Q3 2020 Tanger Factory Outlet Centers Inc Earnings Call
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Good morning, Mrs. Cyndi Holt, Vice President of Investor Relations and I would like to welcome you to the tanker factory outlet centers third quarter 2020 conference call yesterday evening, we issued our earnings release as well as our supplemental information package and our Investor presentation. That's it for me.
Sure. It is available on our Investor Relations Web site investors thought tanger outlets dotcom.
Please note that during this conference call. Some of management's comments will be forward looking statements that are subject to numerous risks and uncertainties and actual results could differ materially from those predicted we'd.
We direct you to our filings with the Securities and 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 were ever FFO core EPS up same center net operating income and adjusted EBITDA.
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.
This call is being recorded for rebroadcast for a period of time in the future as such it is important to note that managements comments include time sensitive information that may only be accurate as of today's date November six 2020 at this time all participants are in listen only mode. Following management's prepared comments the Colby.
Opened for your questions.
We request that you ask only one question and one follow up to allow as many of you as possible to ask a question.
If time permits we are happy for you to re queue for additional questions.
On the call today will be Steven Tanger, Chief Executive Officer, Steven <unk>, President and Chief operating Officer, and Jim Williams, Executive Vice President and Chief Financial Officer, I will now turn the call over to Steven tanker. Please go ahead Steve.
Good morning.
Thank you for joining us.
We'll provide a review of our third quarter performance and.
Update on each of our key priorities.
Yeah, Paul will provide additional details on our strategic initiatives and Jim Williams will discuss our financial results and balance sheet.
During the third quarter, we made meaningful improvements across each of our areas of focus including liquidity rent collections driving traffic to our centers leasing and shopper engagement.
Our centers offer a compelling option for retailers with an attractive relatively low cost of occupancy.
Or shoppers, our open air outdoor centers offer and inviting way to find the Browns and value they seek.
As evidenced by the rebound in traffic that we experienced as the third quarter progressed.
We believe we are well positioned to capture pent up demand going into this holiday shopping season and beyond.
In the third quarter of 2020.
Same center NOI was $66.6 million, a decline of 10.9 billion compared to the prior year.
Driven in large part by the impact of COVID-19 on rent collections.
We are pleased that the year over year changes significantly better than it was in the second quarter.
Furthermore.
Since the start of the third quarter, we have generated positive cash flow each month, resulting in $640 million of available liquidity at the end of October.
We have made significant progress in terms of rent collections, which were markedly improved compared to the second quarter.
For the third quarter, we expect to collect approximately 92% of rents bill, including 89% that we have already collected.
We only have approximately 3% of third quarter builds rent.
That are being deferred or still under negotiation and 5%.
Which we do not anticipate collecting due to one time concessions or bankruptcies or because we otherwise deemed them uncollectible because of tenant financial weaknesses.
In the select cases, where we have granted one time concessions we have done so in exchange for landlord favorable lease modifications such as co tenancy waivers term extensions and early option exercises in exchange.
An exchange of value for value with the ultimate goal of preserving our ongoing income stream well offering desirable brand variety and product choice to our shoppers.
This year's third quarter was negatively impacted by reduced back to school shopping caused by some districts requiring schools to be virtual.
Uncertainty was prevalent include.
Including shoppers comfort and go into stores retailers ability to open and staff their stores and the full availability of inventory.
Given that changing backdrop.
We are pleased with our performance.
For the quarter.
Graphic rebounded to 86.5% prior year.
Even as stores opened to accommodate retailer needs.
Our open air centers operated at 30% fewer hours per week since reopening.
In addition, many local mandates required only 50% of capacity at one time and retail stores.
Oh no trial.
Traffic picked up tremendously from the beginning of the quarter to there.
By mid June.
Non essential shopping mandates were lifted at all of our centers and store openings accelerated as the third quarter progressed.
At the start of the quarter approximately 88% of total occupied stores in the portfolio had reopened.
At the close of the quarter.
That increased to more than 99%.
We have increasingly moved from a defensive and reactive approach that was necessary as we learn how to adapt and operate within the protocols of the pandemic.
Words, a proactive strategy of safely getting customers back and shopping.
As of today.
We have increased hours and access as we maintain our priorities of shoppers safety retailer ability to staff the stores and the desire to offer as much access as possible to our customers.
