Q2 2020 Tanger Factory Outlet Centers Inc Earnings Call
[music].
Welcome to the tenure factory outlet center.
Second quarter conference call, all participants will be in listen only mode should you need any assistance. Please no conference specialist I pressed into Starkey followed by zero.
After today's presentation, there will be an opportunity to ask questions to ask a question in your press Star then one on your phone to withdraw your question. Please press Star then too.
Please note this event is being recorded.
I'd now like turn the conference over to fund the whole Vice President of Investor Relations. Please go ahead.
Good morning, it's a Cyndi Holt Vice President of Investor Relations and I would like to welcome you to the tanker factory outlet Center second quarter 2020 Conference call yesterday evening, 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. Some of management comments will be forward looking statements that are subject to numerous risks and uncertainties and actual results could differ materially from those projected.
We direct you to our filings with the Securities Exchange Commission for a detailed discussion at 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 FFO.
Core FFO and same center net operating income reconciliations of these non-GAAP measures to the most directly comparable GAAP financial measures are included in our earnings release and in our supplemental information.
This call is being recorded for rebroadcast for a period of time in the future as such as important to note management's comments include time sensitive information that may only be accurate as of today August six 2020.
At this time all participants are in listen only mode. Following managements prepared comments the call will be open for your questions.
We request that everyone ask 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 re queue for additional questions on the call today will be Stephen Tanger, Chief Executive Officer, Stephen you, all off President and Chief operating Officer, and Jim Williams.
Executive Vice President and Chief Financial Officer.
I'll now turn the call ever to Steven tanker. Please go ahead Steve.
Good morning, Thank you for joining approach.
Since the declaration of corporate night team as a pandemic kind of the related stay at home mandates and business closure directors.
Tanger has been focused on a few key priorities.
These include.
The health and safety of our employees tenants in customers.
Maintaining a strong balance sheet and liquidity position.
Working with our tenants to facilitate the Fisher store reopening <unk>.
Collecting rent and protecting our rights under the leases and encouraging shoppers to return to our centers.
I will provide a review of our second quarter performance.
An update on each of our key priorities.
So you get off will provide additional details and Jim Williams will discuss our financial results and balance sheet.
In the second quarter of 2020 same center NOI decreased by $39 million compared to the prior year.
Driven in large part by the impact of covert 19 on rent collections, which Jim will discuss.
Quarter end occupancy for our consolidated portfolio was 93.8%.
Leasing is a top priority as we seek to continue curated our centers with quality retailers to provide the best customer experience.
As of June 30.
We had lease renewals executed or in process for 68% of the space. There's a consolidated portfolio scheduled to expire during the 2020 calendar year.
Compared to 73% at the same time last year.
We expect that our renewal rate for the space expiring this year will be below historical levels, which has averaged in the 80% range.
This is partially due to the impact of expiring leases with tenants that have declared bankruptcy.
Our blended average rental rates declined 1.1% on a straight line basis, and 6.5% on a cash basis for the 296 leases totaling 1.4 million square feet.
That commenced during the trailing 12 month ended June 32020.
There are many factors clearly outside of our control.
That are having a profound effect on the world and on tanker.
However.
There are also many factors within our control that we had been proactively addressing to navigate these challenging times.
First is our balance sheet in capital position.
During the second quarter, we reduced cash outflows by approximately $11 million by reducing Gionee and property operating expenses.
And for the year.
We are also deferring certain planned capital expenditures, including our potential Nashville development.
These efforts combined with the continued improvement in rent collections helped us returned to positive cash flow in July.
With the stabilizing liquidity outlook, we felt comfortable paying down most of the amounts outstanding on our credit facility that we drew at the start of the shutdown.
As of July 31st we had more than $560 million of total liquidity.
Balance sheet strength.
Has long been a core tentative tanger.
And this discipline is serving us well.
We believe afforded fraud balance sheet is critical to navigate challenging times and to emerge with the strength necessary to pursue potential opportunities that might arise.
As disclosed last quarter.
Our board of directors has decided to temporarily suspend dividend distributions to provide additional flexibility and liquidity through this crisis.
We intend to remain in compliance with read taxable income distribution requirements for the 2020 tax year.
And the board will continue to evaluate future dividends distributions on a quarterly basis.
