Q4 2019 Earnings Call
Good morning, just the Cyndi Holt, Vice President of Investor Relations and I would like to welcome you to the tanker factory outlet Center here in 2019 conference call. This morning, we issued our earnings release as well as our supplemental information package and Investor presentation. This information is available on our Investor Relations website investors Dot Tanger outlets.
Dotcom. Please note that during this conference call seventh management's comments will be forward looking statements that are subject to numerous risks and uncertainties actual results could differ materially from those forget it.
We direct you to our filings with the Securities Exchange Commission for a detailed discussion of these risks and uncertainties.
During the call. We will also discuss non-GAAP financial measures as defined by FCC regulation G, including funds from operations or adjusted funds from operations or any of that those same center net operating income and portfolio net operating income reconciliations of these non-GAAP measures to the most directly comp.
From a GAAP financial measures are included in our earnings release and in our supplemental information.
This call is being rebroadcast.
For a period of time in the future as such it is important to note. It management's comments include time sensitive information that may only be accurate as of today's date January 27020. At this time all participants are in listen only mode. Following management's prepared comments the call will be opened for your question.
We request that everyone has only one question and one follow up to allow as many of you as possible to ask questions. If time permits we are happy for you to receive for additional question.
On the call today would be Stephen Tanger, Chief Executive Officer, and Jim Williams, Executive Vice President and Chief Financial Officer, I'll now turn the call ever to Steven Tanger. Please go ahead.
Good morning, and thank you for join Us.
All right good answer the discussion of our 2019 results.
Fourth quarter performance and outlook for this year I want to address the timing of earnings call this quarter.
This past Friday after the market closed.
S&P announced that our shares are being removed from its S&P high yield dividend aristocrats index.
The primary promise of this index is long term consecutive dividend growth.
We're extremely proud to have increased our dividend for 27 consecutive years. However, as of their measurement date of December 31st our market cap was below their threshold at $1.5 billion. Consequently, we will be deleted from.
The index prior to the open on Monday February Threerd.
Since there may be Hasan trading volume in our shares with funds, which track that index, we want to Expediently provide the market with our 2019 results and our outlook for 2020.
Now turning to our results.
We delivered solid performance in the fourth quarter capping a year, where we exceeded our guidance.
With strong leasing execution.
We ended we ended the year with consolidated portfolio occupancy of 97% contributing to better than expected same center net operating income.
I'm, particularly proud of our leasing team who succeeded in accomplishing.
One of our key strategic goals of keeping our centers highly occupied with desirable tenants.
In 2019, we faced similar industry headwinds that many peers experienced particularly related to several bankruptcies and brand wide restructurings, which resulted in tanker recapturing 100, a 98000 square feet during the year.
Even with this level of space coming back to US we ended the year with consolidated portfolio occupancy up.
110 basis points sequentially, and up 20 basis points year over year.
The success of our leasing team has been able to deliver support.
Supports our ongoing confidence in our business and the compelling offer that tanger centers provide those shoppers and tenants.
Well the retail model continues to evolve.
Retailers are increasingly discovering the brick and mortar stores are a critical element of successful omnichannel distribution strategies.
The combination of online and physical stores produces a halo effect that often results in much higher dwell time and spend both channels.
Driving additional sales of brand in connection with consumers, our priority goals for retailers and physical locations help achieve them.
As a result, we're seeing increased interest in outlets space from brands that had previously focused solely on online distribution.
Brandname retailers remain committed to the outlet distribution channel and continue to benefit from our value proposition, including our low cost of occupancy which remains about 10%.
Many of our high quality core tenets are expanding and adding stores.
We are focused on further diversifying our tenant base our tenant base included adding new tenants to Tanger centers, such as home decor, and furniture stores popular off price stores and various vibrant restaurant concepts.
Our business development efforts continue to gain traction and generate interest from new and existing permanent tenants as well as pop up and temporary stores testing the outlet strategy that has the potential to become long term tense.
As a result of our highly focused leasing efforts and enhanced marketing programs our centers enjoy favorable traffic in the fourth quarter and for the full year.
Up 50, and 100 basis points, respectively. As shoppers continued are frequent tanger centers.
