TANGER INC. Q4 FY2024 earnings call

• Tanger had a strong fourth quarter with full-year performance at the top end of guidance. Full-year core FFO per share up 8.7% driven by 5.1% same center NOI increase. - Traffic grew for the quarter and year, with marketing efforts successful via on-center events and digital marketing. - Comparable sales for trailing 12 months up ~1%, total portfolio comparable sales $444 per square foot. - Focus on portfolio quality with new retailers, brands, categories. Occupancy at 98%, same center occupancy 98.2%. - Completed 473 transactions with 50% rent spreads. - Acquired The Promenade at Chenal in Little Rock and Pinecrest in Cleveland, Ohio. These acquisitions add to the portfolio and market drawing power. - Scalable platform positions Tanger for continued growth through existing and new centers, benefiting from population and employment growth in target MSAs.

Tanger delivered a strong fourth quarter with full-year performance at the top end of guidance. Full-year core FFO per share was up 8.7% from the prior year, driven by a 5.1% increase in same center NOI. Traffic grew for the quarter and year. Comparable sales for the trailing 12-month period grew year-over-year by approximately 1% and total portfolio comparable sales were up 2% to $444 per square foot. Center occupancy ended the year at 98%, up 70 basis points year-over-year and 60 basis points for the quarter. Same center occupancy was 98.2%, up 90 basis points for the year and 80 basis points for the quarter. The company completed 473 transactions across 2.1 million square feet with total rent spreads of 50%, including 38% spreads on re-tenanted space and 13% spreads on renewed space.

• Introduced 2025 core FFO per share range of $2.22 to $2.30, representing 4%-8% growth. - Expect same-center NOI growth to be in the range of 2%-4%. - G&A expected to remain at consistent levels relative to the last two years. - Interest expense estimated at $63.5M to $65.5M. - Guidance includes recent Pinecrest and Chenal acquisitions but doesn't assume additional acquisition or financing activity.

• Forward-looking statements subject to numerous risks and uncertainties. - Tenant credit issues and competition are potential risks. For example, exposure to Forever 21 stores is small relative to overall portfolio, but tenant credit watch lists remain at reasonable levels.

Q: Can you talk about capital needs for this year, given the forward, and if there's anything in the acquisition pipeline closer to the finish line?

A: On the ATM side, it's for future liquidity. Equity could be drawn if capital can be deployed. Balance sheet remains in outstanding shape with low leverage below five times.

Q: How much more of that type of product that you guys would want geographically to fit the portfolio, and should we assume that over time, incremental acquisitions as your cost of capital comes down a bit, those yields could also drift a little bit lower?

A: Look at it on a long-term basis. Current yield is a factor of purchase price NOI, but buying for future growth. There's tremendous opportunity to use platform to drive growth in assets. It's a big country, can do smart deals that make sense financially and strategically.

Q: You guys have been pretty insulated from kind of credit issues that the other open-air guys have dealt with. Could you talk about your watch list, kind of maybe on a percent of ABR or anything there, and then how much exposure within the 77 stores of Catalyst Forever 21 represents?

A: Have nine Forever 21 stores out of 77, a small amount relative to square footage. As a percentage of ABR, not a large number. Tenant credit watch list remains at reasonable levels.