Tanger Outlets(US:SKT)2023-04-28 16:12Financial Data and Key Metrics Changes - The company reported Core FFO of $0.46 per share, an increase from $0.45 in the prior year period [13] - Same center NOI for the total portfolio increased by 7.4% for the quarter, reflecting strong operational performance [13][34] - The weighted average rate on the company's debt at quarter end was 3.5%, with 93% of the debt at fixed rates [15] Business Line Data and Key Metrics Changes - Same center NOI growth was driven by robust leasing activity and effective expense management [7] - The blended average rental rates increased by 13.8% for the trailing 12 months ending March 31, 2023, marking a significant improvement from the previous year [8] - Renewals executed or in process represented 57% of leases expiring this year, approximately 10 percentage points ahead of last year [9] Market Data and Key Metrics Changes - Traffic for the quarter was up 60 basis points compared to the prior year's first quarter, indicating positive momentum [9] - Total gross sales grew in the first quarter of 2023 from the prior year quarter, with average tenant sales improving to $447 per square foot [30] Company Strategy and Development Direction - The company is focused on diversifying its tenant portfolio, adding experiential and food and beverage retailers to enhance customer engagement [40][32] - The Nashville development is over 90% lease committed, with a grand opening anticipated in the fall [12] - The company aims to leverage its media platform for additional revenue opportunities, enhancing marketing efforts to drive traffic and sales [11][10] Management's Comments on Operating Environment and Future Outlook - Management expressed confidence in the company's optimistic outlook, citing strong leasing activity and improved rent spreads [27][28] - The company anticipates deploying between $50 million and $60 million for recurring CapEx across its portfolio, with a focus on tenant allowances and capital improvements [16] - Management noted that the leasing strategy is focused on capturing higher base rents and expense reimbursements, with a strong emphasis on operational efficiency [45] Other Important Information - The company announced an 11.4% increase in its dividend, reflecting continued confidence in its financial performance [33] - The company has no significant debt maturities until 2026, providing flexibility for growth initiatives [14] Q&A Session Summary Question: Inquiry about new tenants and their impact on visits - Management noted that the addition of new food and beverage tenants has positively impacted customer visits and stay time at shopping centers [19][40] Question: Concerns about leasing demand moderation - Management confirmed that there has not been a slowdown in leasing velocity, with retailers optimizing outlet locations as a key strategy [44] Question: Clarification on expense reimbursement rates - Management explained that the first quarter benefited from lower operating expenses and a strong leasing strategy, but recovery rates may adjust throughout the year [45][46] Question: Update on occupancy growth and temporary tenants - Management indicated that temporary occupancy is around 10%, which is higher than historical averages, and they are focused on converting temporary tenants to permanent leases [51][52] Question: Discussion on lease maturities and renewal pace - Management highlighted that 57% of leases expiring this year are in the renewal process, which is a significant improvement from the previous year [57] Question: Insights on external growth opportunities - Management is actively exploring joint ventures and acquisition opportunities to enhance their portfolio and drive growth [77] Question: Update on Rue21's restructuring - Management stated that Rue21 is current on all rents and the relationship remains strong, indicating confidence in addressing any potential issues [90]