Blended average rental rates for all leases that commenced in the quarter were off 6% on a straight line basis and 11% on a cash basis.
At quarter end occupancy for our consolidated portfolio was 92.9% down 90 basis points from the end of the second quarter.
Due in large part to Ascena closing 29 stores totaling 137000 square feet.
Well, a number of tenant bankruptcies and brand wide restructurings remain fluid at this time.
We expect approximately 80 stores, comprising 400000 square feet to close between the fourth quarter of 2020, and the second quarter of 2021.
We also expect there will be an impact on rental rates as mid lease modifications are implemented in select cases, and there's some tenant leases are renewed at reduced spreads.
These tenants situations have accelerated as the pandemic further impacted their businesses.
That is one element of our business that we cannot control and while there will likely be additional fall out as we sit today our tenant watch list is smaller than it was going into the pandemic.
Our confidence in our platform is steadfast.
While the current level of vacancy does create near term pressure on our in Hawaii that.
It also creates opportunity as we curate our centers and target new tenants that will increase the shopping options available.
To our centers.
Importantly, we have maintained our strong liquidity position.
With an improving outlook, we fully repaid the outstanding balances on our on our $600 million unsecured lines of credit.
With the increase in rent collections, we have achieved positive cash flow each month since the start of the third quarter.
As of the end of October.
We had a cash balance of approximately $40 million.
Balance sheet strength has long been a court tentative tanger.
And this discipline is serving us well.
We believe afforded five balance sheet remains crucial to navigate challenging times and to emerge with the strength necessary to pursue potential opportunities.
Our priorities remain consistent.
Maintain a strong balance sheet.
Provide a compelling value proposition for our retailers and consumers and maintain a high quality portfolio with desirable brand name tenants.
Well, we are encouraged by sequential improvements and our long term outlook. We do recognize the continued challenges we face largely due to the impact of Cove at 19.
Leasing remains a top priority.
As does continuing to build on our positive traffic momentum.
Particularly as we enter the holiday shopping period.
As we evolve from the defensive stance, we needed to take that.
At the outset of the pandemic, we're taking a fresh look at our center operations with a view towards achieving additional and alike and sustained long term growth.
Finally, I want to express my ongoing best wishes for everyone's good health and wellbeing.
We remain committed to supporting our employees.
Customers and communities through this difficult time.
I will now turn the call over to Steve ill.
Thank you Rick.
We've made significant progress in terms of stores reopening rent collection since last quarter's call.
These continue to be priorities for our entire team.
Highly focused on returning to long term sustained growth.
Our immediate emphasis is on leasing available space.
Driving traffic to our open air outlet centers and building shopper engagement to the important holiday shopping period.
We are effectively executing on our initiatives aimed at operating more efficiently to optimize cost maximizing revenue and driving and alike growth.
In terms of leasing we continue to get in front of our great brands and generate tenant interest many of which are already tenure customers that are looking to expand their footprint with us which is Calvin Klein lift down pottery barn in area. These brands and opening new locations during the pandemic, including more key stores in center core.
Occasions.
We are also strategically in successfully utilizing pop up stores.
Pop ups allow us to fill vacancies and introduce new brands and new categories to pagar, such as in the home category popular food and beverage concepts, well known local brands and digitally native brands.
While the rent per square foot on these pop up leases is lower than the portfolio average you pull a number of objectives, including keeping the space occupied with desirable retailers and setting us up for additional future growth with many of these tenants to.
Two such examples are Tory Burch, and vineyard vines, both of which initiated their relationship with us as pop ups and has since expanded have multiple long term leases.
While leasing velocity remains moderate in this environment. We believe the open air outlet distribution channel continues to be critically important for many retailers, providing a low relative cost of occupancy, making it a compelling option for retailers due to the channel, particularly strong local brands.
Through our leasing efforts, we limited our occupancy decline for the quarter to 90 basis points as new leases offset almost half of the vacancies created by the recaptured space.
We have been focused on evolving our marketing strategy to drive customers to our centers, while also increasing customer engagement.
And see our digital strategy and marketing efforts has been an objective for some time and the current environment has only accelerated this initiative.
