Earnings call transcript Q2 2023

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Ashley Curtis

Good morning. This is Ashley Curtis, and I would like to welcome you to the Tanger Factory Outlet Centers Second Quarter 2023 Conference Call. Yesterday evening, we issued our earnings release as well as our supplemental information package and investor presentation. This information is available on our Investor Relations website, investors.tanger.com.

Please note that during this conference call, some of management's comments will be forward-looking statements that are subject to numerous risks and uncertainties, and actual results could differ materially from those projected. our detailed the and discussion to Commission and uncertainties. you a for of direct filings Securities with Exchange We these risks

measures as comparable net FFO, of our to Core included During non-GAAP earnings funds debt. available are G, will Reconciliations we or FFO, GAAP adjusted funds defined FAD, the release EBITDAre distribution, measures net same-center including or the measures Regulation income, our by most these in operations also from financial non-GAAP for directly SEC operating call, in financial and discuss information. and supplemental

is for in time recorded call This being for a period future. rebroadcast of the

XXXX. As listen-only that only At management's all such, participants that mode. note of may to be information is it comments accurate include X, today's this are important time, in time-sensitive as August date,

will Following Instructions]. question. prepared the management's comments opened for your [Operator be call

be call and Yalof, Executive and Chief today the Chair; President, Executive Financial On Michael Vice Stephen will Tanger, President Investment Executive Officer. Chief and Steven Officer; our Bilerman, Chief Officer

In of for team leadership Q&A. members our will available be other addition,

over now Steven the call Steve. to will I ahead, Tanger. Please turn go

Steven Tanger

Good quarter thank call. XXXX our morning, for second earnings you for joining and us

the our attractive outlook. the of We in value to platform to center Tanger in drive newest our continues team forward to The we and organic confident remain unlock growth. external opening and of look the Nashville, Tennessee

turn now Yalof. call over will the Steve I to

Stephen Yalof

Thanks, Steve, and morning. good

balance the was our than tenant center that drive a strong and quarter NOI elevate anticipated another additional results and We're realize continued leverage for increase our of second announce full plan increased the of the and guidance delivered to to year. sheet for our total better our X.X% contributed We mix, pleased which quarter, to same execution growth. to demonstrate and diversify rents platform of strategic

with has sought and leasing Leasing to of portfolio activity that create an recovery curate enabled after rent seek. expense growth The be strategy a successful drive to our a experience, continues shoppers occupancy, us highlight. execution brands rebuild

quarter of highest second pre-COVID. Occupancy In the XX our quarter, another and spreads basis stood we us of since and up gains. on XXX year-over-year lease quarter positive giving sequentially XX.X% occupancy points June at Xth consecutive our basis points XX marked occupancy

As commitment XX leasing rents XX, average and higher strategy June incorporates the spreads our we locking months to rental rent in ending trailing discussed grew recoveries. to increased a spreads expense XX.X% XXXX. XX.X%. fixed grew and rates renewal XX.X% Re-tenanting Blended

open commitment in to drive Tanger our rents is branded allowing us renewal to rent capture to of the Our air solid our ability increases portfolio, retailers' clearest demonstration upside.

As of expiring represented are actively year of the of end leases process addressing to executed this second renewals XXXX. in year. last And XX% with the role consistent we quarter, our or

are in this rents occupancy, We our have confident growth. ability rebuilt sustain our to and grown our

We have tenant our continue add mix to prioritized portfolio. to diversifying and our new brands

traffic to of center mission customers of new draw is Marcos, furniture has our to they Texas, recently example generator stay Wayfair. created when been and a design San within proven opening have a hardware, West on home Shack recent newly destination delivering This Elm in furnishing the opened brands, One restoration longer multiple outlet great visit. Shake with including coupled our reach, We have and

adding on in gains focus continued our quarter. converting contributed the Our permanent occupancy new to and temporary spaced brands has

the filling leasing brands of overtime. the XXth We will portfolio tenants objective our introduce most continue to strategy strategically to centers compelling with the with to new utilize our

to our from period to points Furthermore, by ability ratio XX confidence the our prior X.X% continue we've of one X% our lowest the which from to in still cost rest. supporting increased is basis the occupancy grow in industry

