Tanger rides strong Q4 to remain stable in 2019
Tanger Outlets recaptured almost 200,000 sq. ft. of retail space at its centers in 2019 due to bankruptcies and brand-wide restructurings. But a strong fourth quarter lifted its portfolio-wide occupancy rate to 97%, slightly ahead of how it ended last year, according to the company’s quarterly and year-end earnings reports.
"Better than anticipated performance in the fourth quarter and throughout 2019 enabled us to surpass our expectations. Increases in traffic and sales validate consumers' ongoing desire for the best brands, prices, and shopping experience at Tanger Outlets," said CEO Steven B. Tanger in a statement.
Average tenant sales productivity was $395 per sq. ft. last year, compared to $385 per sq. ft. at the conclusion of 2018, according to the report. Same center tenant sales across the Tanger portfolio increased 1.5% in the year ended Dec. 31.
At the same time, Tanger centers posted a 0.4% decrease same-center net operating income. This was due primarily to the impact of tenant bankruptcies, lease modifications, and store closures, the company stated.
Blended average rental rates increased 2.7% on a straight-line basis and decreased 1.3% on a cash basis for all renewals and re-tenanted leases.
While he admitted that filling vacated space with new tenants will take time and effort, Tanger said the company’s strategy was to strive to upgrade the quality level of tenants and consumer experience.
“Brand name retailers remain committed to the outlet distribution channel and continue to benefit from our value proposition, including our low cost of occupancy," Tanger said.