Tanger Outlets(US:SKT)2022-08-09 16:30Financial Data and Key Metrics Changes - Core FFO per share increased by 4.7% year-over-year to $0.45 [28] - Same-center NOI for the total portfolio increased by 5.1% to $79.8 million, driven by growth in occupancy and rental rates [28] - Net debt to adjusted EBITDAre improved to 5.3x from 5.6x a year ago [29] - Cash balance as of June 30 was $194 million with full availability on a $520 million revolving credit facility [29] - The midpoint of full-year guidance for core FFO per share was increased to a range of $1.73 to $1.79, reflecting a $0.01 increase from the prior range [31] Business Line Data and Key Metrics Changes - Occupancy rate increased to 94.9%, up 170 basis points year-over-year [12] - Blended rent spreads for all comparable leases were 4.1%, representing a 280 basis point sequential improvement [12] - Retenanting spreads exceeded 10% as demand grows [12] - Nearly 68% of 2022 renewals executed or in process, 780 basis points ahead of the same time last year [14] Market Data and Key Metrics Changes - Sales per square foot for the trailing 12-month period was $450, up 6.4% from the prior comparable period [18] - Traffic remains above pre-pandemic levels, stable compared to last year [17] - Unique engagements by Tanger Loyalty Club members increased by 80% year-over-year [19] Company Strategy and Development Direction - Focus on accelerating leasing, commercializing marketing, and reshaping operations at open-air shopping destinations [11] - Continued investment in growth with new centers in Nashville and Palm Beach [11][23] - Strategic partnership to rebrand and operate an existing outlet center in Palm Beach, with potential equity ownership [24] - Commitment to sustainability with plans to achieve net zero emissions by 2050 [22] Management's Comments on Operating Environment and Future Outlook - Management expressed optimism about the business's positioning amid macroeconomic uncertainty [25] - Anticipated higher tenant retention leading to lower downtime and retenanting costs [14] - Positive trends expected in the second half of the year despite a more prudent outlook due to economic conditions [52] Other Important Information - The company is actively managing energy and water usage as part of sustainability efforts [20] - The balance sheet is well positioned with no significant debt maturities until April 2024 [29] Q&A Session Summary Question: Details on Nashville leasing and competition - Management indicated that Nashville is a competitive market but is currently about 70% committed in pre-leasing [35][36] Question: Economics of Palm Beach agreement - Management expressed excitement about the Palm Beach project but could not disclose specific economic terms [44] Question: Same-store NOI growth expectations - Management noted that the first half benefited from reserve reversals and is being prudent with second-half expectations [52] Question: Changes in tenant sales numbers - Management attributed the decrease in sales per square foot to increased promotional activity rather than a drop in foot traffic [56][58] Question: Lease structure and terms - Management reported longer lease terms and higher fixed rent bumps, with rent bumps for base rents around 3% [62][66]