Q4 2023 Tanger Factory Outlet Centers Inc Earnings Call

Good morning, I'm, Ashley Curtis Assistant Vice President of Investor Relations and I would like to welcome you all to tanker Inc. Fourth quarter 2023 conference call yesterday evening, we issued our earnings release as well as our supplemental information package and investor presentation.

Ashley Curtis: Good morning. I'm Ashley Curtis, Assistant Vice President of Investor Relations, and I would like to welcome you to Tanger, Inc.'s fourth quarter 2023 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.tanger.com. Please note that this call may contain 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 and Exchange Commission for a detailed discussion of these risks and authorities. During the call, we will also discuss non-GAAP financial measures as defined by SEC Regulation. 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. As such, it is important to note that management's comments include time-sensitive information that may only be accurate as of today's At this time, all participants are in a listen-only mode.

Formation is available on our IR website investors thought Tanger Dot com.

Please note. This call may contain 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 of these risks and uncertainties. During the call. We will also discuss non-GAAP financial measures as defined by SEC regulation G.

Reconciliations of these non-GAAP measures the most directly comparable GAAP financial measures are included in our earnings release and in our supplemental information.

Call is being recorded for rebroadcast for a period of time in the future, especially it is important to note that management's comments include time sensitive information that may only be accurate as of todays date February 16th of 'twenty 'twenty four.

This time all participants are in listen only mode. Following managements prepared comments the call will be opened for your question. Your question everyone ask only one question and one follow up question. If time permits were happy for you to re queue for additional questions on the call today will be Stephen Yalof, President and Chief Executive Officer, and Michael Bilerman, Chief Financial Officer, and Chief <unk>.

Operator: Following management's prepared comments, the call will be open to your questions. We request that everyone ask only one question and one follow-up. Time permits, we are happy for you to read to you for just a few minutes. On the call today will be Steven Yaloff, President and Chief Executive Officer, and Michael Bilerman, Chief Financial Officer and Chief Investment Officer. In addition... Other members of our leadership team will be available for Q&A. I will now turn the call over to Steven. Please go ahead.

One officer in addition.

Other members of our leadership team will be available for Q&A.

Now I'll turn the call over to Steven Please go ahead.

Thank you Ashley and good morning.

Steven Yaloff: Thank you, Ashley, and good morning. Please report another strong quarter that closed out a milestone year for Tanger. We realized robust organic growth, the same center NOI grew 5.4% for the quarter and 6.2% for the year, which was ahead of our expectations. This was driven by record leasing velocity. Harvey LeBrecht.

This report another strong quarter and closed out a milestone year for Tanger.

We realized robust organic growth same center NOI grew five 4% for the quarter.

Six 2% for the year, which was ahead of our expectations.

This was driven by record leasing velocity and positive rent spreads.

Steven Yaloff: We delivered earnings ahead of expectations, with core FFO of $1.96 per share. 7.1% ahead of last year. In the fourth quarter, we executed on our external growth initiatives, adding three new centers to our portfolio in Nashville, Tennessee; Asheville, North Carolina; and Huntsville, Alabama. These assets are consistent with our long-term strategy of investing in dominant open-air retail centers in markets that benefit from outsized residential and tourism. Tanger Outlets Nashville, our new development in the fast-growing city of Nashville, Tennessee, opened to strong retailer and customer response in October.

Delivered earnings ahead of expectations with core F. F O. The dollar 96 per share, which was seven 1% ahead of last year.

In the fourth quarter, we executed on our external growth initiatives, adding three new centers to our portfolio.

In Nashville, Tennessee.

Asheville, North Carolina, and Huntsville, Alabama.

These assets are consistent with our long term strategy of investing in dominant open air retail centers in markets that benefit from outsized residential and tourism growth.

And can immediately benefit from tankers leasing marketing and operating platforms.

Tanger outlets Nashville, our new development in the fast growing city of Nashville, Tennessee opened to strong retailer and customer response in October.

