Tanger Outlets' Strategic Expansion into the Kansas City Market: A Post-Pandemic Retail Real Estate Opportunity

The post-pandemic US mall sector is undergoing a transformation, driven by shifting consumer preferences and the rise of experiential retail. As traditional retail models face challenges, developers and investors are reimagining physical spaces to blend commerce with lifestyle experiences. Tanger Outlets' recent acquisition of Legends Outlets in Kansas City, Kansas—rebranded as Tanger Kansas City at Legends—exemplifies this strategic pivot. By analyzing the company's expansion, regional market dynamics, and broader retail trends, this article evaluates the long-term investment potential of Tanger's move within the evolving retail real estate landscape.

A Resilient Sector in a Post-Pandemic Era

The US retail sector has demonstrated surprising resilience despite macroeconomic headwinds. As of early 2025, the national retail vacancy rate stands at 4.3%, with mall-specific vacancy at 8.9%Retail Investment Benchmarks 2025: Sales, Vacancy & Rent Trends^[1]. While enclosed malls struggle with department store closures, open-air outlets and experiential retail hubs are thriving. Asking rents for retail space reached $25.56 per square foot NNN in Q1 2025, reflecting modest growth amid constrained supplyNot just the Plaza: Kansas City’s shopping malls are at an economic crossroads^[4]. This environment favors developers who can adapt to consumer demand for immersive, community-driven experiences—a niche Tanger is actively targeting.

Tanger's Kansas City Expansion: Strategic Rationale

Tanger's acquisition of Legends Outlets for $130 millionTanger Acquires Legends Outlets in Kansas City, Kansas^[2] marks a calculated entry into Kansas City, a market characterized by low vacancy rates and strong employment growth. The 690,000-square-foot property, now 93% occupied, is strategically located near major attractions like Kansas Speedway and Hollywood Casino, ensuring consistent foot trafficTanger Acquires Legends Outlets in Kansas City, Kansas^[2]. The acquisition was financed through available liquidity and a $115 million CMBS loan maturing in 2027Tanger Acquires Legends Outlets in Kansas City, Kansas^[2], a structure that balances leverage with operational flexibility.

Tanger's plan to integrate the property into its loyalty program and enhance tenant mix aligns with broader experiential retail trends. The center already features fitness centers, virtual reality setups, and pickleball courtsNot just 'power shopping': How Tanger's outlet malls are evolving beyond the discount model^[3], while the addition of full-price retailers like Sephora and Ulta BeautyNot just 'power shopping': How Tanger's outlet malls are evolving beyond the discount model^[3] signals a shift from purely transactional outlets to lifestyle destinations. This curation of brands caters to consumers seeking both value and variety, a critical factor in post-pandemic retail success.

Kansas City's Retail Market: A Magnet for Investment

The Kansas City metro area has emerged as a retail hotspot, driven by corporate investment and demographic tailwinds. Vacancy rates in North and South Johnson counties have plummeted, with East Jackson County and southwestern Clay County seeing declines of over 50 basis pointsRetail Investment Benchmarks 2025: Sales, Vacancy & Rent Trends^[1]. Employment gains, including Panasonic's De Soto EV Battery Facility, are projected to create 4,000 jobs, bolstering household income and retail demandRetail Investment Benchmarks 2025: Sales, Vacancy & Rent Trends^[1].

Moreover, Kansas City's construction pipeline remains minimal, with most new retail space pre-leased by early 2025Retail Investment Benchmarks 2025: Sales, Vacancy & Rent Trends^[1]. This scarcity of supply, coupled with above-average income growth, positions the market to sustain low vacancy rates and rent growth. Tanger's entry into this environment leverages existing demand while addressing the need for experiential offerings that differentiate outlets from traditional malls.

Experiential Retail: A Competitive Edge

The shift toward experiential retail is not merely a trend but a necessity for survival in a post-pandemic world. Tanger's Kansas City project embodies this shift by blending shopping with entertainment and social interaction. For instance, the inclusion of luxury apartments, hotels, and medical services in Tanger's broader portfolio—such as Southdale Center and Northgate Station—demonstrates a commitment to creating “live-work-play-shop” ecosystemsRetail Investment Benchmarks 2025: Sales, Vacancy & Rent Trends^[1].

This strategy resonates with Gen Z consumers, who prioritize in-person experiences despite their digital-first habitsRetail Investment Benchmarks 2025: Sales, Vacancy & Rent Trends^[1]. By offering amenities like live music venues and interactive environments, Tanger transforms outlets into destinations rather than mere shopping corridors. Such differentiation is critical in a market where competitors like the Country Club Plaza and Oak Park Mall are also reimagining their offeringsNot just the Plaza: Kansas City’s shopping malls are at an economic crossroads^[4].

Long-Term Investment Potential

Tanger's Kansas City acquisition is projected to deliver an 8% return in its first yearTanger Acquires Legends Outlets in Kansas City, Kansas^[2], with growth potential as the company enhances the property's experiential elements. The alignment with regional economic trends—low vacancy, strong employment, and rising incomes—suggests a durable investment. However, risks remain, including the high cost of capital, which has constrained new retail developmentTanger Acquires Legends Outlets in Kansas City, Kansas^[2], and the need for continuous innovation to retain consumer interest.

For investors, Tanger's disciplined approach—partnering with sponsors who prioritize transparent communication and asset performanceRetail Investment Benchmarks 2025: Sales, Vacancy & Rent Trends^[1]—offers reassurance. The company's track record of adding four outlet centers since 2022Tanger Acquires Legends Outlets in Kansas City, Kansas^[2] further underscores its operational expertise. In a sector where adaptability is key, Tanger's Kansas City expansion represents a strategic bet on the future of retail.

Conclusion

Tanger Outlets' expansion into Kansas City is a microcosm of the post-pandemic retail real estate renaissance. By combining experiential retail, strategic location, and a robust regional economy, the acquisition addresses both current consumer demands and long-term investment criteria. As the sector continues to evolve, Tanger's ability to innovate and adapt will be critical to sustaining its competitive edge—and delivering value to investors.