productivity. Traffic across tenant in saw continue downsizing reducing a underperforming sales. prior highly brands and in achieve tenants decline we with largely or our productive by portfolio NOI average was optimizing maximum line slight to and on focus We year portfolio enhancing the our quarter to

shoppers our that introduction Loyalty with promotions of our Tanger quarter, brands a Tanger Program even our launched second strong can new of the participating across network. as with last gravitated model. provided the value to store In members outlet better The enjoy pricing and consistent greater value month Club everyday start our

engagement. Our rewards to program for experience for also each an Club to it. delivering provides offers and This the member's for for our purchases enables offers. retailers unlock invite us new by these increasing of loyalty Tanger retail digital to first shoppers to visits I levels to with join experience partners customized better retailer opportunity them tailored targeted each new provides and and valuable interests of our specifically drive and interact from to program

we second impact our a quarter, and where more the committed our ESG reducing latest report, In resilient remain to some cultivating report. business. we In published employee We highlighted the do and healthier, including communities use meet first fostering people of over environmental gas to of we standards. emissions, EV achievements, solar XXX% high fleet certifying infrastructure, our electrifying our security greenhouse capabilities, LEED's our reducing XXXX our and GLA of of doubling energy half charging vehicles culture doubling

extremely that on Tanger grand to our will Nashville share pleased XXth open Center October XX I'm this year. of Lastly, Shopping

XX% the accessories, new XX international brands an many to cosmetic home under best very fashion we As new with which assortment Tanger of athletic, opening, outlet today, to the executed channel. and furnishing until amazing currently and with lease days of of and national just are are

serves food project's space a offerings will iconic as combination park and Nashville a famous dining indoor beverage local of with Tanger national and feature outdoor centerpiece. community surrounding also the central terraces and that half-acre

certification. center for silver qualify LEED The will

growth but expanding incremental while strategy existing we of confident our are pressures of organic centers monetizing as driving and As and macroeconomic we ahead and in the we retenant revenue external are our streams. diversifying continued mix, our peripheral renew tenant select aware proven land, growing our look portfolio

stakeholders to support. thank Our our entire for want provides our I balance execute sheet people, and platform retailers continued and shoppers, initiatives. opportunity on team, their to strong our all of us these

to Michael. like over call to turn now the I'd

Michael Bilerman

Thank you, Steve.

I'm our I'm results, to our initiatives, came discuss external growth XXXX ahead Today our position, in balance with budget, going which and going increased our our to guidance. of end sheet financial strong

quarter rents rent ahead $X.XX FFO the second prior which year in results Same as from of expense gains about, NOI of and X.X% in that Our operating occupancy well higher higher the our and spreads, the expense total recoveries, timing activity driven some expenditures. quarter with as and talked the expectations from our the the led efficiencies share Steve robust core period. leasing in of for have base to per strong benefits increased to for center of came by $X.XX compared X.X% portfolio year-to-date our

operating to total our and also structuring higher rents. rental Our CAM leases percentage rents ongoing results of reflect while converting fixed strategy to contributions, grow revenues

We leveraged, laddered sheet continue objectives. well liquidity conservatively a to the the and balance growth our with flexibility pursue maintain to

addressing significant until expiration million been and XXXX, February rate proactively the debt maturities our no in of current $XXX we've late have We XX, of interest swaps.

of end billion first and cash the debt million had we rata we of investments. and $XXX the pro $X.X and had quarter, our equivalents At short-term cash

We with aggregate immediate credit, million lines of of also $XXX Tanger over unsecured on full had liquidity. our million provides which in $XXX availability

for retail EBITDA, costs which on to-date times of the come were lowest debt was carrying in net and going commensurate Nashville X.X the ended next $XX importantly, Our for without the sector adjusted incurred XX is are June the in EBITDAre to to months year. we XX, million

Moody's quarter, grade BBB S&P. the with our are further and ratings existing we grade adds receive both During pleased strength of balance from Fitch, by an validation investment which to sheet investment our rating to