Well our centers never closed at the height of stay at home orders in April virtually all stores workloads.
As stay at home orders lifted stores began reopenings starting with the centers in South Carolina at the end of April.
Stores steadily reopen throughout the second quarter as other states lifted mandates.
With the opening of the northeast in mid June.
Our store Reopenings climbed to 72% a total occupied stores.
That number has continued to grow.
And as of July 30, Onest, 95% of total occupied stores and our consolidated portfolio had reopened representing 95% of leased square footage and annualized base rent.
A potential cove it exposures.
We recognize that to pay your rent collections is largely dependent on expeditious store reopening.
Well the vast majority of our tenants, we're not deemed to be essential.
We also do not have significant exposure to the categories that rely more on social interaction and are more challenged and the current environment.
We believe these categories might be attractive for us in the future.
But we are benefiting from not having many in our centers today.
We haven't been helping retailers to reopen implementing health and safety protocols to create a welcoming environment for our tenants in shoppers and encouraging shoppers to return.
We were proactive in our approach to rent deferrals to facilitate these reopening and I haven't been persistently pursuing resolution to any outstanding collections to have additional certainty in our outlook.
We have worked with our tenants appropriately to provide relief where necessary primarily in the form of deferrals.
In all cases, where are we agreed to them one time concession we did so in exchange for a corresponding leafs adjustment that provides long-term value tanger.
Additionally.
We take our responsibility to be a good corporate citizen seriously.
Is that regard.
Throughout the pandemic.
Tanger outlet centers has been used for Red Cross blood drives.
Food collection sites curbside food pick up and staging areas for law enforcement, an emergency medical services.
In the near term, we are faced with challenges around store closures rent collections and cautious consumer behavior.
As we look ahead <unk>.
Our priorities remain consistent.
Maintain a strong balance sheet.
Provide a compelling value proposition for retailers and consumers and maintain a high quality portfolio with desirable brand name and designer named tenants.
For our tenants, we provide an attractive location with a low cost of occupancy compared to other channels of distribution.
For our shoppers, we will continue to provide the brands they are seeking at the prices they want.
That are centers shopping as entertainment.
And we believe overtime, we have the opportunity to expand that concept and create additional value for tenants shoppers and shareholders.
Given the nature of our portfolio, which includes valley oriented outdoor centers. We believe we are well positioned for recovery.
I would also like to welcome Steve Y'all.
[noise] tankers board of directors. The board has expanded they members and we are looking forward to Steve's contributions.
Finally, I want to express my ongoing best wishes for everyone's good Hell and well D.
We remain committed to supporting our employees customers in communities through this difficult time.
I will now turn the call over to state.
Thank you Steve.
Last call I discussed three priorities, which have remained focused during the second clutter and subsequently to date.
[noise] burst is maximizing rent collections.
Second, it's providing support to a retailer partners as they manage their store, we openings, while ensuring shopping experience.
Safety focused organized and fun experience for many loyal shoppers.
Third is accelerating or leasing afterwards to fill bacon stores with a combination of new permanent short term and pop ups stores.
With regard to rent collections, a store closures, but first mandated immediately implemented a rent after all strategy with the goal facilitating store we openings in the quickest at most efficient way to.
That and in late March we offered all tenants in Arkansas dated portfolio. The option to differ 100 per cent of April and May Reds, while reserving all of our rights under the lease agreements.
Now is mandates have lifted across all of our centers and stores of reopened our priority has been to collect the rents their contractually do us and come to resolutions ball positioning that retailers and I'll portfolio for long term growth.
In that regard we are employed several strategies to achieve this including our rent deferral initiative and then select cases, one time concessions.
Well, we have provided one time ran concessions we had done so in exchange for landlord favorable least modifications such as <unk> tendency waivers charm extensions, an early option exercises and exchange a value for value with the ultimate goal preserving are ongoing income stream and sustaining octopus.
C.
And the second quarter, we expect to collect 43% of Red spilled differed 26%, while we continue to seek resolution on only six per cent.
Do not expect to collect 25 per cent of second quarter rats.
This includes 11% related to 10 in bankruptcy filings and potentially uncollectable accounts.
The remaining 14% includes one time concessions I discussed earlier.
