Steven B. Tanger, President and CEO, and James Williams, SVP and Controller are presenting for Tanger Outlet Centers at NAREIT’s REIT Week.

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Below are notes from the session:

9:30: Tanger starts off recapping details of a new line of credit that the firm announced yesterday.

9:33: Tanger: Growth strategy includes not only organic growth … but also ground-up developments in the United States and Canada. … (Tanger also recaps the firm’s recent development announcements, including its JV with Peterson Cos. for a project in National Harbor and its joint venture with RioCan REIT to build outlet centers throughout Canada.) … Tanger is pursuing acquisitions. It has entered agreements to purchases three outlets on deals it expects to close in the third quarter. Overall, it has transactions in the works worth $490 million that would expand its portfolio by about 2 million square feet. These deals are not yet finalized, however. (Tanger also runs through updates

9:42: Tanger: On new deals we target 10 to 12 percent cost of occupancy. When leases come for renewal–and you can see large spreads of 49 percent in first quarter–that’s our mark-to-market. We are able to bring in new tenants at market rents.

9:45: Tanger: Outlets are now a distribution channel for virtually every one of brand name manufacturers and retailers we work with. … We work with tenant partners to understand their long-term view. I’m interested in their three-to-five year strategic plan. .. Their plan is to grow outlet distribution along with … regular retail stores. The business model is simple and elegant for our industry. It is brand names sold directly to consumers. It cuts out the middle man and the consumer gets a great deal every day. … If five years ago there were going to open 10 stores, they may have opened three outlets and seven full price. Now they are talking about seven outlets and three full price. … IN our market, we are under-retailed. It’s probably the only sector that is under-retailed. … Our centers at the end of the first quarter were 97 percent occupied. … There is demand for new space. … The tenant partners we’ve worked with are happy to work with us and the one or two other specialists who know how to own and operate an outlet center, which is a different kind of skill than other centers.

9:52: Tanger: I can only worry about what our plans are. It’s relatively easy for someone to announce an outlet center. … If you are to go a year from now or two years ago and look, you’ll see maybe 5 percent to 10 percent of those actually built. … It’s a very specific industry with specific skill sets and with tenants that are major corporations. We are not dealing with mom & pops and entrepreneurs. We’re dealing with NYSE-traded retailers—the largest corporations in the world. … It’s much more difficult to build than it is to announce.

9:55: Tanger: (When asked about the potential for redevelopment.) We’re contrarian. In the time of 2005 to 2007, when everybody was building on speculation and money was cheap and they were leveraging, we did not. We could not make the returns we wanted. We put $60 million into portfolio with capital improvements, renovation and redevelopment. … We’ve already made that investment. We don’t have to do that again. … We have no plans to do a take down or major renovation. Our portfolio looks great. We’re way ahead of everyone.

10:00: Tanger: 2012 is an election year. All bets are off. Interest rates—because of the election—will stay stable and fairly low. I’m hoping people will go back to work and Congress will not overregulate and strangle the growth that’s going on now. We certainly feel that the markets will remain strong. There is virtually no new construction in our industry. The outlet center industry only has 150 quality outlet centers with 50 million square feet. … Compare that with 176 million square feet of total retail in Chicago market alone. … There is room for growth. … We’re all excited about the future. We’re a growth company. … We feel these are non-replaceable, world-class assets that—would they come to market—there would be a feeding frenzy.

Session ends.

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