As I mentioned earlier.
We entered the entered the year.
We ended the year, 97% leased which is the 30 eightth consecutive year, we have exceeded 95% at year end.
This demonstrates our strong retailer relationships and they have to yield over the tanker Brad.
You consider the amount of space recaptured during 2019 this achievement as a testament to our unwavering commitment to drive our business.
For the trailing 12 months ended December 31 average tenant sales for the consolidated portfolio were $395 per square foot up 3% from the prior year.
On an intro I weighted basis, they were $429 per square foot up 4%.
Same center tenant sales performance increased by 1.5%.
Same center NOI declined by 40 basis points for the fourth quarter, and 70 basis points for the year compared to the prior year periods, while significantly better than our guidance. These results reflect the challenges we faced last year and which we will continue.
Due to face in 2020.
For the trailing 12 months.
337 leases commenced.
Totally approximately 1.5 million square feet.
Our blended average rental rates increased 2.7% on a straight line basis, and 1.3% less on a cash basis for all leases that commenced in 2019.
Looking ahead.
As we progressed through 2020.
We anticipate increased pressure on spreads as we continue to make maintaining high occupancy of priority.
As discussed last quarter.
We have already recaptured 303000 square feet in January related to all of the Dressbarn and kitchen collection stores and certain of the destination maternity and forever 21 stores, many of which we're paying rents per square foot above our portfolio average.
The known impact is about 350 basis points on our 2020 same center NOI with what while some of these situations remain fluid.
Another key strategic focus is our marketing and customer engagement effort.
Which continues to drive traffic to our centers.
We concentrated our marketing initiatives early in the season based on a shorter selling period between Thanksgiving and Christmas in order to get shoppers to the centers when the product assortment and inventory were highest.
We have also focused on creating experiences and highlighting the social element of shopping.
To that point, we're investing in both temporary and long term experience additional events at our centers, which gives shoppers and additional reason to come to our centers and encourage them to extend that each visit.
In 2019, we hosted more than 300 events.
Which includes some experiences as family festivals block party celebrations winds Sip and shops, how Halloween costume contests holiday tree lightings and much more.
Overall, the events resulted in an average increase in comparable traffic over event time periods of more than 2%.
These events have proven to draw shoppers and we'll continue to be an important component of our marketing strategy in 2020.
We have also continued to develop new digital online marketing programs designed to target and engage our various customer segments with a more personalized approach.
We know our Tanger club shoppers are highly engaged and we make it a priority to grow membership in this key segment in 2019.
Our efforts resulted in having approximately 21% more Tanger club members at the end of 2019 compared to the end of the prior year.
In 2020, we will continue to focus.
Marketing of this innovation and technology.
Through improved data resources, we are better understanding our shoppers, providing more personalization of more effectively driving visits in sales conversion.
Targeting the right people with the rate brand name value, we're drawing new and existing shoppers achieving engagement and gaming loyalty.
These are all areas, where we have a successful track record and we have and we now have the opportunity to refine and enhance our efforts to see ever improving results.
While we remain encouraged by the success of both our leasing and marketing initiatives, we're cognizant of the headwinds we're facing.
In addition to known retail departures I've discussed.
We anticipate there could be additional space coming back later this year.
Given this backdrop, we will be as aggressive in 2020 as we were in 2019 with the intent to achieve leasing success and overcome the known and unknown vacancies, including continue to target a mix of new and existing permanent tenants as well as well as pop up in Tempur.
Three stores.
We're seeing interesting opportunities to upgrade to diversify our tenant mix.
Sell or at least some outparcels to hotel food and multifamily users and to add additional high volume non traditional tenants to our retail offerings.
Well, releasing the recapture space will take time, our teams are working diligently across the company and we look forward to providing updates as the year progresses.
While lenders and out while understandable with the retail challenges of today's world. The company's share price decline is disappointing to all of us a tanker, especially given the stability of our balance sheet, our strong annual free cash flow, our high occupancy and the increase.
This is in both traffic and sales the outlet distribution channel remains a highly a relatively inexpensive an important part of many retailers sales efforts. Despite the well publicized listed store closures were continuing to see continuing to.