During the quarter, we launched some exciting enhancements to the Tanger digital capabilities, where shoppers can access exclusive deals and earn rewards.
As of the end of the third quarter Tanger App downloads were up 26% year to date.
Similarly, we have continued to utilize the tanger virtual shopper program, which allows shoppers to seamlessly access product from across our platform.
This program is having the intended result of engaging shoppers and allowing them to shop in a way it fits their needs as.
As we lead up to the holiday shopping season, we were planning for one that looks different than it has in years past instead of the typical focus on the days and weeks. Following Thanksgiving. We are starting early and encouraging people to shop early shop now shop Tanger, we're working closely with our retailers to provide access.
Use of promotions at our centers and to provide a safety conscious and fun environment for shoppers at.
At this time tenets or can communicating that they're in good shape with regards to holiday inventory, having effectively work through inventory that had built up during the shutdown.
Additionally, we believe we have a compelling opportunity from an operational perspective with some enhancements to our field management team to drive yes, we've added a seasoned executive to our team literally Swanson has joined Tanger as executive Vice President of operations and is responsible for overseeing the planning and execution of our.
Operational strategies and expense management initiatives.
Growing center occupancy and developing new revenue opportunities.
The underlying elements of this approach is to ensure we have been empowered field driven organization laser focused on increasing and alike.
There are some opportunities, particularly on the expense side that we can unlock in the near term and others that will take longer to realize but I'm confident that we can drive incremental revenue and profit over time.
Finally, I would like to highlight some of our E. S. T activities with regard to the social element supporting local communities is embedded in our culture.
Haggard continues to support important social services throughout the pandemic by making our centers available blood drive improved collection distribution side.
Part of our efforts to foster civic engagement Tanger partnered with two non partisan organization headcount and power the polls to encourage voter registration and offered our full time employees paid time off could volunteer at polling stations, we are dedicated to engaging with our stakeholders on E.S.G. battery.
At all levels to further this engagement Tanger will complete a comprehensive materiality assessment early next year to help guide our ongoing yesterday strategy goals and objectives, we're committed to ongoing improvement and transparency and we look forward to reporting on our efforts and progress.
Entire team is excited by the future prospects for Tanger, although the near term environment remains uncertain and it will take some time to return to sustained growth as we continue to work through the impact of the pandemic and recent tenant reorganization I believe you had been unparalleled platform and brand from which to achieve.
Growth and create value.
With that I would now like to turn the call over to Jim to take you through our financial results balance sheet and liquidity recap.
Thank you Steve.
Third quarter results showed a strong improvement from our second quarter performance, but reflect the ongoing impact of uncollected rent and reserves related to the pandemic and tenant bankruptcies.
Please refer to the earnings release, we issued last night core additional detail provided to quantify the impact on rental revenues.
For the third quarter net income available to common shareholders was 14 cents per share compared to net income of 25 cents per share in the prior year.
Third quarter core F. FFO available to common shareholders was 44 cents per share compared to 58 cents per share in the third quarter of 2019.
Same center NOI for the consolidated portfolio decreased $10.9 million for the quarter, including a $6.6 million charge. It to write off uncollectable revenues or reserve for rents that were deferred or under negotiation at quarter end and may not be collectible.
In addition, we recognized a write off of approximately $2.4 million and straight line rent associated with the bankruptcies and uncollectible accounts.
The outcome of the bankruptcy is still not fully known at this time and the rents didn't uncollectible are largely pre petition rent.
Tenants, who are currently on a cash basis of accounting comprise less than 3% of our monthly rents.
We also continued to collect rents built for prior periods and as of October 31st our second quarter collections improved to 43% of rents build as expected payments were received rents previously under negotiation or resolved and a portion of rents written off in the second quarter were paid.
With regard to rent deferrals, we recognize revenue from these leases in our net income F and same center NOI recorded a lease receivable on our balance sheet.
In the third quarter, approximately $2.2 million of rental income built represented deferred rent or those that are under negotiation.
This is a market decline from the $28 million to FERC or under negotiation for its built in the second quarter.
Substantially all of the deferred rents are due in 2021.
The majority of which are due in January and February.
That said, we have taken a prudent approach towards Collectability and.
And that in total for both quarters, we have taken a reserve against revenues for potentially uncollectible accounts totaling $11.8 million, which represents 6% of rents billed and 39% of rents deferred or still under negotiation.