XX addition updated basis the going unsecured With realize of cost which rating, lines reduction with point on our our term improved loan this range. as of as an credit debt guidance into we're factored a well to is of our

of million locked agreements, be of these a SOFR adjusted expiring current $XXX of our swaps February of Now of swap starting the in up rate we $XXX will forward have expirations in and we've on X.X%. X.X% from at swap rate executed interest in rate terms XXXX, attractive that million

the take of mid-twenty isn't duration is us swaps and years, XXXX. our from swaps the impact next And There new XXXX. into average X.X until debt September next 'XX. expiration swaps at which will Our in of would carry these February an start no current maturity

well drive delivering. strong liquidity our low the flow free ratio dividend cash dividends with payout company additional that sheet providing quarterly along our covered continued growth. we're to With free remains continued and with balance flow a Our position our after with cash the leverage low cash

and have We including land, centers, optionality Open growth Air of expanding opportunities, acquisitions by significant the our to our Shopping activating development Centers. new pursue peripheral additional

of be use Now end cash Nashville of $XX leaves immediate the through range we million of midpoint in have spend cost incurred needs, third majority costs $XXX of is And spend fourth the incurred narrowed the, and $XXX quarter, our to during second the funding at of million quarters. which million terms will million the the the to-date our our $XX the and for development. largest maining to against

And are very increasing basis leasing to by due center. to points a for are to on that, stabilize X% projected our of to our we range XX pleased we activity primarily the also note this outlook project, yield successful and X.X% forward

anticipated XXXX performance guidance, the and year. better remainder than second the the our reflects outlook to for turning which in now increased the And our of quarter

$X.XX We our midpoint $X.XX a revise expectations by range a at FFO $X.XXX to to core for are of increasing share.

midpoint growth interest NOI to XX by midpoint basis range increasing million remained X.X% and also the the to at at the are expectations $X at a and rates We have increased elevated. points the center X% by other income interest same as

in XXXX allowances. to generation in down is $XX which at renewal the We're which to anticipated largely a million, tenant activity, $XX midpoint recurring higher also second range $X our the million of reduces reducing turn CapEx million to due the

assumptions, issued please on our additional night. release For key details our see last

the like questions. And I'd Operator? call to open for up now

Operator

Instructions] Please with Thank McGinnis our the And Greg you, with of question from Scotiabank. questions. you. Thank your line [Operator comes first again. proceed

Greg McGinnis

expectations or on, morning. good factors debt drive and range that you in year of seen the impact to the touch far? just what bad full top Tanger to could of bottom could you so guidance end addition the have Michael, on guys Hi,

Michael Bilerman

Greg. Sure. Thanks,

our the you really end guidance interest if that's and G&A, of guidance whether in assumptions of same-store of the the other elements, high to top it's other and going range. income, majority get our interest, at range low and the and you release, to it the is bottom look the So, all

terms In our when debt, initiated we guidance the year. beginning bad of

at If you remember, to $X.XX. year the started $X.XX we

the lifted same-store XX guidance that by increased XX increased where guidance last $X.XX by that quarter our to we've and on a with today, of that just low we being again watch our guidance debt, were points We we basis about raising basis talked and And about, approach sit by we same-store now points mindful midpoint, and range level, prudent in here overall on list, we we we're how continue environment. bad the as guidance

Greg McGinnis

Thanks. path it initial that Could and real to just quick. moving the in Nashville on And time? yield see yield Nice Okay. you opens to of rate stabilized what touch when the to there. to like terms lease expected that, the X% looks achieving full X.X% XX% on

Michael Bilerman

the last is that forward late where a execution did see. Xs Sure. expect outlook of increase the to-date, the stabilized I leasing before, said call leased. about still think, as as points. the XX% or We're ground, in that to on Nashville really by center out able We the maybe basis start. call in open X% the October, the XX to the in we've yield been do in excited going Based coming all in and we our out Coming we the, we

where I center center remember to ensure there's marketing said new build if they the of there's dreams, of the in opening come, and will customers you lot they town. few our it a a know

yield to ramp that years, over from going that that just as X%. stabilized as build to the a course the X.X% expense well building number there's So to sales of marketing perspective are of of

Greg McGinnis

Fair.