Steven Yaloff: This 291,000 square foot open-air center offers shopping and dining across seven retail floors, complemented by The Green, a unique placemaking community space. Tanger Nashville reflects our commitment to diversifying and enhancing the shopping experience for our customers. With nearly one quarter of the center's dynamic assortment new to Tanger's portfolio or first to the outlet chat. In November, we acquired Tanger Outlets Asheville, a 382,000 square foot open air shopping center in Asheville, North Carolina, a dynamic and growing tourism-driven market, centers currently occupied by a diverse mix of brands that include leading home furnishings providers, as well as iconic apparel, footwear, and accessory brands.

There's 291000 square foot open Air Center offers shopping and dining across seven retail buildings complemented by the green a unique place making community space.

Hanger Nashville reflects our commitment to diversifying and enhancing the shopping experience for our customers with nearly one quarter of the centers dynamic assortment, new to Congress portfolio or first to the outlet channel.

In November we acquired Tanger outlets Asheville, a 382000 square foot open Air shopping center in Asheville, North Carolina diner.

A dynamic and growing tourism driven market.

This center is currently occupied by a diverse mix of brands that include leading home furnishings providers as well as iconic apparel footwear and accessory brands.

Steven Yaloff: Centers sales at the time of this acquisition put this property in the bottom quartile of our portfolio. However, we believe there is great upside opportunity. Tanger Asheville will greatly benefit from the market's growth and infrastructure investment, combined with the impact of our branding, marketing, leasing, and operations over time. In late November, we acquired Bridge Street Town Center. 825,000 square foot open-air lifestyle center that is part of a larger mixed-use development in Huntsville, Alabama, is one of the fastest growing markets in the country. The Center comprises over 80 retail stores, restaurants, and entertainment venues and serves as the dominant shopping destination in the market.

Centers sales at the time of this acquisition, but this property in the bottom quartile of our portfolio.

However, we believe there is great upside opportunity as Tanger Asheville will greatly benefit from the market's growth and infrastructure investments.

Bind with the impact of our branding marketing leasing and operations overtime.

In late November we acquired Bridge Street Town Center.

825000 square foot open air lifestyle Center. It is part of a larger mixed use development in Huntsville, Alabama, which has one of the fastest growing markets in the country.

Centre comprises over 80 retail stores restaurants, and entertainment venues and serves as the dominant shopping destination in the market with.

Steven Yaloff: With occupancy just below 90%, we believe we have the opportunity to lease and merchandise the center with elevated brands and traffic-generating uses leveraging the Tanger brand and platform. We continue to see positive trends across our business. Leasing activity remains strong as we grow our portfolio with new and existing tenants; eight consecutive quarters of positive leasing spreads reflect both the value of our properties and the demand from retail. We've maintained high occupancy as we successfully backfilled vacant spaces and elevated our tenant mix across all categories. Our diverse tenancy continues to contribute to driving more shopper business, longer dwell times, and bigger spans, while adding to the vibrancy of our centers and enhancing the overall shopping experience. Year-end occupancy was 97.3% compared to 97% at year-end of 2022. Occupancy was down 70 basis points versus last quarter, driven by the acquisitions of Tanger Asheville and Bridge Street Town Center in the fourth quarter.

With occupancy just below 90%, we believe we have the opportunity to lease and merchandize the center with elevated brands and traffic generating uses leveraging the tanger brand and platform.

We continue to see positive trends across our business leasing activity remains strong as we grew our portfolio with new and existing tenants.

Eight consecutive quarters of positive leasing spreads reflect both the value of our properties and the demand from retailers. We've maintained high occupancy as we successfully backfill vacant spaces and elevated our tenant mix across all categories.

Diverse tendency continues to contribute to driving more shopper visits longer dwell times and bigger Spence, while adding to the vibrancy of our centers and enhancing the overall shopping experience.

Year end occupancy was 97, 3% compared to 97% at year end of 2022.

Occupancy was down 70 basis points versus last quarter, driven by the acquisitions of CAGR Asheville and Bridge Street Town Center in the fourth quarter.

