By Kris Hudson - The Wall Street Journal
Tanger Factory Outlet Centers Inc. is buying new three centers as it moves to stay ahead of rivals that are developing new projects.
Tanger, owner of 34 U.S. outlet centers, disclosed in its quarterly report filed with the Securities and Exchange Commission this week that it has contracted to buy three outlet centers for nearly $400 million in total.Tanger, based in Greensboro, N.C., will pay $125 million in cash and assume $75 million in debt for the Walk outlets in Atlantic City, N.J., and another center in Ocean City, Md. The seller is closely held Cordish Cos.
In addition, Tanger will acquire the Prime Outlets Jeffersonville in Ohio from Simon Property Group Inc., which had to divest one of its outlet centers in that market due to terms the Federal Trade Commission imposed on its acquisition last year of the Prime Outlets chain. The deals on the three malls are expected to close within 60 to 90 days.
Tanger’s expansion comes as rival mall owners CBL & Associates Properties Inc., Taubman Centers Inc. and Macerich Co. have started construction on outlet-center projects or added partners with the intent of doing so. Now, Tanger “is on the verge of expanding its asset base by 12%,” Green Street Advisors analyst Cedrik Lachance wrote in a research report this week. “With its shares trading at a sizeable premium to (net asset value), a buying spree should create value for shareholders.”
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