Okay. Final me. from question

based more top our newly outside leased GLA than tenants XX% went math, on XX. So in the to QX of

there that Just give know, that about than fastest you're you any you the - outlet as tenants is other I others? in to, proud destinations, portfolio furniture, point you you. faster talking ones any color on in being with appreciate And growing tenants any the the who's to portfolio and growing have the you're new can but with

Stephen Yalof

I'd you. things sure. themselves, than on some focus to category, but share Yes, more love with I'll retailers

make just numbers, your extremely our rates been high. sure of First have renewal all, in

it our of portfolio lot that seen voting rent relatively so. you've So increases in a do do order when in to tenants renewals, is really to And existing our pay cost. capital do leasing remember, XX% around a stay that lot velocity that we low and of we averaging

tenants Victoria's lot probably the of a us. of you in them Adidas imagine, in we've can with business, brands, new a to I've the of my number a the for contributor big talked portfolio furniture new apparel athletic been active, a lot With and regard quite deals We done are tenants as Secret that listed brands. remarks leasing earlier. of a the has in lot the about

and a of Shack We food half, at our part our far number saying we've year Marcos, a the Santa other in we'll of become and then forward. beverage, Shack And up last business have moving been a Shake has our first two in just years, important centers for opened more Shake which joining us and

channel and us. just to success quick sampling, lot with direct other categories, coming to the now brands. brands outlet So of a direct consumer growing that's they're just a random with finding consumer We're into

we've a first first our that a brand, to opened Beach Myrtle of in portfolio. store Their brands example expanding direct throughout of with is us leased. Sevierville number a great store there's and now their is rapidly ever consumer So

Greg McGinniss

Steve. Thanks,

Operator

Our of Todd Please the next proceed from questions. Markets. question Thomas comes KeyBanc your line with with Capital

Todd Thomas

morning. Good thanks. Hi,

First higher drive rent total which expense about. question, 'XX expenses in operating by it's higher about your know revenue, not is good. you base X,XXX income to ask to 'XX the been and basis lower rate points over initiative talked is wanted overall to an just quarter. expense compared And I reimbursement and I recovery the component, which the

into about XXXX? as making of the Is good year heading you're we there. the really and this So end back progress think sustainable

Stephen Yalof

of a Todd. on. couple things Thanks, going There's

So as about, has to an and our drive you total we've structuring leases rent, CAM. our in driven we've as talking been been which articulate increase fixed

both course over year last that's relative And this CAM. so fixed us with right, which as NOI we numbers the the paying well as driving to flowing part base, of retailers the total what's in are of in in year,

of whole obviously snow, which of operating the the course our the It but same our over business of terms expenses variable. that a first look given didn't timing so of in obviously go still year, recovery fixed to like the in There's Now, high. had have the you the that, we fixed will quarter, amount was fixed got we lighter it's snow things very and much when CAM, more CAM are snow we so didn't where percentage which expenses, much and

those of to this our continued a had the also We amount we've continued expenses. quarter where expenses, but mitigate as of timing much

another what this center more of X.X sort had to marketing we're XXs for percentage entire And the think would believe of of a on be in that's our the should the XXs first And half. in really tend at heavier the to year is in So our Therefore, guiding expect X, the terms probably in relative first rate high expenses, low you to the year. which being that full example as we've half back the relative in be we to year year. same average in our growth, about like of basis recovery on to the back we the NOI of half year half expense the

Todd Thomas

of over rate couple helpful. you sort share, another and points if That's recovery looks seems. since more of continue or this been maybe at little quarters. potentially you the rate expense years. we leases XXX Then it greater or of climb to move what a, executed initiative, know, XXXX the on a target a share the or are basis was could that I'm a recovery than Okay. you've few it little of new you've implemented little could harder see you you the Maybe Can that talk driving recently, expense bit rate able XXX% like you're to over kind up about margin bit. on leases higher not sure, the achieving sort a if last

Doug McDonald

Doug. Hi, Todd, it's

over future years. a to We total recovery we guidance and can few provide rate target Michael rate are the that recovery to But next we're years. at that we move point drive like in but, continuing higher expect we not rent, on where do said, would the

Todd Thomas

I prepared could, talked think I remarks, slated external positioned being about opportunities if then Nashville last open is just track wanted October growth. And and additional you in for touch to Okay. to I on question. your just on in