Steven Yaloff: 2023 was a record year for leasing product. We executed 544 leases totaling over 2.3 million square feet, 9% greater than 2020. We accomplished this while elevating and diversifying our tenant mix and driving strong rent. Blended average rental rates were 13.3%, up 320 basis points year-over-year, with 37.5% spreads on retenanted space and 11.2% on renewable.

2023 was a record year for leasing productivity, we executed 544 leases totaling over two 3 million square feet, which is 9% greater than 2022.

We accomplished this while elevating and diversifying our tenant mix and driving strong rent spreads.

Blended average rental rates were 13, 3% up 320 basis points year over year with 37, 5% spreads on re tenanted space and 11, 2% on renewals.

Our high occupancy and strong tenant demand allows us to be proactive and asset manage our centers, creating additional value while optimizing the tenant mix and center configurations in 'twenty 'twenty. Four we will continue this focus on tenant and brand elevation with an aim to drive our assets revenue growth.

Steven Yaloff: Our high occupancy and strong tenant demand allows us to be proactive and asset manage our centers, creating additional value while optimizing the tenant mix and center configuration. In 2024, we will continue this focus on tenant and brand elevation with an aim to drive our assets' revenue growth while enhancing the overall center utility and shopper experience and adding amenities, restaurants, and entertainment to our users. In this connection, we will proactively retend and select stores with more productive brands rather than renew the existing tenant. This may have a near-term impact on our renewal metric. But we believe strategic asset management is important to drive long-term sustainable rent growth while we continue to elevate the quality and value of our system. December sales and traffic comps were positive, continuing the trend of improvement we realized during the quarter and culminating with a strong holiday retail season year over year.

While enhancing the overall center utility and shopper experience and adding amenities restaurants and entertainment to our user profile.

In this connection we will proactively re tenant select stores with more productive brands rather than renew the existing user base.

May have a near term impact on our renewal metrics, but we believe the strategic asset management is important to drive long term sustainable rent growth, while we continue to elevate the quality and value of our centers.

December sales and traffic comps were positive continuing the trend of improvement we realized during the quarter and culminating with a strong holiday retail season year over year.

Steven Yaloff: Retailers employed promotional activity to create value for consumers, and shoppers responded positively to these offers. While athletic, athleisure, and family apparel saw continued gains, discretionary categories were more challenged.

Retailers employed promotional activity to create value for consumers and shoppers responded positively to these offers.

While athletic Athleisure and family apparel saw continued gains.

Discretionary categories were more challenged.

Steven Yaloff: We are encouraged by the recent sales and traffic growth and are optimistic that this trend will continue into 2020. The Tanger Digital Loyalty app, which launched in 2023, continues to be an important initiative. Usage continues to grow, and we are encouraged by the program's ability to personalize offers, drive additional shopping visits, and provide us with important information about our shoppers, which helps us target our marketing more efficiently and improve the shopping experience. As we continue through 2024, our priorities remain consistent: deliver organic growth driven by strategic leasing and proactive asset management. Maximize traffic and shopper engagement through measurable and relevant digital communications, compelling authors in collaboration with our tenants, further intensify our real estate over time, including out parcel activation and unlocking additional additional revenue opportunities, and selectively pursue the acquisition and development of additional open-air centers leveraging the strength of the Tanger platform and balance.

We are encouraged by the recent sales and traffic growth and are optimistic that this trend will continue into 2024.

The Tanger digital loyalty App that launched in 2023 continues to be an important initiative for us.

Usage continues to grow and we are encouraged by the program's ability to personalize offers drive additional shopping visits and provide us with important information about our shoppers.

Helps us target, our marketing more efficiently and improve the shopping experience.

As we continue through 2024, our priorities remain consistent.

The liberal organic growth driven by strategic leasing and proactive asset management.

Maximize traffic and shopper engagement through measurable and relevant digital communications and compelling offers in collaboration with our tenants.

Further intensify our real estate over time, including out parcel activation and unlocking additional other revenue opportunities.

