Tanger Acquires NJ and MD Assets - Analyst Blog
July 19 2011 - 10:15AM
Zacks
Tanger Factory Outlet
Centers Inc. (SKT), a real estate investment trust (REIT),
has recently acquired Phase I and Phase II of Atlantic City Outlets
The Walk in Atlantic City, New Jersey, and Ocean City Factory
Outlets in Ocean City, Maryland, for a combined price of $199.3
million. The purchase price included approximately $125.8 million
paid in cash and the assumption of approximately $73.5 million of
debt associated with the properties.
Tanger expects the properties to be
accretive from the first year of its ownership. The acquisition is
part of the long-term strategy of the company to strengthen its
geographic presence in densely populated markets with a
high-quality roster of retailers. With the inclusion of the June
2011 acquisition of an outlet center in Jeffersonville, Ohio, the
company has added a total of 1.1 million square feet to its
wholly-owned portfolio in the recent past.
Spanning 491,000 square feet of
leasable space, Atlantic City Outlets The Walk is built in three
phases. While Phase I and Phase II are both 99% occupied, Phase III
is currently 80% occupied. The outlets feature designer labels and
name-brand stores of leading retailers such as Calvin Klein,
Lacoste, Old Navy, Reebok, and Tommy Hilfiger.
The Ocean City Factory Outlets
includes approximately 200,000 leasable square feet. The property
is currently 93% occupied with approximately 40 outlet stores such
as Calvin Klein, Dress Barn, and Tommy Hilfiger. The property is
located in close proximity to the 568,900 square foot Tanger Outlet
Center in Rehoboth Beach, Delaware – one of the high-volume centers
of the company. Consequently, the acquisition is expected to
provide operational synergies to benefit the company in the
long-run.
Greensboro, North Carolina-based
Tanger owns and operates a portfolio of 37 upscale outlet shopping
centers in 25 states totaling approximately 11.4 million square
feet. The properties are leased to over 2,300 retail stores that
are operated by over 390 different brand name companies.
We currently have a ‘Neutral’
rating on Tanger, which presently has a Zacks #3 Rank that
translates into a short-term ‘Hold’ rating, indicating that the
stock is expected to perform in line with the overall U.S. equity
market for the next 1–3 months. However, we have an ‘Outperform’
recommendation and a Zacks #3 Rank for General Growth
Properties Inc. (GGP), a competitor of Tanger.
GENL GRWTH PPTY (GGP): Free Stock Analysis Report
TANGER FACT OUT (SKT): Free Stock Analysis Report
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