As we have previously discussed we have always prioritize maintaining a strong financial position and particularly through the pandemic. This discipline has proven to be critical with.
With improvements in rent collections, the ongoing focus on cost controls and a prudent approach to capital allocation. We currently have $640 million of available liquidity, including $40 million of cash and $600 million of unused capacity I have of credit.
At the start of the pandemic out of caution we drew down our entire line of credit.
With the improving environment during the quarter, we fully pay down the balance.
We have no significant debt maturities until December 2020, great.
In terms of capital allocation, we will continue our disciplined and conservative approach. Our priority uses of capital include investments to the liver and I like growth such as re tenanting vacancies, reducing leverage that has increased in the current environment as well as a viable selective accretive opportunities over the long term, but.
Regard to dividends the board will continue to evaluate future dividend distributions on a quarterly basis, but we remain committed to paying our dividend as required to maintain lead status.
Due to the ongoing uncertainty around the current environment, we are not reinstated 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 is well positioned from a liquidity perspective and are continuing to make the appropriate steps to navigate the current environment.
I'd now like to open it up for questions. Operator can we take our first question.
Ladies and gentlemen at this time, we'll begin the question and answer session.
Got a question you May press Star and then one yeah.
I think I touched having telephone.
To withdraw your question. Thank you May press star and two.
If you are using a speakerphone. We go ask that you. Please pick up the handset before pressing the numbers to ensure the best sound quality.
Once again that is star and then one.
Ask a question.
And our first question today comes from Katy Mcconnell from Citi. Please go ahead with your question.
Great. Thank you and good morning, everyone. So people that a little more color on what the pipeline of backfill leasing demand looks like today and based on the progress Youve made addressing 2020 exploration can you talk about how they're trending for the leases are actually signing today as opposed to the prior 12 months.
Good morning, this is Steve Yalof [noise].
I'm going to let Jim talk about the spreads, but as far as leasing is concerned.
The first thing I want to share that everybody in our company is leasing representative Steve's leasing on leasing our center managers or our leasing.
And our retailers, although they are taking a cautious approach.
Yes, we're talking about future open to buy.
You know in our.
Leasing strategy is it sounds like you were talking to a lot of the national retailers that are currently in our footprint.
Not expanding so.
Some of the recent bankruptcies that created opportunity, where we have space available and some shopping centers, they're typically high occupancy and they've given us the opportunity to get in front of a number of new retailers.
And and creating opportunities that hadn't been there in the past.
We're also employing our top up strategy as I said in my remarks, and we think pop up as a strategy is great opportunity to turn some of that vacant space into a into net income and obviously short term leases give us the opportunity to reprice, our real estate ultimately as Oh.
Got it.
We come to the end of this pandemic I'll Oh, Yeah, I'll turn it over to Jim to answer to share with you a little bit more about the leasing spreads.
Ah, Yes, I tell you this is Jim good morning.
We're not going to be able to give you much guidance as into 2021, we do and as we've said we expect.
To see a little bit continued pressure on the spread as well as.
As we're working with our tenants through this this environment and the challenges that that faces to maintain high occupancy.
Okay. Thanks, and then he has made great progress on the right questions just color on cap when you'd expect to get back to a more normalized level collection.
Based on that caused that to kill can you touch on any top or bottom categories that contributed to the Maxim could man or that I still lagging.
Katie I think.
Yeah, we're we're delighted to see that our collection rates get to 89% and really if you look at what we expect to get <unk> I think that would get up to 92.
And there's a business there's a piece that's still that was deferred or under negotiation, which was 3% which is pretty small and I think pretty pretty incredible. When you think that will pretty much had to work with almost every tenant in the portfolio.
And we're down to that a pretty small percentage. So we're working through that I think will continue to make progress there.
We've also seen.
So the rents for second quarter, and third quarter to be impacted by the bankruptcies and lot of that the write off come in from the bankruptcies.
Or pre petition rents and so now we're in the post petition periods. So we don't expect to see unless there's further bankruptcy filings, we don't expect to see.
2% of the rent is written off of that for the bankruptcies.
We do we do that I see.
Looking ahead.
To see some some more store closures and some rent months.