And selectively pursuing the acquisition and development of additional open air centers, leveraging the strength of the Tanger platform and balance sheet.

We are proud of the value we generated for our shareholders and tenants our track record of positive results underscores our ability to unlock embedded opportunities within our existing portfolio and to selectively pursue external growth.

Steven Yaloff: We are proud of the value we've generated for our shareholders and tenants. Our track record of positive results underscores our ability to unlock embedded opportunities within our existing portfolio and to selectively pursue external goals. We remain steadfast in our commitment to delivering value, fostering strong tenant relationships, and maximizing returns for our investors. I'd like to offer my sincere appreciation to our unmatched team, as well as our customers and our shareholders for their continued support. Now, I'd like to turn the call over to

We remain steadfast in our commitment to delivering value.

Fostering strong tenant relationships and maximizing returns for our investors.

I'd like to offer my sincere appreciation to our unmatched team as well as our customers and our shareholders for their continued support.

I'd now like to turn the call over to Michael.

Yeah.

Michael Jason Bilerman: Thank you, Steve. Today I'm going to discuss our financial results, which came in ahead of our full year guidance. Our strong balance sheet position, our external growth initiatives, and I'm going to end with our 2024 guidance. Our fourth quarter results came in ahead of expectations, with core FFO of 52 cents a share compared to 47 cents a share in the fourth quarter of the prior year. For the year, core FFO was $1.96 versus $1.83 in the prior year.

Thank you Steve today, I'm going to discuss our financial results, which came in ahead of our full year guidance, our strong balance sheet position, our external growth initiatives.

And with our 2024 guidance.

Our fourth quarter results came in ahead of expectations with core <unk> of 52 cents a share compared to 47 cents a share in the fourth quarter of the prior year for.

For the year of course, I felt was $1 96 versus $1 83 in the prior year the upside versus our recent guidance was the result of higher core growth and our external growth activity.

Michael Jason Bilerman: The upside versus our recent guidance was the result of higher core growth and our external growth activity. Same Center NOI increased 5.4% for the quarter and 6.2% for the year, driven by gains in occupancy and strong rent spreads with higher base rent and higher expense recovery, minor contributions from out-of-period income, as well as continued operating efficiencies and the benefits of a milder winter. Our proactive balance sheet management and focus on liquidity supported our accretive investment capital deployment. In total, we invested more than $400 million in three new centers, almost $300 million of which was deployed during the fourth quarter. We funded these transactions through cash on hand, our available liquidity, and common shares issued under our ATM program. During the fourth quarter, we sold 3.4 million common shares at a weighted average price of $25.77 per share, generating gross proceeds of $87.3 million.

Same center NOI increased five 4% for the quarter and six 2% for the year driven by gains in occupancy and strong rent spreads with higher base rents and higher expense recoveries.

Contributions from out of period income.

As well as continued operating efficiencies and the benefits of a milder winter.

Our proactive balance sheet management and focus on liquidity supported our accretive investment capital deployment in total we invested more than $400 million in three new centers, almost $300 million of which was deployed during the fourth quarter.

We funded these transactions through cash on hand.

Available liquidity and common shares issued under our ATM program during.

During the fourth quarter, we sold $3 4 million common shares at a weighted average price of $25.77 per share generating gross proceeds of $87 3 million.

Post the transactions in our capital markets activities, our balance sheet remains well positioned to support our internal and external growth initiatives with low leverage and largely fixed rate balance sheet.

Michael Jason Bilerman: Post the transactions and our capital markets activities, our balance sheet remains well positioned to support our internal and external growth initiatives with low leverage, a largely fixed-rate balance sheet, minimal debt maturities until late 2026, and ample free cash flow after dividends. At the end of the year, we had $1.6 billion of pro rata net debt and $507 million of availability under unsecured lines of credit. Our net debt to adjusted EBITDA at ProRata Share was 5.8 times for the 12 months ended December 31st.

Minimal debt maturities until late 2026, and ample free cash flow after dividends.

At the end of the year, we had $1 $6 billion of pro rata net debt and $507 million of availability on our unsecured lines of credit.

