NEW YORK CITY—Not selling a property can be as informative asselling it, it seems. At least that's what Tanger FactoryOutlet Centers Executive VP and CFO Frank C.Marchisello Jr. said as he discussed various avenues ofsector growth at NAREIT's REITWeek 2014.

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At Tanger's first quarter conference call, President and CEOSteve Tanger mentioned that a sale of a portfolioincluding its center in Barstow, CA, was put off when the announceddevelopment of a casino nearby created more tenant interest in theproject. There was a bit more behind the story thanthat.

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“It was somewhat of an exercise for us,” Marchisello said.Tanger had considered selling the five-center portfolio, whichconsisted of solid but second-tier projects. But in a highlyconsolidated industry (75 percent of all quality outlet centers inthe United States are owned either by Tanger or rival SimonProperty Group), who might be interested in acquiringthem?

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At the same time, Tanger had found an acquisition that it wouldfund from the proceeds of the sale. When one of those owners optednot to sell, Tanger would have generated a huge gain from its owntransaction. Combined with the new interest in Barstow, the salewas pulled despite interest from potential buyers.

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“These assets are not falling off a cliff,” but instead aregrowing solidly, Marchisello said. “We might look at it again inthe future.”

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Instead, development remains the focus, with Marchiselloanticipating one to two new Tanger developments in the UnitedStates each year. Overall, the country should see another 90 or somore projects. The company also is building one in Canada, whichshould have a total capacity for 12 or so outlets nationwide.

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“It's the controlled growth our tenants want,” Marchisellosaid.

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Imagine that.

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