<unk> coming in as we work through the bankruptcy tennis.
Okay, great. Thanks.
Our next question comes from Craig Mckenna from Scotiabank. Please go ahead with your question.
Hey, good morning, just building on Caseys question, a little bit so based on that you know pretty impressive 89% collections number you clearly have been hard at work receiving past rents owed could you just provide the final collection is number by month in Q3, and then kind of where you expect collections to trend by year end that night.
82% number the bogey here.
Well, Greg I mean, again, we're going to be living like to give you guidance for fourth quarter, but.
Yeah, I mean the.
The the collection rates for those for them up because it's very similar to.
Particularly the latter marks to where our average turned out turned out to be of 89%. So far what were seeing in October is very similar to that rate.
Sorry, and that the July August.
Questions I missed.
Oh my.
We're.
Actually Joe I was trying to draw was lower but we as we don't we prefer not to give the monthly breakdown I think the.
The important piece I think is that where we're trending is toward in the quarter and looking into the fourth quarter was more like the <unk> the rates, what we're seeing in the table.
Okay. I guess then Jim as noted in the earnings release, there were some rents written off in Q2 that were repaid in Q3 and would you mind just outlining the impact of adjustments built into Q3 years old that really actually apply to last quarter's reserves and write offs.
Yeah, there's there's quite a bit of movements, Greg and the various buckets and part of this analysis.
Yeah, there's a big chunk of of minutes and deferred that won't be paid until 2021. So as we move through the year. We will have to continue to go through what's still on the books, what's still unpaid and and it looks like the billing assessments in some cases, we've increased the reserves what we had in some cases, we've had some some positive results were.
Well folks.
The paid where we didn't think there was on a paid well we've got some termination fees. What we were previously written off.
But net net I mean.
The impact of Truing up those items in the second quarter that rolled that wrote in the third quarter was pretty much a wash.
Okay.
I guess just one more from me on the the trail outlets sales just curious what the drivers were behind the disposition, whether we should expect to see [laughter] noncore or sales a few chair and then the you know what the NOI contribution was from that asset obviously, it's smaller.
Yeah.
Good morning, Yes, a terrible was a.
Very small.
Quarterly productive.
Non core asset.
And that's consistent with our long standing policy.
As an aggressive and active asset management program.
I'm not going to get too much into the details.
Because it was and then Cigna transaction, but it is consistent with our long term plan.
I think Steve.
Our next question comes from Todd Thomas from Keybanc. Please go ahead with your question.
Hey, Good morning. This is Ravi there the other line for Todd Thomas Hope, everyone is doing well.
I wanted to ask ask you guys about what concepts are team is seeing incremental demand from we have here is we're hearing about you know retailers cutting hair and clothes mall footprint a gap as an example, you know any sense. How are you know those those types of set of tenants are thinking about the outlets.
Hi, good morning, Ravi so.
First of all as it relates to GAAP EPS, we had a very favorable resolution with gap in fact looking at new concepts with gap as we as we speak but I think.
As we reduced our dependency on apparel and footwear going forward.
Home furnishings sporting goods hard goods and entertainment concepts are things that we're focused on right now.
Okay great.
Sounds like traffic and traffic as recovery, especially in September there close close to prior year levels can you offer any commentary on how that's translating into sales any updates on sales metrics or performance of the Tanger club membership average basket size or anything like that.
Well our centers are all open air.
We are.
Basically consumers feel.
More comfortable in today's environment shopping.
Last year I, just want to point out.
We were.
Compared to a period of time with Hurricane Doran in September were seven of our coastal centers were closed.
So without that impact we still would have been about 96% of prior levels, but in all transparency, we wanted to point that out.
We do believe.
We have compelling offer.
Offerings to consumers and we are prepared.
To satisfy what our research shows is tremendous pent up demand.
For people to go shop.
Okay, just a just one more for me here.
Given the additional space you expect to recapture the 400000 square feet, just wondering with a sense of where occupancy bottoms out and and when and just to clarify is that 400000 feet only for tenants in bankruptcy or are there other closures and non renewals you know in that total space you're going to.
Capture.
So in that number is is Ah.
<unk> bankruptcy and also.
Restructuring.
And obviously you know, it's a fluid situation, what I would call, but right now it's hard to make a determination as to where.