Our July run collections of substantially better than to collections, a second quarter rats as of July 31st we had collected 72% of July rent billed and 79% of the net rent recognized before reserves and straight-line rent adjustments.
Through August 4th of July collection rate improve to 77 per cent of rent spelled and 84% of net rents recognized before reserves and straight-line men adjustments and we've received commitment for additional payments.
[noise] field and marketing teams had been focused on our core business, while working to encourage consumers to return to our centers and to shop.
This is entailed implementing onsite health and safety protocols, such as sanitizing surfaces frequently reinforcing social distancing using signage and facilitating shopper queuing up outside stores as brands adhere to occupancy limitation.
Additionally, we rolled out welcome back promotions sidewalk sales and launched hours three ways to shop initiative.
In store.
Curbside pick up.
And our proprietary virtual shopper program.
Launched R. Virtual shopper program at the end of June and early customer interest is promising as we were seeing better than anticipated engagement and conversion.
We are pleased to see shoppers returned to are open air centers and over the past six weeks traffic is rebounded to approximately 85% of prior year levels.
This has been accomplished even if centers continue to operate at reduced hours due to cope it.
Is expected tenant sales were greatly impacted and the second corner of stores were largely closed however, retailers and shared that they are encouraged by the patient sales and conversion rates, where it appears that the shoppers visit hours centers do so with the intent to buy.
The current environment is negatively impacted certain retailers in particular, some who are already pressured prior to the pandemic.
Year to date 14 retailers on our tenant roster have declared bankruptcy or announced a brand wide restructuring.
Most of these are in process, we don't yet no what the ultimate impact of store closures timing least adjustments or potential early termination fees.
These announcements range from small tenants with only one store in our portfolio to more significant ones I will touch on for each of which account for more than 1% of our consolidated ABR.
Senior branches are second largest tenant with 96 stores in our consolidated portfolio comprising of 534000 square feet and contributing approximately four seven point today B R.
Filed for chapter 11 bankruptcy at the end of July and they are provided a preliminary store closing list, which includes roughly a third of their stores in Arkansas holiday did 0.4 of them.
Brooks brother's comprises 23 stores in Arkansas, Holidayed portfolio with 135000 square feet and contributes approximately one 4% to R. A b R.
J crew comprises 26 stores with 140000 square feet and contributes approximately one 4% to our consolidated AVR <unk>.
And G. Three apparel has announced brand wide restructuring, including its intention to close all of it's Wilson and Bath stores.
We're currently 38, Wilson and Bath stores, and Arkansas's sedated portfolio comprising of 184000 square feet and one 6% of our AVR.
Remaining 10 instead of filed for bankruptcy.
Have a total of 46 stores and arkansas's sedated portfolio.
Probably the 183000 square feet of GLA and account for one 9% of ABR.
Painting tenants that have announced Brad wide restructurings account for a total of 45 stores and arkansas's sedated portfolio.
And prior to 134000 square feet of GLA, and one 5% of ABR.
With regard to restructurings, we have received or anticipate receiving substantial lease termination fees.
I would like to reiterate while we have provided the total contribution. These tendons currently provide to our portfolio. These situations are all fluid and we expect that the outcomes. We'll include some combination of stores remaining open.
Store closures at lease exploration.
[noise] store closure and potential lease adjustments in many cases recaptured space will provide us an opportunity to enhance an elevator our tendency and grow NOI as we continue to develop business with new to the industry and new to the platform retailer's that we believe is vine.
[noise] to driving do an additional shopper visits to our centers <unk>.
Additionally are centered designed to provide to space that is simple to reconfigure requiring limited capital investment.
While the listing retailer bankruptcies as long do too specific brand challenges that were accelerated by the virus precipitated economic downturn.
I believe the outlet distribution channel continues to be critically important for many retailers.
Would be expected leasing velocity is moderated as many retailers are taking a cautious approach to opening new stores in the near term.
It will take time to fill recent and expected vacancies. However, leasing space is the priority for the entire Tanger team and we are in active dialogue with both current and perspective brands as we provide a compelling value proposition with a low relative cost of occupancy.
[noise] Curating are tenant mix remains one of our key priorities and we believe Tanger will continue to be a top choice for retailers thinking high quality.
Located open air retail venues to control the distribution pricing and positioning of their product.
