Tanger Factory Outlet Centers
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Tanger Factory Outlet Centers, Inc. is an unusual real estate investment trust in that it's not just the owner/developer/manager of property, it's the retail name for its factory outlet centers. Most REITs simply own the properties, but lease them to the brand names. Tanger Factory Outlet (NYSE: SKT) has been a publicly owned REIT since May 28, 1993. Their headquarters are in Greensboro, North Carolina. They are self-administered and self-managed.
Tanger is a leading developer and manager of factory outlet shopping centers, which are known as a Tanger Outlet Center. They currently have 33 centers in 22 states, with 10.2 million square feet. Their centers contain a mix of tenants of leading designer and brand-name manufacturers. They have 2000 tenants and 400 store brands.
Tanger Factory Outlet Centers has around 400 employees. They were the first outlet center developer REIT listed on the New York Stock Exchange. About six others followed, but didn't survive.
Tanger Factory Outlet Centers Did Not Begin as a REIT
Tanger began in 1981 with Stanley K. Tanger, and his first outlet center was built in Burlington NC, formerly the burlington Manufacturer's Outlet Center. It had just 35,000 square feet, but they grew it to over 300,000 square feet in just three years. However, Tanger Outlet no longer owns it.
His son Steven joined in 1986. By the time of their IPO in June 1993, they had 17 outlet centers.
They do have a Dividend ReInvestment Plan (DRIP). They even have their own frequent shopper plan, the Tanger Club. The brands they sell include Abercrombie and Fitch, Adidas, All About Dogs, Harley-Davidson, Izod, Jamba Juice, Rockport, Rocky Mountain Chocolate Factory, Royal Doulton, Ruby Tuesday, and Share the Joy.
Tanger Factory Outlet Must Avoid Competing Against Retail Outlets Selling the Same Brands
Their locations include Branson Missouri, Barstow California, Deer Park New York, Kittery Maine, Locust Grove Georgia, Hilton Head South Carolina, Blowing Rock North Carolina, Foley Alabama, Lincoln City Oregon, and San Marcos Texas.
You can see from the above list that their strategy is to place their centers in areas that are NOT major metropolitan centers. So their traffic must come from people from many miles around or tourists (at least in the case of Branson). This encourages the participation of major brand names, who are therefore not damaging their retail outlets in big shopping centers in big cities.
They locate their centers at least ten miles from a major metropolitan center. They also locate them in places than attract domestic tourists, because people like to shop when they go on vacation. However, they don't try to compete for international tourists because of exchange rate fluctuations.
Their centers serve markets with at least one million in population and an average annual household income of $65,000.
Their largest property is in Riverhead New York, with 729,315 square feet outside of New York City. Their largest tenants include: The Gap, Phillips-Van Heusen, Nike, Liz Claiborne and Polo Ralph Lauren.
People want to save money in good times and really want to save money in bad times, so Tanger Factory Outlet REIT is a good way to hedge investment in the United States consumer economy, plus it offers the safety of wide diversification.
Tanger Factory Outlet Centers is Still Financially Strong
They're opening their latest factory outlet center, a $60 million project designed like a historic southern town, in the same state where they began three decades ago -- North Carolina (Mebane). It's 317,000 square feet. And it's one of only two new outlet centers expected to open in the United States in 2010.
Steven B. Tanger, son of the founder, is now President and CEO, effective early 2009. His father retired from the role of chairman and CEO, but remains as a director.
They are the second largest outlet center in the country, behind only Simon Property Group, which controls around half the entire factory outlet market.
Tanger Factory Outlet Centers is a strong company in a business that is recession resilient. People can't buy as much in economic hard times, but they'll abandon the expensive retail outlets for the bargain prices from such companies as this Real Estate Investment Trust.
Next: Weingarten Realty -- large REIT of neighborhood shopping centers
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