Our net debt to adjusted EBITDA at Pro Rata share was five eight times for the 12 months ended December 31st.

Michael Jason Bilerman: The sequential increase in this ratio reflects the external growth spending that was deployed in the fourth quarter without the commensurate benefit of a full year of earnings from those assets. Pro forma for a full year of EBITDA from the three new centers, we estimate that our leverage ratio would be between 5.2 and 5.3 times, still one of the lowest in the retail and REIT sectors. In terms of our interest rate hedges, $325 million of new forward-starting swaps commenced on February 1st of 2024, the date that $300 million of our prior swaps had expired. These new swaps fixed the adjusted SOFR at a weighted average base rate of 4% compared to the prior rate of 0.5%.

The sequential increase in this ratio reflects the external growth spending that was deployed in the fourth quarter without the commensurate benefit of a full year of earnings from those assets.

Pro forma for a full year of EBITDA from the three new centers, we estimate that our leverage ratio would be between 5.2 and five three times.

Well one of the lowest in the retail and REIT sectors.

In terms of our interest rate hedges.

$325 million of new forward, starting swaps commenced on February 1st of 2024, the date that $300 million of our prior swaps had expired.

These new swaps fixed the adjusted Sofer at a weighted average base rate of 4% compared to the prior rate of <unk>, 5%.

Michael Jason Bilerman: Since our last call, we added $75 million of swaps, and in aggregate, the $325 million of new swaps have varying maturities through January of 2027, so we've effectively fixed this debt for another two and a half years on average, and including this activity, over 1.5 billion, or 95% of our debt is fixed rate, and we have no significant debt maturities until late 2026. Our quarterly cash dividend remains well covered, with a continued low payout ratio, providing free cash flow to support our growth. Now, turning to our guidance for 2024. We expect core FFO per share in a range of $2.02 to $2.10, which is up three to 7% over 2023 due to continued organic growth and the contribution of the external growth activity that we completed in 2023, moderately offset by higher interest rates from the expiring swap.

Since our last call, we added $75 million of swaps and in aggregate the $325 million of new swaps have varying maturities through January of 2027, so he's effectively fix this debt for another two and a half years on average and including this activity over 1.5 billion.

Or 95% of our debt is fixed rate and we have no significant debt maturities until late in 2026.

Our quarterly cash dividend remains well covered with a continued low payout ratio, providing free cash flow to support our growth.

Now turning to our guidance for 'twenty 'twenty four we expect core <unk> per share in a range of $2.02.

Two $2.10, which is up 3% to 7% over 2023 reflected continued organic growth and the contribution of the external growth activity that we completed in 2023 moderately offset by higher interest rates from the expiring swaps.

Michael Jason Bilerman: We expect same-center NOI to be in the range of 2 to 4 percent, which benefits from the strong leasing activity to date and the impact of the proactive re-tenanting that Steve discussed, which could result in some short-term downtime. We expect recurring CapEx in the range of $50 million to $60 million, reflecting a higher retending rate in 2024 and the continued investment in our portfolio. For additional details on our key assumptions, please see our release issued last night.

We expect same center NOI to be in the range of 2% to 4%, which benefits from the strong leasing activity to date and the impact of the proactive re tenant ing that Steve discussed.

Which could result in some short term downtime.

We expect recurring capex in the range of $50 million to $60 million, reflecting our higher returning rate 2024, and the continued investment in our portfolio.

For additional details on our key assumptions. Please see our release issued last night.

Michael Jason Bilerman: And finally, we are greatly looking forward to seeing many of you at upcoming investor and analyst events later this month and into March. We are participating in Wolf Research's virtual real estate conference on February 28th, and Citi's global property CEO conference in Florida from March 4th to the 6th. A tour and management discussion at our newest development, Tanger Outlets Nashville, on March 11th, as part of ICR's Nashville Multi-Property REIT Tour, together with Highwoods, MAA, Ryman, and Peak. In addition, we'll be touring Tanger Outlets National Harbor in connection with Evercore ISI's Multi-Property DC REIT Tour on March 25th, and we'll be participating in B of A's New York City Retail REIT Headquarters Tour on March 27th.