I am please that even in this environment, you're signing new permanent and pop up store agreements with many upscale our first to portfolio brands.
Since the onset of the pandemic, which reinforces hour conviction that anticipated store closures will provide us with the opportunity to improve tendency going forward.
With that.
I would now I'd like to turn the call over to Jim take you through our financial results and balance sheet and liquidity recap.
Thank you see <unk>.
Second quarter results were primarily impacted by uncollected rent and reserves related to the pandemic.
Well I used to refer to the earnings release, we issued last night for additional detail, we provided to quantify the impact of rental revenues.
For the second quarter net loss available the common shareholders was 25 per share compared to net income 15 per share and the prior year.
Second quarter core F. F available dethomas shareholders was 10 per share compared to 57 per share and the second quarter of 2019.
Same center and O Y for the consolidated portfolio decreased $39 million for the quarter, largely due to losses and variable rats, which are derived from tenant sales at stores, where temporarily closed on the mandate as well as a 33.9 million dollar charge to write off uncollectible revenues.
This includes $13 $9 million or one time rent concessions in exchange for landlord favorable lease amendments.
Eight $9 million related to the recent bankruptcies and one $4 million of other minutes, we deem at risk.
In addition, we recognized a write off of approximately three $7 million and straight line rats associated with the bankruptcies and uncollectable accounts.
The outcome of the bankruptcy is largely unknown at this time and the rent uncollectable are largely pretty petition rats.
And that's who are currently on a cash basis of counting comprise less than 5% of a monthly rent.
With regard to rent deferrals re recognized revenue from these leases and our net income F F.
And same center N O Y and recorded at least receivable on our balance sheet.
And a second quarter, we recognized $31 million a rental income for the hard rats or those that are under negotiation.
Substantially all of the deferred rats are doomed in 2021.
Majority of which are in January and February.
That's it we have taken a prudent approach towards Collectability and then the second quarter revenues were also reduced by reserve to write off an additional nine $7 million related to rent the bird and still under negotiation.
As we have previously discussed we have always prioritized maintaining a strong financial position and in these times that is more important than ever.
Since you're all set of the pandemic any related government restrictions, we have taken a number of steps to increase liquidity and preserve financial flexibility.
These include drawing down our lineup credit and implementing $11 million of G N a and property operating expense cost reductions in the second quarter.
We have also temporarily suspended certain capital expenditures for the year saving $9 million on planned projects and $25 million on a proposed Nashville development.
We completed amendments to that agreements for our lines of credit and bank term law.
Subsequent to the quarter and we have seen steadily improving grant collections and our cash flow was positive in July.
[noise] positive cash flow outlook, we have restored the salary doctors that we implemented earlier this year.
We are also repaid $200 million of the outstanding balance under the 600 million unsecured lots of credit and in July repaid an additional $320 million.
As of July 31, total liquidity was $564 million, including cash in cash equivalents on the balance sheet and unused capacity under our lines of credit.
We have no significant that maturities until December of 2023.
Due to the ongoing uncertainty around the current environment, including Covid related challenges as well as the potential impacts from announced bankruptcies and brand wide restructurings, we are not reinstating guidance at this time.
We anticipate the remainder of this year and into next year to be pressure as we see potential store closures and rent modifications from these recent announcements. Nevertheless, we believe our balance sheet as well positioned from a liquidity perspective and are taking all the steps necessary to navigate the current environment.
Now like to open it up for questions operator can we take our first question.
Thank you well now begin the question and answer session to ask a question. Sorry, then one on your phone if you're using our speaker phone. Please pick up the headset before pressing lucky.
The name tiny a question has been address and you would like to withdraw your question. Please press alright, and then too.
At this time partner entirely too with malaria out there.
Okay.
My first question comes from Craig Mcguinness with the Bank. Please go ahead.
Hey, good morning.
Steve It was encouraging to see that the foot traffic has had such a strong return and I was just wondering if you could break that down by geography or for the more tourism basic and then whether you've seen any changes in recent weeks, giving rise as corona virus cases in certain states.
Good morning, Greg.
We are also encouraged with the velocity and enthusiasm.
Outlet shoppers returning to Tanger centers once the mandates I've been alerted.
With regard to geography.
Our centers are primarily in the northeast down through the basic smiles at South East and through Texas.