Please vacancies to both new and existing tenants.
Our initial preleasing the success that Nashville, Tennessee.
Shows there is a strong demand for well conceived outlet projects in good markets pre leasing is meeting our expectations and on schedule.
We are continuing a thorough search process to identify our new president and Chief operating officer.
As expected the process to find the right person to help effectively navigate this ever changing retail landscape is taking time.
We're not we are more focused on finding the right person than I am getting someone in quickly.
We will be happy to update you at the appropriate time.
Finally, our board of directors has improved a one cents per share or 70 basis point increase in our annualized dividend to $1.43 cents per share.
Since becoming a public company in May 1993.
The company has paid a cash dividend each quarter and has increased our dividend each year.
Putting us among a very small group of equity reads to have achieved such a milestone. We're all very proud of this record.
I'd like to again, thank the Tanger team for their hard work dedication and creativity and navigating the evolving retail landscape.
Our outperformance last year is a direct result of their efforts.
As we move into 2020 I'm confident our team will continue to demonstrate these qualities with that I'd like to now turn the call over to Jim to take you through our financial results provide a brief balance sheet recap and some details regarding our 2020.
Guidance.
Thank you Steve.
Fourth quarter.
Available to common shareholders was 59 cents per share compared to 64 cents per share in the fourth quarter of 2018.
Current year period includes a four cents per share dilutive impact from four assets, which were sold in March of 2019.
For the full year 2019, a FFO was $2.31 per share compared to $2.48 in the prior year.
Full year results include an 11 cents per share dilutive impact of the sold assets.
And the fourth quarter for the consolidated portfolio same center NOI decreased 40 basis points compared to the prior year quarter.
Driven primarily by tenant bankruptcies lease modifications and store closures and for the full year same center NOI was down 70 basis points.
These results exceeded our guidance, primarily due to outperformance in our leasing efforts along with higher percentage rents from increased sales and lower expenses as a result of a mild winter season.
We continue to maintain our strong financial position.
We have no significant debt maturities and our consolidated portfolio until December 2023, and a low 3.5% weighted average interest rate.
As of December 30, Onest, approximately 94% of the square footage in our consolidated portfolio was not encumbered by mortgages.
Our unsecured lines of credit, we're undrawn with $600 million of capacity.
We maintained a substantial interest coverage ratio for the year of 4.3 times and net consolidated debt to EBITDA was approximately 5.7 times for the trailing 12 months.
Our floating rate exposure represented less than 1% of total outstanding debt at the average term the maturity, including extension options was 5.5 years.
In 2019, we reduced our outstanding consolidated debt by $143 million.
The strength of our balance sheet provides us with stability and flexibility and we continue to generate significant free cash flow after payment of our dividend.
At this time, we plan to utilize our cash on hand, and internally generated free cash flow to reinvest in our assets raised our dividend and fund our new development in Nashville later this year in 2020, we'll remain disciplined and on capital allocation strategy.
Let me now provide some perspective on our center and Jeffersonville, Ohio, where we took a noncash impairment.
Despite efforts to proactively Remerchandised center and has continued to be impacted by unexpected store closures from bankruptcy filings or brand led restructurings, including additional anticipated vacancies in 2020.
Based on our current outlook for the center, we anticipate that it will be challenging to recover these vacancies.
Therefore, we wrote the asset down to its estimated current fair value.
In terms of our outlook for 2020, we estimate that FFO per share will be between $1.96 and $2.04.
Relief, we issued this morning and claims are key guidance assumptions and a bridge the 2019 FFO results.
As Steve mentioned earlier approximately half of our expected same center NOI decline at the midpoint as related to the situations, where we have already recaptured the space.
Our assumption for the remaining potential closures as primarily related to a few unresolved situations that we are unable to discuss at this point.
We expect that Jeffersonville, where we recorded a significant impairment or we do same center NOI by approximately 70 basis points.
Lease termination fees will depend on says I'll specific tenant outcomes and we do not incorporate sippican assumptions into our guidance until we have reached agreements with tenants.
We are proud of our accomplishments in 2019 and our team is committed to continuing to work and outperform again this year.