Just speak that you initiatives wanted growth any external to or you're developments could to see to if say. new beginning

Stephen Yalof

strong is XX% this opening I Todd, as We time. long in there a very mentioned I've - be executed, with of a definitely a by business we prior able looking been out about evidenced to the lease outlet quarters, doing to Nashville. we're XX business number days how lands. at until lease for quickly mean, we're that think transactions, continues

that that's one think seen. highest that of leased I've I the

So think forward you announce on to this there's we're what that changes, thinking we're with as excited and the looking grow nothing grow we're to about that. call Obviously, this build. And today, and platform to but where room country. to we that about looking across sharing we're

Todd Thomas

Okay. All Thank right. you.

Operator

of question Samir with Please Khanal the comes your next Our questions. line with Evercore. from proceed

Samir Khanal

everyone. morning, is rents rents to flat sales if still were your here? you ratios little what I Good to Steve, your but I ability are still understand Thanks. I ability push talk mean, to low, push and sales occupancy about even continue cost here. down are bit can mean, here. a

Stephen Yalof

higher price is great our favor struggling. priced. product promotionally we that in point see to happens now higher mean, think sales a Thanks. obviously, I but that's price to lot point look at lot us, sales has a the with be the metric brands, And platform. that an of for through products all impact I number. in important across right market channels, is I do What

optimistic compare up at there'll a year the XX% positive and in XX% you second to be take that truly of sales we're manage think the and the to second be some we productivity holding still look year. rate. half sales half We're If of the impact about at and XXXX, our

you that at our growth. product seen great continue We've estate. we're actually And selling is to real the push estate. that know, But, we you on the pricing said, look if real

rent forward. Our rents quarters of re-tenanting for growth push is runway, increase, a consecutive still lot us there's headroom a spread X going XX% of our to of we lot think

X%. We're about extremely You huge first here, I mentioned now our about pushing COVID, middle up occupancy But was XXX started of plenty when to that, because XXX that to of points room greater occupancy - basis and our cost than of points historic think over ratio highs a that cost are, the to in over we us basis low. push. ours. for We talked of there's ratio, focus continue

leasing rents. is extremely Our team pushing on focused

although XX.X%, have at trade, point, is very and main if occupancy NOI to Our is our high, for focus. we rent growing occupancy rent this really

Samir Khanal

you're as And it And just think a uncollectible there know you a maybe it. year even next sits think into in position, what that, revenue, like that $X Michael, was to? tenant when Got about mean, I I any the list watch feels I early about million think? there. today, you was it good sort related bit at on reads maybe long-term in of looking but the

Michael Bilerman

I nothing think in low. within of all the with guidance, remains just embedded we're that ordinary out consistent of. we list have just mindful is quarter the this bad watch our things within that our the debt and portfolio, some It's

Samir Khanal

you. Thank

Operator

of your proceed next questions. Mailman with from Please Citi. Craig question the line is with Our

Craig Mailman

Hi, good morning.

costs have the as on the than have on but other more earmarked vis-a-vis you've would million know, I'm opportunities. Clearly to your some right at rank, But then, follow-up different rise curious things part you that here, which the finish leasing $XXX debt that - deals done. Michael, of deployment set and of equity probably capital How you improved, to cost look of to that want that cash. opportunities - guys and continue of the of for, the attractive here. has kind just costs you Just options now? Nashville your capital, you you

Michael Bilerman

and end I'm create something, disciplined and Craig. have curious be the so value. where of want we're to we want prudent Sure. that the happy strategy. you're to going really day, external to growth do about we At to Thanks, our deals do

significant of sheet we're Steve our We on have different sort deploy. looking that's the optionality lot And of opportunities highlighted. given, that capital at balance to a

the sort get relative financing capital we deal, well see we're opportunity the or development. of And capital future. current its we've when we And add Tanger of significant a to at strategy long-term over as in We leasing across marketing strategy how or a there's value really we're that and to well operating our feel evaluate acquisitions terms cost evolving lot our opportunities with it different as of IRR looking how platform of strategy the we'll built. that as as

Craig Mailman

what something of of the adjusted going have you you centers? to I about, another on then guess returns kind what in risk targeting there? need would you - if think existing And the outside differential of kind outparcel doing to you be if portfolio open kind new, or their shopping IRR right of would do a outlet potentially an asset, either