We have not seen a geographic a difference between a R centers basically when the mandates were lifted people were excited to get out of their houses and go to shop, there's not much other types of entertainment difficult to go with.
<unk>, it's difficult can't go to concerts, so people were enthusiastic about coming to our centers.
With regard to new cases.
Are centers are located.
In areas not necessarily get too hard.
And we have not seen any fraud back since the the latest rising cases, and the last month or so.
Okay. Thank you.
And then just a quick one on kind of a deferrals unexpected reserve so I'm thinking about the expected lost rent and the reserve taken against deferred in the in negotiation ran curious how much that that is tenants specific versus a general reserves and then of those.
[noise] tenants, who has been paying July rats.
Jim do you want to take that.
Yes, hi, Greg Thanks.
We we've done and coming up with the reserves, Arizona lease by at least analysis.
And.
Try to get an understanding who's in the pool and was blades are reserved that we've set are appropriate.
The remember these deferrals.
Most part R.
Related the second quarter.
We have started receive some collections in July.
So let's think based on what we've seen there and from our lease Balis analysis, we thank the reserve is appropriate.
Sorry, and just to clarify there. So we're you've taken a reserve those tenants paid July rentz.
We're saying some collections coming July yes.
Okay. Thank you.
[noise]. Our next question concerns Craig's suite of Bank of America. Please go ahead.
Thank you.
I was wondering what do you think portfolio occupancy could be by year and given the store closings you just ramzi.
Alright.
Good morning, Craig.
As you know work.
We're not prepared at this time to give.
Any guidance for 2020.
I do think with the 14 bankruptcies that we have.
Been involved with.
From our tenants are tenant bankruptcies.
There will be some challenges.
As we go through the year.
A lot of the stores based on our history.
In bankruptcy States will remain open.
It's really a fluid situation until we have more clarity I don't think we're comfortable.
Giving you any sort of guidance review as to what occupancy may be appealing to you.
Okay, and then in terms of some signing of new leashes.
These 420 21.
<unk> or some of them I'm going to open the shake.
Steve Y'all up you Wanna take that.
Sure. Thanks for the question Craig.
So so far this year, we have and since Covid, we've had over 30 new stores permanent open.
35 pop ups doors open across the fleet.
New stores opening actually today, just got an alert.
So we've got a lot of a lot of new progress going and a lot of leasing happening not only for this year, but also for next year.
Okay. Thank you.
Our next question on the Council Christine right.
Saint Group. Please go ahead.
Hi, Good morning, Thank you Coke on yeah collections Palestine, all let's see we appreciate pop of course.
<unk>.
Her mom.
Right up on the road eclectic Party Parkway eight nine a M. On July I assume that includes the collect some ave.
Second corner around full flowers.
How much about 44.0 it was it fluffy 70 cheaper style of July.
And how much was that I'm supposed to give us a prior P O box.
Hi, Christina is Jim.
Yeah, you're you're correct, but what how you get to the 44 million. There's also there's some there's some ranch that we're collecting from rents that were billed for April may and June.
There's also some some rents and there were folks are already paying them, they're they're August rent.
We have received is Steve said that his remarks about 77%.
Of our July rats in July rats.
We build his jaw wrenches very summer what we what we built in.
And second quarter about 9% of those of the rents build in second corners also is related to the.
Folks are still in bankruptcy.
Does that filed in July so I'm most of those rents are pretty petition.
And we're expecting so you can kind of do the math up there and you know we're expecting some we've gotten commitments from additional payments.
For July rent. So we're encouraged to see July ranch, particularly when you can send our our portfolio is pretty much all not essential tenants are really encouraged to see.
Proving trans in our cash collections for July and and let me see so far.
Starting off in August we've seen August slightly ahead of out of July. So we're encouraged by those trends.
Okay.
Well, maybe you can help me out of the 44.0, how much of ball is just authenticate a couple of July.
Sort of trying to understand Oklahoma, probably two <unk> a collection right off of that sound correct.
For instance, chocolate quite a rocket medium no longer include Bancroft.
No longer bottom if that makes sense.
The amount of the rents that we collected.
Or July.
Bye July 31st was was.
About 23, and a half million I was about 72% of the rents bill.