I'd now like to open it up for questions. Operator can we take our first question.
Ladies and gentlemen, if I remain current Kiki with Blake to ask a question probably crestar they've been number one on your telephone keypad.
I want to ask your questions kindly press star good the number one on your Telecom Keetac. Your first question comes from the line Christy Mcelroy with Citigroup.
Question.
Hi, good morning, everyone. Thank you.
I'm wondering if you could shed some light on any conversations you may have hybrid state Street on how they plan to effectuate their share sale. This week.
Well I recognize it's not in guidance is a buyback.
And to help facilitate that trade.
Good morning Christie.
Thanks for getting up so early.
You're welcome.
First of all we cooperate with all of our our large shareholders.
And get appropriate representations to ensure that we maintain or read status.
We have looked at with our advisors many different.
Scenarios and opportunities with regard to.
The position that state Street and right now we've decided just to continue.
With our to continue to execute our business strategy.
And not to change the leverage profile of our balance sheet.
So the market will take care of itself.
And where is anxious as you are to see how it reacts.
Okay, and then just in regard to 2020 guidance.
Obviously, there is the occupancy Keith and.
The ran renewal piece I just wanted to understand a little better in terms of your occupancy guidance of 90% to 93% is that an all in number including the 625 to 675, including the our military is that just related to the 303 no earnings.
In regard to releasing spreads I think you made a comment that.
That the 303 of knowing territory, but the market rent. So I'm just trying to get to handle on what's in the occupancy number.
Are you assuming for cash re leasing spreads.
Hi, Chris you. This is Jim ill take your first question.
Our occupancy guidance of of 92 to 93 that is all in that would include both the face that recapture debate and the anticipated further store closings.
With regard to the rent spreads.
You had given given the point that you made we do anticipate some pressure on rent spreads to 2020.
Can you quantify that pressure on rent spreads.
I know Youve relief from the space already arm, you talked about 46% of the expirations released earlier today can you give us some sense for what that same store guidance range assumes for that pressure on rent spreads.
The.
The rent spreads our guidance for 2020 rent spreads is included in our.
Same center guidance for the year.
And I really don't want to break out at this point in the year.
How the spreads will be impacted we'd be happy because it's still really early.
I'd be happy to update you as the year progresses, but our guidance does include our best guess as of today. The end of January as with the spreads might be.
Okay. Thank you.
Your next question comes from the line as Todd Thomas with Keybanc capital markets. Please ask your question.
Hi, Thanks, good morning.
Steve I just wanted to follow up on the the deletions from the high yield dividend aristocrats Index, you mentioned that the announcement.
It was was the reason for the earnings release. This morning, and I'm just curious what do you assess will be the potential impact of this announcement.
Good morning, Todd.
We did not want any daylight between the S&P announcement on Friday night, and our earnings guidance and reporting our results.
From 2019, that's why we decided to schedule with coal.
This morning, we have no idea.
The market reaction to the number of shares.
Probably will be traded in the next week to 10 days.
This is an unprecedented event.
And candidly, we don't know the market doesn't know.
And as I mentioned before.
Where is anxious to see.
How the market reacts as youre.
Okay and then.
Can you can you comment on.
The rationale around the dividend increase I guess im just curious despite the outlook for 2020.
FFO guidance down down a little more than 10% Im curious if you can to shed some light on the dividend increase.
Well, we've put in perspective first of all.
The one penny dividend increase.
Requires less than a billion dollars of our free cash flow.
We maintain and have always maintained.
Well covered dividend.
And have a strong generate strong balance sheet, and we anticipate generating significant free cash flow again in 2020.
So it's our board.
Carefully thought about and decided that it was important for the stakeholders that.
Depend on our dividend to continue for the 20 eightth year to increases.
Okay. Thank you.
Your next question comes from the line, Eric Samir Khanal with Evercore, we ask your question.
Hey, good morning, everybody so Steve.
Jim I mean, you're forecasting 350000 of additional closures.
I guess, how much of that do you already know, it's sort of pending versus how much of that sort of his cushion you baked into it.
The guidance to capture sort of the unknowns at this point.