Occupancy will land.
And again I reiterate that leasing is one of the main objectives for the entire organization.
And we see that some of these.
The spaces that were getting back, particularly in some of our better assets, creating great opportunities for us to get inside of new retailers, particularly those that haven't been in our platform before and we think that's going to be a great opportunity for us to build upon as we continue to make.
Maintaining a strong leasing relationships a lot of retailers.
Thank you appreciate the color.
Our next question comes from Craig Schmidt from Bank of America. Please go ahead with your question.
Thank you I'm wondering does do the pop ups impact leasing spreads.
The top up leases.
No they don't correct.
Okay, and then regarding like home and how good categories and new retailers that are entering your properties, what kinda hbr did they pay comparable to the overall portfolio.
We don't really break down the rents implied category.
But from a contribution point of view I mean, you know we you know we you look at we look at great Halo retailers like some of the deals. We just did in line caster, we added west we added pottery barn, and those retailers that were positioned in other centers in that community, but they want to position themselves where the traffic.
Kids and they came to our shopping center and with Great brand followings that they have we see that those retailers. In addition to the rents, but they pay and hopefully some overage rent that will get a as their sales performed we also get a whole new category, a shopper shopping center shopping center and I think that's great are the.
Lastly, Ah all ships rise.
Okay. Thank you.
Our next question comes from Caitlin Burrows from Goldman Sachs. Please go ahead with your question.
Hi, Good morning, everyone I'm I, just maybe on a same store and a lie on for that revenue were down into quite a bit so where expenses I understand why I would say what kind of even with them I'm. Just wondering going forward you did talk about expense saving but is it possible to continue these expense savings.
While revenue are lower so that.
Kinda even thought the same kind of why decline do you think that the expense.
Saving may not be able to keep up with the revenue. Thanks.
Oh really this is as you can see it again.
With regard to expense savings. So I think a lot of the Q3 expense savings had to do with the fact that we had cut our hours by 30% and actually starting today, we're going to add back two hours a day for holiday shopping season, so implicit with longer hours come increased expenses.
And as I mentioned in my opening remarks, we just but you know very seasoned veteran of operating shopping centers.
To our team and a one one of the <unk>. They don't legacy a field operations with Tanger are being a little bit more marketing driven we're now pivoting to more of an operational model and we think embedded in that.
Pivot to more operations, well will come more a expense savings on the field mine.
Okay got it and then just on the lease termination fees. They were high this quarter, but I know that you guys had mentioned last quarter that you are expecting them to be high. So its just wondering if that expectation on that you now have this elevated level is over or do you think that what you had been talking about.
Last quarter, I said, it would be coming out and if there's still more to that or if we should return to a more normalized level.
Hi, Kevin This is Jim I'll take that question, we we have been getting a few termination fees, but the the primary reason.
The reason for the the termination fees that we recognized as she is a pretty significant termination fee. We received from a single tenant and we're asking us about half of that in third quarter and the other half will be recognized in fourth quarter.
Okay.
Okay. Thanks.
Our next question comes from Ben Nolan from Green Street Advisors. Please go ahead with your question.
Hi, Hi, good morning, well.
What percentage of your square footage is currently leased to pop up or temporary tenant and how does that compare to where it was a year ago.
Hi, good morning, Thanks, Steve historically temporary tenants about 4% of our portfolio, but.
Right now thats expanded to about 5.5%.
You know again short term leases and pop ups.
No to US you know obviously occupancy is critical and it's our our goal right now to maintain occupancy occupancy means cash flow but.
But in a lot of those short term leases, where we have.
Yeah short short lease exploration period's, obviously give us the opportunity to reprice, our real estate when we get to the other side of that size you know current pandemic.
Got it. Thank you and just just a follow up on Craig's question I just want to clarify so all the probably saying is not included in any of the leasing metrics like crazy break it out to different sexes all lease terms and then in terms of more than 12 months. So it none of the pop up leasing shows up even in the all lease term section.
And is that correct.
[noise] events. This agenda, let me let me just clarify are if you look at the footnote in our in our supplement we tell you that what's not in spite of some of the temporary tenant leasing.
Leasing income, which was where pop us what would be.
What some short term leases are those that's beyond beyond a year or or more.