And the rest of the rest the rest is.
Passed away received from previous month's rent and some prepayments for August.
Okay.
<unk> I'll just in terms of the address.
Bankruptcy and chocolate I'm sorry.
As possible 12% of your space.
Probably chocolate anything environment.
Significant amount of space that you could do email.
What sort of strategy, but even quiet and I'm kind of scenario I'm trying to [noise] I'm thinking about back sorry, not safe I'm filing thing Bronx Ah birthday is trying to box I, let's quickly if possible.
Maybe I don't know if you're gonna Grill, yeah sure as I mentioned.
Still have substantial tenant demand and particularly with some large format tenants.
And the home furnishings area.
So.
In February West Elm joined one of our shopping centers in Pennsylvania, and we anticipate pottery barn opening up and just a few days in the same shopping center. So we're discussing Ah blocks of space with large format retailer's that are non apparel retailer's that we.
Think will absorb some of that demand going forward.
But with regard to our existing footprint retailer's, we still have some some significant demand, particularly from some of the bedroom retailer's that have <unk>.
Enjoying some success in the middle part of our portfolio and are moving forward with new deals in that regard as well.
Thank you.
Our next question comes from holiday with J P. Morgan. Please go ahead.
Hi, I was wondering if you could.
Tell us how you're thinking is on its uncollectable reserves and a second quarter and beyond get him the bankruptcy sense you cut out.
And you're prepared remarks.
Uh Huh. This is Jim <unk> can you ask your question again.
[noise], Yeah, Hi, I was wondering if you get Ah if you can provide some color on how you were thinking about collectible rent reserves and the second corner and beyond skipping the bankruptcy picture that you're pancake and you're prepared remarks.
[noise] [noise] well.
For a second quarter, we we've laid that out for you and the table.
For bankruptcies for a second quarter most of those were pretty petition and we wrote of 100%.
All the ranch that has an unpaid by the bankruptcy. So that's that's taken care of.
We've got in general reserved for for for the other bucket.
Yeah, I guess, how how can we think about that and a third order on fourthquarter huh.
Well I just wanted to remind you point you the fact that.
You.
You said earlier, we are cash collections.
July.
Alrighty up to 77%.
With commitments to receive more and already nine 9% is sort of outside our control because they.
Because their their primary related.
Bankruptcy tenants in those those rents are still consider pre petition around so.
It was five spectrum alright, those often july but as you can see I think we're <unk>, we're really getting close to.
Getting the majority of our rent collections back and other than it's really going I'm going to.
Be based on if you know if there's any other bankruptcy filings.
Yeah, hopefully we've seen the worst.
But it really depends on what happens from this point.
But we've got.
Now we have the the 9% of July rats that will probably retinol and for the for most part of the rest of it isn't isn't fairly good shape.
Got it thank you.
Our next question comes from killing Borough with Goldman Sachs. Please go ahead.
Hi, good morning, when I look just about leasing when I look at the total leafing volume for the second quarter on a trailing 12 month basis, how you prevent that.
What was reported for the first quarter it looks like <unk> and two two of 20.
Two 219.
Actually increased I was wondering if that sounds right.
[noise], It's T V. I don't know if you want to take that.
Well <unk> sure I mean I'm looking.
If you're referencing the renewal volume you're referencing new deal volume I mean, I'm a remove all you might be soda.
Okay.
[noise] Caitlin your system, but I guess.
Yeah actually about the same number leases incrementally a little more square feet, but we can follow up at gunpoint you to that.
[noise] details and page.
Ah.
11, and I think of our supplement.
Okay, and then I guess.
Maybe bigger picture in terms of leasing I know you guys mentioned that it might be a little tougher going forward in terms of the leafing that you did during the second quarter did you see any sort of Ah improvement as the quarter went on or did it start out stronger your Ah, maybe finishing off like February and into my to where things.
Oh, I'm, just trying to get a sense of how leasing progressed during the second corner.
And what you think so far and a third quarter.
Okay cable anymore.
World shirt.
Alright government mandates.
And mid March.
All of US we're trying to.
All of us, meaning landlords and.
Retailer's.
We're trying to figure out the landscape.
There was.
There was no history. There is no best practice, so it took a wow.
To get back to them one normal type of conversation about recently.
So you can expect.