Some air that the.
The most of that is primarily related to a few unresolved issues not all of it but some but a big portion of that.
And those are some issues right now that we're we're unable to discuss at this point.
Happy to get more clarity as the year goes through.
Okay, and then I guess as a follow up when I look at your same store NOI guide being down to 75%.
When are you assuming that potential 350000 square feet comes back to you is that.
Is that out for the full year or are you assuming sort of mid year closure and 2020, because if it's mid year.
And then my thinking is that could be there could be additional drag in 2021, So just trying to get the timing of that.
There is there some throughout the year Samir I think the probably.
More so in the first half of the year than the second half of the year, but it's really unknown as we said right now it's issues are on resolved and we'll just have to see how that plays out as we as we go through the year.
Okay. Thanks.
Your next question comes from the line correct. Thank goodness lit Coty a bank.
Good question.
Hey, good morning, everyone.
Is there any update you can possibly provide on expectations from the forever 21 bankruptcy or is that.
Part of that unresolved closures and maybe how much that unresolved closure says that that piece.
Good morning.
We are.
We have been talked into forever 21 for quite some time.
It is there.
Their store count and.
Our.
Expectation.
For what May unfold with Forever 21 is in our guidance.
We wanted to be cautious.
Gives the market is our best estimate of the unknown.
Results or the unknown impact on our guidance.
And we'll be happy to as the year goes by when these become known update you.
As Im sure you know.
Even as of this morning with last nights press the forever 21 situation remains fluid.
We've had two of our 14 stores closed.
As of the ended the year.
Our footprint with Forever 21, and about 10000 square feet per store.
Significantly smaller than other.
Other forever 21 stores in different portfolios.
But it's still still unknown.
And so I think the anticipated closures that you mentioned in last quarter's call. It was the to closure. So is that just the two that have already close or is that kind of number changed.
Terms since expectations.
Yes, Hi, Greg steel.
Those are the two stores and closed for the two stores that we had expected to close and as I mentioned earlier.
Thank you.
Hi, Mike. Your next question comes from the line as and Michael Miller with JP Morgan. Please ask your question.
Yes, hi.
Are there are significant rent cuts assumed above and beyond the square footage that you're budgeting, but you could lose.
Good morning, Mike.
Our guidance includes.
Store closures.
Adjustments to rents.
Everything that.
Our guidance includes all those issues.
We hope conservatively.
So we got to our guidance for same center NOI.
For 2020, and as I am I just want to.
Make a self serving comment.
Our guidance last year was exceeded by our performance.
Significantly.
And we've added additional leasing representatives.
We.
Our talking to a broader spectrum of new types of tenants. So our focus now is on.
Leasing the vacant space that was return.
Over leveraged.
Tenants that were purchased by private equity funds and quarterly manage quarterly merchandised.
Does that are now going out of business and being replaced by some new exciting times and we hope to add some of those new exciting tenants to our our centers as the year goes on.
Got it and what are the attributes of the Jeffersonville Center that you see that are making harder to release that property. So you're taking the impairment on.
Hi, Mike This is Jim.
The Jeffersonville, it's it's it's.
It's a center has been in the bottom of our portfolio.
As one of the feed centers, we actually have that that's that's outside that sits in between two markets and it's outside of a either tourist destination alright.
Top NSC.
The Theres no shift in the competitive environment. So when the center get hit with these kind of vacancies. It does take a lot of time, Minnesota challenged to get.
And recover that will recover those vacancies.
And I might add I say that even.
Even though this asset as a non core asset for us.
And.
Most transparency.
We have decided to include the jeffersonville.
Formats in or same center NOI guidance.
And we'll update that obviously as the year goes by.
Got it okay. Thank you.
Your next question comes from the line is presents and PBM Fred.
Hi, Brian Sir you May ask your question.
Hi, good morning.
You mentioned, bringing more restaurant concepts into your center, but I was hoping you could see or what percentage of your rent today comes from restaurants, and where you could see that going over the next few years.
Right now.
Different types of restaurants, let me clarify.
We have very few white table cloth sits down.
Restaurants.
We do have quite a few.
