Brand name bargains are on shoppers' lists when they visit Tanger Factory Outlet Centers. One of the top outlet mall developers (along with retail giant Simon Property and its Chelsea Property Group subsidiary), Tanger is a real estate investment trust (REIT) that develops, owns, and manages about 40 retail outlet centers in 25 states and Canada. A typical center has 75 stores and totals at least 300,000 sq. ft., housing shops from more than 435 brand name companies, including The Gap, Ralph Lauren, Ann Taylor, and Nike. Tanger's outlet centers, which maintain about 99% occupancy, are built away from malls and shopping districts, so tenants don't compete with their full-price stores.
Revenues increased by 14% in 2011 and net income skyrocketed 30%. Tanger Factory Outlet Centers has been expanding even during the economic downturn. Actually, the outlet industry thrived during the recession as shoppers searched for good deals.
Tanger Factory Outlet Centers has been aggressively marketing to higher volume tenants, replacing low-profile stores with the flash and appeal of trendier name brands. Attracting stronger, more popular apparel, footwear, and housewares brands allows Tanger to renew leases at higher base rents.
The REIT also continues to seek opportunities for new development or acquisition of shopping centers. In particular, the company targets markets that have at least 1 million residents and are located near high-traffic interstate highways.
Tanger acquired four existing outlet centers in Ohio, New Jersey, Pennsylvania, and Toronto in 2011, expanding its footprint by 15%. The company also completed the redevelopment one of its centers in South Carolina. Two new centers in Texas and Arizona were slated to open in 2012. Other centers in Arizona, the Washington, DC metro area, and Canada are being developed.
Tanger expanded into Canada in 2011 by forming an approximately $1 billion joint venture with RioCan Real Estate Investment Trust to develop outlet malls there under the Tanger Outlet Centers brand. RioCan will perform property development and management services, while Tanger will provide marketing and leasing services. Each firm owns half of the venture.
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