Tanger Outlets Traffic Higher Than In 2019, But Leases Slow To Renew

Traffic has been higher at Tanger Factory Outlet Centers locations than in 2019, but only about 50 percent of the leases set to expire this year have been renewed across the company’s upscale open-air outlet centers, company officials said during its three- and six-month earnings call.

“Our efforts to engage the consumer by curating a more upscale mix of brands, creating a sense of place and crafting opportunities for more personalized, end-to-end, experiential outings are beginning to bear fruit,” said Tanger Outlets President and CEO Stephen Yalof.

With traffic to the open-air shopping centers above that of two years ago, Yalof said tenants have seen trailing 12-month sales of $424 per square foot, a 7 percent increase over 2019.

The company’s occupancy rate was 93 percent at the end of June, compared to 91.7 percent on March 31 and 93.8 percent on June 30, 2020.

As of the end of the second quarter, Tanger had lease renewals for 53.8 percent set to expire in 2021, compared to 67.5 percent the previous year. Yalof said the company will “take an intentional approach to leasing, making the right deals today that will create value for all of our stakeholders tomorrow,” said Yalof. The company saw higher variable rents in the first half of the year, he said.

Lease termination fees totaled $800,000 for the first half of 2021, including $127,000 for the second quarter of 2021, compared to $1.7 million for the first half of 2020, including $1.5 million for the second quarter of 2020.

Mall operator Simon Property Group has also seen traffic rebound at its properties in recent months. According to location analytics company Placer.ai, foot traffic at Simon Property’s locations was up about 60 percent year over year in July, but down slightly compared to 2019.

Related: Simon Property CEO Says ‘The Mall Is Safe’ Amid Rising Concerns Over Delta Variant

Simon Property CEO David Simon said earlier this week that he feels malls have been maligned during the pandemic, asserting that “the mall is safe” even as COVID-19 cases rise across the U.S.

“Where we need to mask up, we’re going to mask up,” he said, but it’s likely that consumers are “just going to deal with Delta.” Simon said he’s hopeful that lockdowns aren’t mandated as the situation progresses. “Let us do our business,” he said.