Michael Bilerman

intensification own So a the we two our where that, we but things. capital of at already The fund or us as is of existing adding real know, part as outparcel sites very look different center. a cash very has liquidity. is high doing in return, building size, those density And well we set business. different center scale, terms to a it free And acquiring than opportunity obviously estate the have our those to you land, initiatives as allows significant amount of larger just are our flow a

we're look at time that to over opportunity truly And we are the that stand what deal, something we or own. every what at got to we're buying is someone, Craig's something whatever with and its joint And venture buying. with either center a a the or on economics got we're you we're look then going know, we're are as growth, things developing strong

Craig Mailman

Okay.

I one. think quick just one last

from nice deposit like of here. that you interest rate think you and getting lift sitting the have You feel a hopper rates guys But up, sustainable about you're kind commencements cash, run we that of here. enough on Do diminution, a guidance are in run from 'XX to are going as so aren't income right to to that capital, knowing had guys haven't the income deploying offset sense? given in losing just yet, sort in a kind going trying 'XX, that of get potentially we guys interest you that rates any you have

Michael Bilerman

is our income interest we're earning currently, on it. cash Look,

hope Our is, cash. a I out hope our that this think yield and that would go buy we and going be you anything true, higher is to than is

that hurdle we should be So, us should for be a able, decent to get over.

So we accretion as are to on only right now Nashville, in out. spot $XX $XXX main capital we deploy are commitment. as we and that additional capital that's put cash, feel going a left see million million We to cash from fund the we it with of great

then the we the which forward deploy. ratio, we the as XX% retain That if more to liquidity look just half, in our cash half. because as was over we in payout were you adds go at able in dividend to XX next range that the first And first months flow

Craig Mailman

Thank you.

Michael Bilerman

Craig. Thanks,

Operator

are the Sachs. line questions next proceed Please Goldman with with of question. your Our from Caitlin Burrows

Caitlin Burrows

sounded on last Michael, Hi. Good just could Maybe you were expansion following point, morning, be outlet up everyone. it possible. that suggesting like

perspective? just guess Beach? XXX% San Park, that just there wondering is places a category extra that that land the land centers guess, XXX, if I at Foley, but a fall XXs, demand and there like, Myrtle from Marcos, that look high occupied or number of Deer I when into high XXs opportunity. So is you are There's to wondering at

Stephen Yalof

Steve Right. Yalof. Caitlin, it's

just of to some question, So that in is of our lot occupancy, also that answer temp tenants. embedded a

we've there opportunity. four So to rent I in our past, been, we if is temp three understand to the market, times marked space

in of locations part shared. some really organic that's think I that you story, those So, particularly our of important growth

Also shops, case we of all have Christmas opportunity. as we in the look look We happening at at Christmas with Park as where as don't that an but a example. Deer burden. a know a that great tree what's tree We shops

a drive opportunity find space and we XXX% there. engineer additional We of in and in So, shops with a Long ourselves Island to Deer it great center rent that Park. shopping into have get - number definitely back occupied

of team our With have a in regard place peripheral we solely lands, to peripheral unmonetized focused peripherally. We've a across our on revenue, got generating lot portfolio.

we of occurring So growth that's just, across great, And portfolio. all our got story. that we've that organic call anecdotes our

a So we've that and and with example great & on we're recently outparcel where Buster's. Dave construction is under

to Dave small the build, addition As in & build part Buster's shops. our we also of

for Savanna great success outparcels additional land opportunities other So, monetize. to and a us. The that a that has been for us, center. market story of and expand There's shopping number there

So, we're view. an looking of do growth organic from point those that are things to

Caitlin Burrows

on mentioned? And just still trying is it. Got that to how occupancy, figure temp follow-up a opportunity it quick XX% the is around, today? you out Just that

Stephen Yalof

tenants lot you've permanent we're It's we're a temporary - a growth into in of growth seeing that well. tenants lot probably occupancy our occupancy a trade as of in quarter this we've permanent around that, seeing but that seen last has, where been that to able

Caitlin Burrows

Got it.