And those with <unk> those will show in the spreads.
Okay. This is there any like how much lower is the typical rent on the pop upsetting that maybe you know.
A gap and then a lie between that it's hard to see how much that impacts, but because its not showing up in spreads and I don't know where else it would flow through in the financial decides revenue ultimately, but like this can you help us think about like okay. If you're 10 tenants are going to increase what is the rent level that they generally pay relative to the portfolio average.
Oh this is Jim I'll I'll start off and seek all up if you don't then we'll jump into mass Dusty suddenly the pop ups.
Just due to their their short term nature are not going to pay you pay the full rents and we don't really get into the.
<unk> to <unk>, the what those rents are and how these compares it's a case by case basis is a tenant by tenant basis. It depends on the country, we're talking to and who's coming in obviously the the goal there is to just to bring in some exciting new and fresh tenants to upgrade our tenant mix and we think that's that's that's where we need to go and take the portfolio.
But you know we're we're I think we're having them a lot of success and talking to these tenants and getting them interested in and coming in and nobody space in our centers.
Certainly on <unk> and on the <unk> on a pop up basis.
Okay. Thank you.
[laughter] I forget if he would like to ask a question. Please press Star then one our next question comes from Mike Mauler from JP Morgan. Please go ahead with your question.
Yeah, Hi, so looking at the reserve components, the 2.3 million tied to bankruptcy, primarily pre petition and then the at risk due to financial weakness that's about 3.6 million together, even if we're thinking about the 400000 square feet of space that you expect wins over the next few.
Quarters, what portion of that 3.6 million.
Is tied to that 400000, and then you know what portion is tied to I.
I guess other tenant situations outside of the 400000 that you know you're going to lose.
[noise] [noise], sorry, Mike I don't have that kind of a breakdown in front of me, but I can I can share with you.
There are certainly a component.
That's in the bankruptcy section, but I I, just don't have that information I'm sorry.
Okay that was it thanks.
And our next question is a follow up from Vince the bone from Green Street Advisors. Please go with your follow up.
Hi, Thanks for taking more my question I'm, just what drove the impairment charge at Foxwoods, and then does that mean the properties being marketed for sale.
[noise] Ivan.
I've answered you know the.
The impairment.
Related the Foxwoods is primarily the result of just.
That property being.
HM.
Tied to the consumer I mean, the industry. So it has had some challenges with.
With the with rents and occupancy.
Certainly see that market.
<unk> have the consignments, you're having its own challenges I think one of the consumers are still not open today.
So we do a quarterly analysis each quarter and then based on our analysis and based on the facts and circumstances at that time.
We determined that an impairment charge was necessary for foxwoods does that doesn't necessarily mean that that's being marketed for sale.
But you know we have we've always.
It doesn't mean, it's marketed for sale.
Okay. Thank you for that color and just one last one for me is can you share some color on how much variability there isn't a lot of traffic trends across your portfolio in any notable trends by region and specifically how are your two important long island centers performing compared to the rest of the portfolio.
Okay.
Vince I'll take that the portfolio we have.
Is not dependent upon.
Visitors and tourists from other parts of the world.
Which obviously had been impacted by.
This terrible virus.
Our properties, our drive to American resorts, where people tend to go.
You are up to your together.
We don't really have.
We're not a proxy for retail so if I told you the southern properties were doing better than the northern properties I don't know if I would give you a true picture.
HM different variables impacting traffic some of which are a weather.
Oh and other issues.
The present themselves today as it might be extraordinary nonrecurring issues. So I don't think we would give you.
Much data on on geographic distribution of the sales and traffic that would be helpful too.
Okay fair enough. Thanks for all the time.
And ladies and gentlemen, with that we'll conclude today's question and answer session I'd like to turn the conference call back over to Steve Tanger for any closing remarks.
I want to thank everybody for participating.
Participating in our call today.
Oh, we.
I hope to see virtually.
A lot of view it and they read a couple of weeks.
And eventually be.
Be able to visit with you face to face as we always have.
Oh please.
Be safe.
And go shopping or open air centers have a great holiday, if we don't see or speak to before.
Right.
Ladies and gentlemen, with that we'll conclude today's conference call. We thank you for attending today's presentation. You may now disconnect your lines.