Tanger's Q4 2024 Earnings Call: Unpacking Contradictions in Tenant Credit, Occupancy, and Acquisition Strategies

These are the key contradictions discussed in Tanger's latest 2024Q4 earnings call, specifically including: Tenant Credit and Exposure, Occupancy Metrics, Acquisition Strategy and Market Conditions, and Lease Structure and Occupancy Metrics:



Strong Financial Performance and Growth:
- Tanger Inc. reported full-year core FFO per share up 8.7% from the prior year, driven by a 5.1% increase in same center NOI.
- This growth was supported by increased traffic, improved comparable sales, new retailer additions, and strategic external growth.

External Growth and Acquisitions:
- Tanger added five centers to its portfolio over two years, contributing approximately 2.2 million square feet of GLA and $50 million of first-year NOI.
- The acquisitions of The Promenade at Chenal and Pinecrest in Little Rock and Cleveland indicate Tanger's strategy to acquire high-quality open-air lifestyle centers.

Retailer Demand and Leasing:
- Same center occupancy reached 98%, with same center occupancy at 98.2%, showing strong demand for space.
- The company achieved positive rent spreads for 12 consecutive quarters, with rent spreads averaging 50% on re-tenanted space and 13% on renewed space.

Balance Sheet and Financial Strategy:
- Tanger is maintaining a low leverage balance sheet, with a net debt-to-EBITDA ratio of between 4.9 and 5 times.
- The company has executed strategic external growth through acquisitions, financed by cash on hand and available liquidity, while maintaining its stock repurchase program.