Family friendly moderately priced restaurants like red lobster.
And.
Many more we've added additional Starbucks and we also opened up a very interesting.
To Bourbon tasting distillery calls with Creek distillery, which also serves food as.
Little life and fund our properties. So we're talking to all different types of food users.
Also on our Outparcels.
We are talking to and.
Working with several different type of family fresher family friendly restaurants to go on the Outparcels near our centers.
Got it so wouldn't I think these restaurants be able to take in error backfill some of the newly vacant space or more these opportunities.
On the Outparcels on really Densifying, the center and away.
I think both.
We're working with people to come in.
To the existing centers.
And to take the Outparcel space.
Got it. Thank you and then one one more for me on temporary tenants.
So what typical length of those leases and trying to get a sense of those temporary deals you're likely a lot lower rent per square foot or those being included in releasing spreads or they generally too short to where they wouldn't hit that threshold.
No.
Temporary tenants are leases that have a term of 12 months or less.
With us and their their terms could be anywhere from three months to two a year.
We do and we do not include the temporary tenants in our rent spreads.
Got it but they are included in that total portfolio occupancy level, just just to be Claire.
Yes, yes, they are.
And is there any is there any sense you can give us of what well how many tenants are on that shorter rent rent arrangement now and did you see that had going higher this year.
We have probably a little elevated group of temporary pop up tenants.
Probably close to between five and a half and 6%. This year, so maybe a 100 basis points from a year before.
And that's on the square footage basis just to clarify.
I'm, sorry, I Didnt hear you.
I said that the square footage basis or rent basis that that those numbers you decided on a square footage basis.
Perfect. Thank you so much.
Your next question comes from the line as Craig Samitt Red Bank of America, you May ask your question.
Yes. Thank you given the amount of space, it's going to needed to be least I'm, assuming we should expect an increase in tenant allowances and capex do you have a sense of how much that might increase.
Craig Thats in our guidance.
And.
We have the basic amount of our tenant allowance in our guidance is comparable to last year somewhere between 17 and $19 million.
Or about $40 a foot.
Okay, and then you know even when you look at your your your tenant exposure how much longer do you think you're going to be in.
The sort of accelerated store closings hitting your portfolio.
Does it extend to 20 122 and beyond.
Craig I wish I could tell you.
How people would merchandise their stores and out people would finance their businesses.
These are obviously issues outside of our control and their issues that impact.
All of the retail industry, regardless of the distribution channel.
We work hard with our tenants we have a.
Marketing group.
And we have a group that works with from our leasing group combined.
We work with tenants to prove up to structure.
And execute.
Exclusive and unique marketing programs to try to drive their sales and to help them.
But.
Hi, there is no answer for that Craig.
But we do monitor a lot of different tenants that are below our portfolio average and work hard to try to improve their sales.
By increasing traffic.
Okay, and just how how how was the introduction of off price retailers into year your tenant base worked out.
We have several TJ maxx, Marshalls Homegoods and other type of off price retailers. It's been seamless we tested in folio, Alabama five years ago. The concept to see if there would be any friction between off price retailers and.
Some of the fine brand names that are sold in that store and there was no friction so based on that success, we're working with them about it about introducing more stores.
Okay. Thank you.
Once again, if he would like to ask a question. Please press Star then the number one on your telephone keypad, we'd have a follow up question from the Christina hours with Citigroup. Please ask your question.
It's Michael Bilerman favorite Christie.
Can you do you have a sense on the extra 300000 square feet did you expect to hear negotiating with an I understand you can't talk about the specific situations.
What is the cadence during the year of that square footage coming out in impacting same store relative to your guidance.
Good morning, Michael.
Well, obviously since it is unknown. This is just my.
Best estimate we think that the these situations will be resolved in the first six months of the year.
And we have.
Put the last six months impact as best we could yes.
Into our guidance.
Okay. Christy also had a question, yes, sorry, I had a follow up I'm just with it with lower income you know do the occupancy decline and you talked about the higher Capex. This year pitches in your guidance.
All that causes upward pressure on your fad payout ratio between 2020 versus 29 team. What is your your estimation of free cash flow after dividend for 2020 in how does that change your capital allocation priorities as you think about.