March April and part of Mary.
The conversation with our tenants was the health and safety protocols.
To encourage them to reopen their stores, which was our first priority and then as the centers started to who can again.
And the velocity traffic.
Return to about 85% of last year.
And the excitement of the consumer's coming back into the stores, which generated.
Better than expected conversions, Oh shoppers coming in.
Our tenant community, whereas more receptive to conversations about new stores and temporary pop up stores, Steve Yalof mentioned earlier that we've signed about 30, new leases in about 30.
Temporary deals some of the temporary deals are.
Designer names and new tenants to the outlet space and new tenants are expanding tenants.
[noise] existing space.
And then and and those leasing conversations now are more robust.
Alright is August.
<unk> for most of the portfolio, we put the discussion behind us with regard to rent collections during the the Covid period.
Got it Okay, and then I'm just looking at Ah Capex in a corner they'd be paid shows that second generation I T. I as an incentive plus the capital improvements are pretty similar and teach you 20th birthday last year. So just wondering if that's an area.
That there could be savings Ah going forward.
Or if you think that'll stay pretty consistent.
Alrighty guess is that.
The camp extra landlords work in <unk> in Reconfiguring space for new tenants will be consistent with printer years that money is only spent.
Unless the leases signed and we're ready to install a new rent paying Turner.
Two or N y.
And I just want to remind the listeners that.
Our property.
Is essentially.
One.
[noise] floor on greed 100 foot deep consistent throughout the property.
In our history.
Has been easier to reconfigure that space with different size tenants since the higher to the depth are consistent.
Alright, and where and.
Lots of meaningful conversations.
To.
Phil space as we go into the balance of the year is to see if you're all alone mentioned a couple of different types of retailer's.
There are extremely interested.
And expanding or joining the outlet distribution channel.
Okay. Thank you.
Our next question, California.
With Green Street Advisors. Please go ahead.
Hi, Hi, good morning could you elaborate on the amendments to leave structure you received in exchange for renovate minute and the second quarter.
Sure.
In the <unk> the most part.
We.
Discussed waivers a co tendency.
Pushing lease terminations extending leases early option renewals.
Things of that nature things that will protect income stream.
As well as.
Long term, Tennessee.
How did you think about the kind of monetary value of some of these pieces I may I know, it's all negotiation and it's very unique time, but yeah. I mean very good additional call you can provide on just you know how you tried to do.
<unk> from in N P V neutral point for Tanger.
I think the long term nieces, probably provide us with some with some good value I mean secure chickering occupancy is really want to one of the core focuses that we have right now.
But as we mentioned earlier, there's a number of new retailers and I'm looking at the portfolio. We've done some really good pop up to Perm leasing.
And like I mentioned earlier, some of our our bedroom retailers.
Now looking a little bit deeper in our portfolio they've been enjoying success.
With some of their entry points into our portfolio and again you know the occupancy certainly helps in our leasing after cause we are doing some of the better international or national names into our deeper into our portfolio.
Okay.
Got it. Thanks I also have a few questions on the hangar virtual shopper business model, who who bears the incremental costs and having these virtual shoppers of the tanger the retailer or the consumer through mail.
Or fees and then also does tanger receive any revenue or V sharing for providing this service.
Well the virtual shopper program was developed really when a lot of the band aid hadn't been lifted and some of our geography's yet. So we wanted to provide an opportunity for our loyal customers are those who we call Tanger insiders entangled vips an opportunity to shop entire port.
Folio.
When they couldn't actually get two.
A particular store.
So in that connection we've leveraged a lot of our in house talent in order to.
[noise] serve as the virtual shopper, we've got a robust customer service program in each one of our shopping centers and our customer service Representatives, who got great tenure at hangar.
Our intimate with all the stores in their particular shopping centers and have actually served as a great ambassadors of this program with regard to shipping their shipping fees are born by either the retailer or the purchase Sir.
So from an incremental cost point of view.
There's relatively not.
Got it and then do you use the long term offering is there a business evolves or more of a you know covid related short term.
Decision.
Well, it's a great question, we think it's a durable component of our business going forward.
I think the way shoppers shop today has evolved to a place that we hadn't seen.
And we see this is a.
A long term strategy for us to keep as part of arc Sweet of services that we offer both our customers and our retailers.
