Strong Rents Drive Tanger

"The Tanger team successfully executed our growth strategy in 2004," Stanley K. Tanger, Chairman of the Board and Chief Executive Officer, told investors in a conference call yesterday from the company's Greenboro, NC headquarters.

But not everything was good news. Weather, notably a series of hurricanes in September that severely damaged several Tanger shopping outlets in the east and along the Gulf Coast caused tenant sales to drop 11% in those areas during October. Same-store sales outside of those regions, however, showed a 2.9% increase for the year while overall store sales for same-space tenants grew 3.2 percent during the same period.

Strong occupancy levels and an uptick in rents helped drive the company's success. By year's end, the firm's portfolio showed an occupancy rate of 97%, representing the 24th consecutive year since Tanger's founding in 1981 that it achieved a year-end occupancy rate above 95%. That level was accomplished through the signing of 471 new or renewed leases totaling 2 million sf. More than 87% of those leases were signed with existing tenants. Per sf base revenue also increased 5.5% with the average base rent for new stores opened during 2004 averaging $17.99 per-sf, a figure 12% higher than the $16.05 per-sf rent charged for stores that closed during the year.

Growth also helped drive the company's fortunes. Tanger added about 3.3 million sf to its holding with the successful integration of the nine-center Charter Oaks portfolio, acquired for $491 million through a joint venture with Blackstone Real Estate Advisors in December 2003.

The company also continued its push to develop and lease four sites in Pittsburgh, PA; Deer Park, NY; Charleston, SC and Wisconsin Dells, WI with completion of those projects expected within the next two years. The firm's divesture of three non-core assets and five land parcels during 2004 netted the company $20.4 million, while overall expenses declined for the year from 8.1% to 6.6% of total revenues.

For shareholders, that was all good news. Common stock shareholders, who yesterday saw the company's Board of Director's approve a two-for-one stock split, also saw dividends increase 3.2% from $1.25 to $1.29 per share.