now some was are percent then if rents you've level. is makes Okay. sense. increased pre And talk base you just, on focus and wondering versus like high It COVID still reimbursements, about seeing rents. which seems I rents percent mentioned the could

driving kind the and of we leakage? and to they what's wondering if of what versus expect numbers So it come should experience rents expect the extent down into do, ratios they base should shift to some we

Stephen Yalof

on pricing forward. of center and is deals company that far than our new done, percentage deals. today. are as going our better a look, in transactions for essentially power a - we've lot less re-tenanting renewing driving greater they're ability new or in percentages whether we've the as Well pay real what's were our And they ratios percentage rent estate asked Nashville, we're or make Historically better rents to

also those points been point the rates. With retailers more as a down. And have break rate which to at those the is higher natural come higher rates, pay calculated, far break agreeable

at be So achievable we higher our percentages lower a sales historic than find in those volume will company.

So earlier, back said of as the sales I in the we're optimistic half year. about

optimistic well. as actually the contribution of overage we're rent about So

Caitlin Burrows

Got it. Thanks.

Stephen Yalof

Caitlin. Thanks

Operator

your with from Floris comes of the with proceed Compass question Dijkum Please questions. next van Our line Point.

Floris van Dijkum

you operations. from morning, the is guys. flow of out Good in playing as I increasing Steve, out cash terms playbook the the, think laid

probably I'm to to it your couple for in same-store the guess you fact half? for is to is occupancy things. NOI curious, convert have slowing driving number, slow temp of high that give questions to Maybe the conversion, be going And although second your please. sounds I what slow think has biggest want are, bit So growth pretty a or perm more a going be the less guide pushed expected normally you you of it fact color. a is it well, the then implies which OCR because little going the What's my into you'll it's can't to half. much is. that that XX% some like can going more I that two simply been factor again the delve to temp still down Is some the in second as forward twice

Stephen Yalof

Right.

is So going then question about to just the first piece. we'll half Michael handle talk OCR and the of that

Michael Bilerman

Yes.

expenses are the the expenses operating second operating fixed same-store was quarter variable. is two talking annual we first Floris, about think one, I better And part earlier just the think on but the growth XXXX, we part, this In positive that's all expense same-store basis. year, load Todd the flip you quarterly expense this we the or the about, it half, you back what on an with same-store given during had mild last really and NOI, remember, to the savings sequential think little you impacting and had operating call, about and we business fixed know, bit into having winter factors, NOI, higher really year. about an the annual And really in XXXX, and CAM we in trajectory the by when our trajectory over but were our think of in a like so, on if driven into what's basis know, quarter

And supportive guidance. don't And thinking annual to on We're going that's 'XX, - we up that impact our started - X all it we of X.X We are to think that about very not drivers are was of we're to year we into we've to same-store run the an where to the about, going this into talking going based we're been business drivers on of of all rate quarterly into basis. getting now X. as X be XXXX. give the

on let I'll OCR. go And with Steve

Stephen Yalof

want you question frame OCR? on toc do So your

Floris van Dijkum

no. Yes,

going XX% from that your to is that be the is XX.X% increase of I as talked sort quarters mean, this for as earlier. low of the range. think to potentially other it the fact to is your ago, of about Xs and Xs, You OCR that that the OCR was is You've around conversion. OCR, one the think high ratio in but XX%, again, of the much as How peak progressing I temp guys How how rates maybe things is driving in fact to X% as now going I in be it's lease recently a of and much alluded drivers that the permanent upside that at structure? couple and you

Stephen Yalof

you you Look, it's business, if spreads, our a this coming you re-tenanting. all at for rent the of on quarter all I alone, look across know, have - on just - look to renewal, XX% XX% mean, the take of

So XXX,XXX feet and I mean, square without Nashville. that's leased that's that's and just to - of that sort just just we -

XX since grow press these the So of points still quarter, to continue number. we rents. there's think last We we'll continue of plenty to headroom, basis increase

aggressive. is retailers We're pay team retailers after leasing far can more more Our are that far better productive extremely rents. going productive,

do continue going of that to productive enjoying we're retailers portfolio. are are We're beginning are as with and in how the us. highly Greg call, deals brands a I sales rattled off that's And These that I merchandising number great the the new doing at our And to our that. portfolio. of mentioned leasing to

