 43.47 28
2021 978 $ 31.08 — 192 $ 29.27 (4)
2020 1,077 $ 22.90 (8) 91 $ 30.02 (5)
2019 967 $ 25.36 (7) 385 $ 28.34 (21)
(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
We believe that our ratio of average tenant occupancy cost (which includes base rent, common area maintenance, real estate taxes, insurance, advertising and promotions) to average sales per square foot is one of the lowest in the retail industry. The following table sets forth for tenants that report sales, for each of the last five calendar years, tenant occupancy costs per square foot as a percentage of reported tenant sales per square foot for our consolidated centers:
Year Occupancy Costs as a
% of Tenant Sales
2023 9.3
2022 8.6
2021 8.1
2020 N/A (1)
2019 10.0
(1) As a result of the COVID-19 pandemic, retailers' stores were closed for much of the second quarter of 2020 due to mandates by order of local and state authorities. 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, 2023, our occupancy cost ratio increased to 9.3%. The increase from 2022 predominantly relates to higher tenant occupancy costs.
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Tenants
The following table sets forth certain information for our consolidated centers with respect to our 25 largest tenants based on total annualized base rent as of December 31, 2023 (1) :
Tenant Brands # of
Stores Gross Leasable Area (GLA) % of
Total GLA % of Total Annualized Base Rent (2)
The Gap, Inc. Athleta, Banana Republic, Gap, Old Navy 90 949,229 7.5 % 5.7 %
SPARC Group Aéropostale, Boardriders Outlet, Brooks Brothers, Eddie Bauer, Forever 21, Lucky Brands, Nautica, Reebok, Vince, Volcom 94 550,322 4.3 % 3.9 %
KnitWell Group LLC; Lane Bryant Brands Opco LLC Ann Taylor, Lane Bryant, LOFT, Talbots 79 418,633 3.3 % 3.5 %
Under Armour, Inc. Under Armour, Under Armour Kids 31 280,232 2.2 % 3.2 %
Tapestry, Inc. Coach, Kate Spade 51 239,312 1.9 % 3.2 %
American Eagle Outfitters, Inc. Aerie, American Eagle Outfitters, Offline by Aerie 48 318,394 2.5 % 3.1 %
PVH Corp. Calvin Klein, Tommy Hilfiger 37 282,975 2.2 % 2.7 %
Nike, Inc. Converse, Nike 32 397,580 3.1 % 2.5 %
Signet Jewelers Limited Banter by Piercing Pagoda, Jared, Kay Jewelers, Zales 52 112,473 0.9 % 2.2 %
Columbia Sportswear Company Columbia Sportswear 23 178,334 1.4 % 2.1 %
Carter’s, Inc. Carter's, OshKosh B'gosh 41 180,420 1.4 % 2.0 %
Capri Holdings Limited Michael Kors, Michael Kors Men’s 28 142,986 1.1 % 1.9 %
Luxottica Group S.p.A. Lenscrafters, Oakley, Sunglass Hut 62 98,282 0.8 % 1.9 %
Skechers USA, Inc. Skechers 29 160,163 1.3 % 1.8 %
Rack Room Shoes, Inc. Off Broadway Shoes, Rack Room Shoes 25 178,348 1.4 % 1.7 %
Hanesbrands Inc. Champion, Hanesbrands, Maidenform 34 166,204 1.3 % 1.7 %
Express Inc. Express Factory 26 182,114 1.4 % 1.7 %
V. F. Corporation Dickies, The North Face, Timberland, Vans 28 149,287 1.2 % 1.7 %
Adidas AG Adidas 24 170,501 1.3 % 1.6 %
Levi Strauss & Co. Levi's 29 121,946 1.0 % 1.6 %
Chico’s, FAS Inc. Chicos, Soma Intimates, White House/Black Market 37 109,369 0.9 % 1.6 %
H & M Hennes & Mauritz LP. H&M 19 406,125 3.2 % 1.5 %
Ralph Lauren Corporation Polo Children, Polo Ralph Lauren, Polo Ralph Lauren Big & Tall 31 352,490 2.8 % 1.5 %
Caleres Inc. Famous Footwear 25 148,489 1.2 % 1.3 %
Rue 21, LLC Rue 21 19 114,559 0.9 % 1.3 %
Total of Top 25 tenants 994 6,408,767 50.5 % 56.9 %
(1) Excludes leases that have been entered into but which tenant has not yet taken possession, leases that have turned over but are not open and temporary leases. Includes all retail concepts of each tenant group for consolidated 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 that are based on a percentage of gross sales in lieu of fixed contractual rents and ground lease rents.
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