Capital direct.
We anticipate this year to have free cash flow after the payment of our dividend of around $75 million.
We anticipate.
Continuing to upgrade our shopping centers of greater Cotenancy.
Raise our dividend.
And we feel we have and start our new development Nashville.
All with internally generated cash flow and we have $16 million of cash on hand.
We anticipate that the cash flow and cash on hand.
We'll be adequate to fund.
Our capital needs in 2020 without changing our leverage profile.
And you made a comment earlier regarding potentially selling granted hotel food in multifamily. He says what could be any proceeds from that.
They're not significance.
And they they do take quite a while to.
To complete due diligence and get these assets and these uses sold but we're in discussions with.
Seven or eight different types of uses.
In various different.
Categories, such as multifamily food.
Fitness.
That we think will add to.
The traffic over the center and the surrounding area.
More shoppers and longer dwell time.
Yes, what last question from me one of the strategies. The last few years was putting a number of tenants on short duration leases.
Dramatically reduced Rand.
And then hopefully is as leases come up be able to find them to full term market deals.
Can you at least share what's embedded in guidance for this year for the leases that are coming up that were previously mark down 20, 530% how much square footage.
I guess comes back to market is that acting as a positive offset to same store.
Adult.
The if you're you're discussing a bounce back.
Of significant impact there was not.
We have fewer.
Much less of the short term leases that we had previously.
We've been successful and extending some of the short term leases the king.
To the end of the term and extending them for two three and four years extend them out more.
And it was a successful strategy to keep the occupancy.
Robust until we were able to find a longer term.
Longer term 10.
Okay. Thank you.
Thank you.
Once again, if you would like to ask a question simply prestart extend the number one on your telephone keypad, we have a follow up question.
From Greg Mckinley, let's hold you back can you ask your question.
Hey, good morning, again, I, just regarding tenant sales, which continues to show some modest year over year improvement I'm, just trying understand that's from weaker tenants falling out which increases the average or if sales are actually doing better. So kind of assuming is it fair to assume that tenant sales were going to increase once dressbarns known could no longer include didnt.
The average next quarter.
I think thats fair to assume.
And so is it the tenant sales growth is there any now is it broad based for what is in you know tenets that you have had or is there certain tenants doing more of the heavy lifting similar to that tessler Apple.
Helping out the malls.
Fortunately, we don't have unfortunately, we don't have test for Apple.
And Greg I, just want to be clear.
All of the stores they came back.
At the end of last year. The beginning of this year are included in the 2019 sales per square foot.
If we had excluded them.
Which some people do.
It would have impacted our sales per square foot by about $7 per square foot.
Those lower volume tenants are in the comparable numbers.
And we will and it is a broad based increase.
Sales and it's also a broad based increase.
And.
Across the tenant base that we have.
And we've also increased our traffic.
Great. Thanks, Steve.
I think once again, if he would like to ask a question. Finally press Star then the number one on your telephone keypad.
Your next question comes from the line, there's talk less even rig yes, <unk>, let me ask your question.
Good morning.
Can you hear me Okay. We can hear you just fine.
Good.
Given the large short interest in the stock and.
Acknowledge strong balance sheet of the company have you considered increasing the leverage ratio, even somewhat to repurchase shares at depressed levels and possibly start to squeeze the shorts.
We have with our advisors looked at various different scenarios.
Some of which included purchasing back to stuff.
We've concluded its the best interest of the company.
We continue to execute our business plan.
We could not in our view.
Buyback enough stock.
Have a meaningful impact it's not our strategy to shrink the portfolio, it's not our strategy to shrink the equity market capitalization.
And it is our strategy to execute our business plan long term.
And we think that will provide the best results and maintain the liquidity an optionality that we have with a strong balance sheet.
Thank you.
All right at this time presenters.
We don't have any further question on Q.
Okay, well, thank you very much everybody for joining us this morning.
If you have any follow up questions. After the call we'd be happy to.
Respond directly have a great day and thanks again bye now.
Thank you.
And that concludes today's conference. Thank you all for participating you may now disconnect.