Floris van Dijkum

be the if costs one on significantly you your the exclude I Can your looked at that, I increased follow-up Obviously, CAM that last of you if guys include that? spreads don't CAM of aspect correct well. What years. have your operating rent CAM has what there - of spread would Steve, if would increased have you as over portion in so couple that mind, -

Stephen Yalof

a our really It's question rents. we - it's how of allocate

of on there's percentage can on volume sales offline, in sales that that numbers, we through rent day, the their they're and, the are critical and you cost. math the are and a volume pay lot there's Based to Floris know, a there's occupancy those rent you of a what a doing of part really paying us So, end us going the based lot that they math. in that's negotiation. of the perhaps go know, retailers at of But of lot - the

CAM booking, centers. our ourselves believe expense portion what managing that are operated to We we to allocate we of because and maintained pride our on happen best-in-class a shopping

how operate we So elect to that's our just business.

Floris van Dijkum

up the results. Keep Steve. Thanks,

Stephen Yalof

Floris. Thanks

Operator

of Please Instructions] Our question come the [Operator questions. from line proceed with Mueller next with Mike your JPMorgan.

Mike Mueller

going Hampshire bit two with options quick typical then you mechanisms maybe the your to One, rent that versus And talk of I what looks Fox like little the New can Thanks. I what's be today? the, ones in have reset are occupancy and portfolio woods. on outliers Hi. about second, the in, legacy lock that Michigan, that guess, here. are look signing options some a you're

Stephen Yalof

all, our first have few leases of very options. Well, of

meaningful renewing continuing we're properties. flow pure in on to out, push negotiating in from our those to when retailers. we're With that all that seeing just positively. new deals properties. other with you pointed the leasing we're leasing of regard progress So are those very about we're our all cash existing And, leases, They're those to properties scratch optimistic

Mike Mueller

you. Okay. Thank

Operator

you. Thank

your the Arft line is Please question questions. Street. Green Emily with from next proceed Our with of

Emily Arft

of lending would with sort digit what certain Hi requirements need the double for there. process is refinancing you Houston color what describe was banks respect quality looking to wondering set are could today? And there do helpful. I be if property? and yields for or Any you like

Doug McDonald

was the of a asset period to that. but Emily, were banks usual. some at providers a on bid it's it Doug. still That it's CMBS was unique than that the vintage, had were there wide of because certain given a role willing higher variety and options, That limited it where

with that were we deal. be what deem the believe role project of there off we would better refinancing One than term things that the rates, better targeting the will We though that opportunities at stabilizes higher additional is usual, terms. a as of that shorter

Stephen Yalof

Tanger, borrower. credit that's especially And use predominantly We our joint are of unsecured and an where capitals the we predominantly at cost, cost side, our ventures. term an Emily overall we advantage, loan line secured unsecured debt our and cost And with of on in feel and our in the recent decline

Emily Arft

right. in spread to current quickly kind leasing to for at? then the of where And like you All XX Can moving us does next your cadence at how pipeline. they physical today? lease And pipeline What your Thanks. looking is opening the openings remind are on the months? look then the retailers, of up

Stephen Yalof

first there's no of all, renewals, XX% Well, downtime.

in really a of much So existing downtime I absolutely where at mind. important thing renew doing rents, capital and higher of to that's we no Xwe a retailers We're we're no keep your think back when those. lose our the and lot

I going rooms our size But far until the the to the store on new ability of varies tenants, a based obviously occupied and store, minute. open as them the keep think mitigating take As those in. the time last and from occupancy very factors, up to the complexity

about a And flowing that a If keep one occupied of sure that's room the cash a lit shopping we between I our leaving strategy, little leasing center, we month space. and there's if important time. talked a is tenant as So, which during really downtime those, we're of think that temp period make have taking as that here. that's a going tenant to new we and

Emily Arft

Great. Thanks.

Operator

your we've you. the also end time conclude At today's session. you participation. for teleconference. this And our question-and-answer of Thank I reached will Thank

off your Thank now disconnect lines you. may your log computers. You and

Tanger (SKT) 4 Aug 232023 Q2 Earnings call transcript