And finally, we are greatly looking forward to seeing many of you at upcoming Investor and analyst event. Later this month as well as into mobile search we are participating in Wolfe Research's virtual real estate conference on February 28 cities Global property CEO Conference in Florida from March 4th to the sixth.

A tour and management discussion at our newest development Tanger outlets Nashville on March 11th as part of ICR is Nashville, multi property REIT tour together with high Woods MAA Ryman and peak. In addition, we will be touring Tanger outlets National Harbor in connection with Evercore ISI as multi property D. C. REIT tour on March 12.

Fifth we will be participating in Bofa is New York City retail REIT headquarters tour on March 27th please reach out to their respective firms if you'd like to join and meet with us at any of these events.

Operator: Please reach out to the respective firms if you'd like to join and meet with us at any of these events. I'd now like to open up the call for questions. Operator?

Now I'd like to open up the call for questions operator.

Thank you at this time well be conducting a question and answer session.

Operator: Thank you. At this time, we'll be conducting a question and answer session. If you'd like to ask a question today, please press star 1 on your telephone keypad. A confirmation tone will indicate your line in the question queue. You may press star 2 if you'd like to remove your question from the queue.

I'd like to ask a question today. Please press star one from your telephone keypad, a confirmation tone will indicate your line in the question queue.

You May press star two if you'd like to remove your question from the queue.

Operator: For participants using speaker equipment, it may be necessary to pick up your handset before pressing the star key. So we may address questions from as many participants as possible, we ask that you please limit yourself to one question and one follow-up. If you have additional questions, you may recur, and time permitting, those questions will be addressed. One moment, please, while we poll for questions.

For participants using speaker equipment, it may be necessary to pick up your handset before pressing the star keys.

So they may address questions as many participants as possible. We ask you. Please limit yourself to one question and one follow up.

If you have additional questions you may re queue time, permitting and those questions will be addressed when no one place when we poll for questions. Thank you.

Lizzie Duyken: Thank you. Our first question today comes from the line of Lizzie Duyken with Bank of America. Please just use your... Hi, good morning.

Yeah.

Our first question today comes from the line of Lucy taken with Bank of America. Please proceed with your questions.

Hi, good morning.

I was just looking to get some more color on them.

Michael Jason Bilerman: I was just looking to get some more color on what's embedded for expense growth in the same store and a wide guide? I mean, what should we be considerate of when modeling certain line items for 24? Like, obviously, there's the better, you know, weather experience last year.

What's embedded or expense growth in the same store NOI guide I mean, what what should we be considering when modeling certain line items for 'twenty for Mike, Obviously, there and the better you know weather experienced last year, but then.

Michael Jason Bilerman: But then, in terms of things like operational costs or marketing spend associated with ramping up your recent acquisitions, and then just the general kind of cost environment, I would love to hear a bit more. Sure. Thanks for the question, Lizzie. So, a couple of things impacting 24 are some things that happened in 23. So, as we've been talking about during the year, we certainly had a milder winter. There was about $2 million of savings this year from last year, in 23, from it not snowing.

In terms of things like operational costs or marketing spend associated with ramping up your your recent acquisition and and then Jeff.

The general kind of cost environment, we would love to hear a bit more.

Sure. Thanks for the question Lindsay.

So a couple of things impacting 24 are some things that happened in 'twenty three so as we've been talking about during the year. We've had certainly had a milder winter there was about $2 million of savings. This year from this year and 23 from it not snowing and relative to 2020 for our forecast.

Michael Jason Bilerman: And relative to 2024, our forecast assumes a normal snow year relative to the five-year average. So, you got about a $2 million, or call it just over a 50 basis point headwind, in that OpEx. There are some of the uncontrollable items like taxes and insurance, which continue to go higher. And then what we are trying to do as an organization, as you've seen in our OpEx, which was relatively flat year over year, is try to mitigate as much of that expense growth by trying to operate as efficiently as possible. And so, our 2% to 4% same-center range does obviously have some level of expense growth in it, but it all nets down to that 2% to 4% same-center growth profile. Okay, thanks.