Yes, thank you for that and I'm just maybe it's one last quick one on on virtual shop or is there anything you can sure on what percentage of recent tenants sales have gone through the platform that'd be helpful.
Well, what I can share is that the engagement. We've had we've had over 100000 outside engagements on the program itself.
But I'm not prepared right now to talk about the the salesman conversion.
Sure enough. Thank you for the time.
Our next question comes from of course, then Dicom.
<unk>. Please go ahead.
Good morning, Thanks for taking my question.
I wanted to it appears that you've been very much at the.
Forefront and being proactive.
[noise] with your deferrals with your tenant's I've used maybe taco over about the outlet industry and [noise].
Yeah I have your actions.
Spurt, others to do the same thing and How's your competitive.
<unk> within the outlet space.
You know a false as a result of that.
Good morning Flores.
Well, thank you for the compliment.
I think are I think the goodwill.
We have generated with.
The tenant community.
As evidenced by the velocity, the speed with which the stores of reopened dinner centers.
At this stage to be around 95% reopened keeping in mind.
Most of that several of our larger centers are located in the Washington D C.
And on long Island, which just opened in mid June.
We're pleased with that we're pleased a lot of the time so.
Except the referral for two months to be repaid primarily in January and February of next year. So we could all get back to business.
I think the success of the program is.
We appear to be back on a normal cajuns in July and now into August.
And we're spending time with our tenants.
[noise] about future growth opportunities as opposed to only focused on how much they're going to pay and what are they gonna do.
So the referral.
Cheap that's purpose.
We have.
Over 500 different tenants.
And it would be pure chaos to try to renegotiate every least with every tenants are have all those conversations.
So we decided to take a proactive approach which appears to work.
Do you think that that spurred other of your.
[noise] competitors and the outlet space I know, they're not that many of them but.
To be more.
It took to pursue similar deferral strategies in your view.
We have a lot of respect for the well Susan senior management of our competitors.
Tomorrow knowledge their calls are coming up next week and you may want to ask their response I certainly can't speak for them.
Fair enough fair enough.
Yeah that you had a couple other interesting I thought comments earlier, which is number one you talk potentially part going on offense at some point I'm curious just you know.
What do you think are the opportunities that you might see and and where do you think you'll find them and and and the market.
Well, Steve Y'all mentioned.
The.
Upside.
Of getting stores back in our productive properties is that we have the opportunity to curie and upgrade our code tendency.
I think it's fair to say the virtually all of the.
Bankruptcies.
Productivity is there a store productivity.
We're a fraction of our shopping center average.
So this will give us some chance to.
Add more high volume tenants <unk>.
Create more excitement and the properties.
That we already own.
So that's one of the ways to go on offense second we do feel.
There are.
Opportunities in certain markets for additional outlet space.
There are no outlets or that market is under served with outlets.
And third.
We have.
$564 million.
Available.
Cash.
Or opportunities that we may find interesting to add.
Create add accretive.
Investments to the portfolio.
Alright.
And.
Let me just follow up I, if I can.
You also mentioned that some of your more experiential you're happy that you don't have the experiential Ah.
<unk> in your centers today, because obviously some of those have.
Suffered perhaps more greatly ah than than even apparel, but.
You said that you will look to add back Ah potentially going forward do you see a big change and the way a hanger outlet center will look and in two to three years.
Florida.
I don't want to speculate on what the centers may look like.
We are talking to a wide variety of different types of tenants.
Two.
Create additional excitement and exists in new experiences when our shoppers come to our properties. So please stay tuned as we continue to evolve in the mountains.
Strategic planning going forward.
Alright, Thanks, that's it for me.
Okay no more questions at this time. This concludes the question and answer session I would like to turn the call back over to Steve yet hangar.
For any closing remarks.
Let me think each of you for your time today and you were interested in our company.
We remain.
Available to go into further detail should you wish to extend the conversation.
Look forward to as all of those two stevia I'll Jim Williams.
And Cindy Houghton.
Actually Curtis look forward to greeting all of you personally as soon as we possibly can.
In the meantime.
Best wishes and hope.
You and your family's Stacey.
Thank you.
[noise] conferences now can credit. Thank you for attendance today's presentation you may know disconnect.
[noise].