Tanger Inc Surges Ahead with Record-Breaking Leasing Activity and 11% Core FFO Growth
Tanger Inc has kicked off the year on a high note, showcasing remarkable resilience and growth across its leasing, operating, and marketing platforms. As reported during its first-quarter conference call, the company's performance far exceeded expectations, solidifying its position as a leading player in the retail industry.
The quarterly financial results were nothing short of impressive, with Core FFO (Fund From Operations) clocking an 11% year-over-year increase to $0.59 per share. Occupancy rates reached a staggering 97%, up 120 basis points from the same period last year. Sales productivity surged to $482 per square foot on a trailing 12-month basis, and occupancy cost recovery (OCR) remained stable at 9.7%.
At the heart of Tanger's success lies its integrated leasing and marketing strategies, backed by disciplined operating, asset management, and financial approaches. This cohesive approach has driven sales, traffic, net operating income (NOI), and long-term value for stakeholders. The company's commitment to center merchandising, replacing underperforming retailers with more productive ones, has created a flywheel effect that continues to drive growth.
Leasing activity was another significant highlight, with Tanger executing 651 leases totaling 3.4 million sq ft over the past 12 months – a record-breaking production for the company. The average rent spread of 10.5% reflects ongoing strength, with retenanting spreads exceeding 26%. This favorable supply and demand dynamic is expected to persist due to limited new retail development and consolidation in the department store business.
The company's focus on delivering elevated retail experiences through a steady pipeline of new brands, better food and beverage options, and entertainment has improved center utility and driven increased sales productivity. Occupancy rates saw a meaningful year-over-year increase in Q1, with closures handled strategically through permanent backfill deals already in the pipeline and strategic temporary programs bridging select spaces until long-term deals are successfully executed.
Tanger's marketing platform continues to serve as a key differentiator, delivering more value to shoppers through broadened channels and its proprietary loyalty program. The company's commitment to community engagement has led to over 200 on-center events and activations in the first quarter alone, further enhancing customer experience, visit frequency, and dwell time.
In April, Tanger announced a 7% increase in its dividend, supported by earnings growth and conservative payout ratios. This decision reinforces the company's focus on delivering value to stakeholders while maintaining a strong financial foundation.