Assumes a normal snow year relative to the five year average. So you got about a 2 million dollar or call. It just over 50 basis points of headwind in that Opex. There are some of the uncontrollable items like taxes and insurance, which continue to.

Go higher and then what we are trying to do as an organization as you've seen in our Opex, which was relatively flat year over year is trying to mitigate as much of that expense growth by trying to operate as efficiently as possible.

And so our 2% to 4% same center range does have.

You see some level of expense growth in it but it all nets down to that two to four same center growth profile.

Okay. Thanks.

And I've got a follow up question to cause some comments earlier on.

Steven Yaloff: And as a follow-up question to some comments earlier on selectively pursuing the acquisition and development of other centers, do you think you could talk about... kind of maybe these opportunities you're seeing today, given you kind of seem to have your hands full on the recent deals you closed on, like kind of what set of criteria might be needed to capture such opportunities? um, maybe, is there a number of...

And selectively pursuing.

Acquisition and development of other centers.

Do you do you think you could talk about kind of be maybe be.

Opportunity, you're you're seeing today, given you you you're kind of putting a happier hands on on the recent deals you've clementine like kind of what what sort of criteria might be needed to capture on such opportunities.

Maybe it is there a number of them.

Steven Yaloff: The target acquisitions that you're seeing for outlet centers and perhaps more lifestyle open areas. Well, first of all, we're going to be opportunistic as we were in 2023. You know, we were very active in the space, looking at a number of different assets and asset classes between the full-price open-air lifestyle as well as the open-air outland centers. We were fortunate to find two, and obviously, we developed them. Our balance sheet gives us plenty of capacity, so if we should opportunistically find something in 2024, obviously we'll be in a position to move forward on that acquisition There are a number of things that we're currently looking at, and much like where we were this time last year, unfortunately, we're not ready to speak about anything until we've executed.

Again acquisition that youre, seeing or outlet centers, and perhaps I'm more of a lifestyle open air centers.

Yeah.

Well first of all we're going to be opportunistic as we as we were in 2023.

We were very active in the space looking at a number of different asset asset classes between the full price open air lifestyle as well as the opening of our outlet centers, we were fortunate to find two and obviously we developed one.

Oh, yeah, our balance sheet gives us plenty of capacity. So if we shouldnt opportunistically find something in 2024, obviously will be in a position to.

To move forward on that acquisition there are a number of things that we're currently looking at in much like where we were this time last year. Unfortunately, not ready to speak about anything until we've we've executed.

Steven Yaloff: But from a criteria point of view, we're looking for centers that are the dominant centers in the marketplaces that they serve, that have great residential growth, great tourist growth and an opportunity for us to plug and play our platform, which is really best-in-class leasing, marketing, and operations. So we bring a lot to the shopping center, and we're looking forward to showing all we've been able to do with both Bridge Street and Asheville as we bring them into our apartment. Our next question is from the line of Flores Van Dyckum with Compass Point. I am pleased to see you.

But from a criteria point of view, we're looking to be the we're looking for centers that are the dominant center in the marketplaces that they serve.

That have great residential growth, great touristic growth and an opportunity for us to plug and play our platform, which is really best in class leasing marketing and operations.

So we bring a lot to a shopping center, we're looking forward to showing you all we've.

<unk> been able to do with both bridge Street, and Nashville, as we bring them into our platform.

Thank you.

Our next question is from the line of Floris Van <unk> with Compass point. Please proceed with your questions.

Good morning, guys. Thanks for taking my question.

Steven Yaloff: Morning, guys. Thanks for taking my question. The first question I guess is, obviously, tenant sales were down a little bit. You sort of allude to this new leasing strategy, and what can we expect, and what would that do to your average... ends sales productivity as well? Obviously, your leasing costs will be a little bit higher, but maybe also talk in terms of new uses that could come into the centers and then are these concentrated mostly in your higher end or your more densely populated centers, or is this across the portfolio? If you can talk a little bit about the strategy, that'd be great.

