Tanger Reports First Quarter 2011 Results

GREENSBORO, N.C., April 26, 2011 (GLOBE NEWSWIRE) -- Tanger Factory Outlet Centers, Inc.(NYSE:SKT) today reported funds from operations ("FFO") available to common shareholders, a widely accepted supplemental measure of REIT performance, for the three months ended March 31, 2011 was $29.6 million, or $0.32 per share, as compared to FFO of $29.0 million, or $0.31 per share, for the three months ended March 31, 2010.

Steven B. Tanger, President and Chief Executive Officer, commented, "The first quarter was quite robust, as our industry continues to grow. This year is off to a strong start with healthy renewals and retenanting of space, as evidenced by the strong percentage gains posted in this quarter. Tanger's expansion into the Canadian marketplace, with joint venture partner RioCan, continues with the announcement of an initial development site in the Greater Toronto Area in Halton Hills. We have also signed definitive agreements on the potential acquisition of a number of existing outlet centers. In doing so, we have invested close to $600,000 on acquisition related expenses during the first quarter of 2011. FFO per share, as adjusted for such costs, came in at the high end of our internal forecast and met consensus estimates."

National Portfolio Drives Operating Results

During the first quarter of 2011, Tanger executed 276 leases, totaling 1,268,000 square feet throughout its wholly-owned portfolio generating an average increase in base rental rates of 25.3%, compared to 210 leases and 874,000 square feet during the first quarter of 2010 generating an average increase in base rental rates of 13.2%. Lease renewals during the first quarter of 2011 accounted for 932,000 square feet and generated a 16.0% increase in average base rental rates, compared to 646,000 square feet and an 8.8% average increase in average base rental rates last year. Renewal activity during the first quarter represented 54.7% of the square feet originally scheduled to expire during 2011, while renewal activity during the first quarter of last year represented 43.5% of the square feet originally scheduled to expire during 2010.

Average base rental increases on re-tenanted space during the first quarter averaged 49.9%, compared to 22.5% last year. Retenanting during the first quarter accounted for 336,000 square feet in 2011 and 228,000 square feet during 2010.

Same center net operating income increased 6.0% for the first quarter of 2011, compared to a 0.7% increase last year. Reported tenant comparable sales for our wholly owned properties for the rolling twelve months ended March 31, 2011 increased 5.9% to $359 per square foot. Tenant comparable sales for the three months ended March 31, 2011 increased 4.8%.

Investment Activities Provide Potential Future Growth

The redevelopment of the company's Hilton Head I center was completed on time and the center re-opened on March 31, 2011. The center and its sister center, Tanger Hilton Head II, are located off I-95 at South Carolina Exit 8 on Highway 278 in the Hilton Head Resort Area. Tanger I, a LEED® Certified property, includes 177,000 square feet of outlet space featuring an array of more than 40 popular outlet names such as Adidas, BCBG, Brooks Brothers Factory Store, Donna Karan, J. Crew, Joe's Jeans, Kenneth Cole, New Balance, Saks Fifth Avenue OFF 5TH, Talbots, Theory, Under Armour and many more. Currently, the center has leases signed or out for signature on 94.3% of the leasable square feet. In addition, the property features four pad sites, three of which are leased to Panera Bread, Longhorn Steakhouse, and Olive Garden.

On March 10, 2011, retail real estate veteran Tony Grossi was hired as Senior Managing Director to lead the company's exclusive joint venture with RioCan Real Estate Investment Trust for the development of Tanger Outlet Centers in Canada. On March 14, 2011, the joint venture announced its first development site, in the northwestern quadrant of the Greater Toronto Area in Halton Hills, on Highway 401 at the James Snow Parkway interchange. The project, the first of 10 to 15 that the joint venture intends to develop over the next five to seven years, is scheduled to start in the fourth quarter of 2011 and be ready for an April 2013 opening.

Preleasing activities continue on the previously announced developments in the Houston, Scottsdale, and West Phoenix markets. It is anticipated that groundbreaking ceremonies will take place shortly after Tanger achieves the minimum pre-leasing Phase I thresholds of at least 50%, with grand opening activities taking place approximately one year after the start of construction.

Additionally, Tanger is negotiating with various owners for the potential acquisition of a number of existing outlet centers. While the company has negotiated and signed a number of contracts on these potential acquisitions, Tanger is in the midst of its due diligence work and as such is subject to various confidentiality provisions.  The company expects to make a definitive announcement regarding one or more of the potential acquisitions should it satisfactorily complete its due diligence work.

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