Your first question I guess is obviously tenant sales were down a little bit you you sort of allude to this new leasing strategy and what.

What can we expect and what would that do to your average tenant sales productivity as well, obviously your leasing costs would be a little bit higher but but maybe also talking in terms of your new uses potentially that are that would come into the centers and then our.

These concentrated mostly in your higher end.

There are more densely populated centers or is this across the portfolio. If you can talk a little bit about the strategy that would be great Steve sure sure.

Steven Yaloff: Sure, sure. First of all, you know, our leasing strategy, yeah, we like to say it's a new leasing strategy, but it's really what we've been executing on for the past two or three years. We're constantly seeking to replace less productive retailers. We're far more productive retailers, and we think we've done a really good job. We're also digging deeper and looking for alternative uses to round out the assortments in our shopping centers because we think it gives them more commercial vibrancy and draws more customers. Shake Shack was a new addition to a few of our centers in 2023, and we feel Shake Shack has this great core customer base where customers will come to our centers for Shake Shack and stay for the shopping, or vice versa. They'll come for the shopping and stay for Shake Shack.

First of all are you know our leasing strategy, yeah, we'd like to say, it's a new leasing strategy, but it's really what we've been executing to for the past two or three years, we're constantly seeking to replace lesser productive retailers with far more productive retailers and we think we've done a really good job. There. We're also digging deeper and looking for alternative uses to round out the assortments in our <unk>.

Stopping centers, because we think it gives it more commercial vibrancy draws more customers.

Shake Shack was a new addition to a few of our centers in 2023.

And we feel that shake Shack has got this great core customer base.

Customers will come to our centers for shake Shack and stayed with the shopping or vice versa comfort of shopping and staplers for shake Shack. So we feel like these great marquee names that we're bringing to our centers whether they are in the home furnishings category health and beauty and wellness category, which is new and expanding category for us to really create a lot of diversity.

Steven Yaloff: So we feel like these great marquee names that we're bringing into our centers, whether they're in the home furnishings category or the health and beauty and wellness category, which is a new and expanding category for us, have really created a lot of diversity and pushed a lot of customers to come for more trips than they would typically make to an outlet center in a given year. That same customer base also has a full price strategy, and that's why that open air acquisition in Huntsville made so much sense for us. A lot of the retailers that we've been working with for years on our outlet platform also have full price representation in that other space. Similarly, there are a number of retailers that are in the full price space that haven't yet discovered outlets.

And pushed a lot of customers come for for more trips than they would typically make to an outlet center in a given year.

That same.

Customer base also has a full price strategy and that's why that open air acquisition in Huntsville made so much sense for us a lot of the retailers that we've been working with for years in our outlet platform also have full price representation in that in that in that other space. Similarly theres enough.

There's a number of retailers that are in the full price space that haven't yet discovered outlet and so from a strategic point of view that acquisition also gives us access to retailers that.

Steven Yaloff: And so from a strategic point of view, that acquisition also gives us access to retailers that we've spoken to before and haven't had a chance to bring into our space, but now probably have a lot more connectivity to and are looking forward to proliferating throughout our entire portfolio. Thanks, and if I could follow up, maybe one of your more exciting opportunities is in Palm Beach, but you don't have any equity stake. I mean, would you potentially be on the list of things that you would look to increase your equity ownership of an asset like that? And obviously, how many other ones are there out there, like, say, a Palm Beach?

Either we've spoken to before and haven't had a chance to bring into our space, but now probably have a lot more connectivity to and are looking forward to a.

Proliferating them throughout our entire portfolio.

Thanks, and if I could follow up maybe.

One of your more exciting.

Opportunities potentially is in Palm Beach, but you don't have any equity stake I mean would you is that potentially on the list of things that you would look to.

Increase your equity ownership of an asset like that and obviously, how many other ones are there out there like like a palm Beach.

Well Palm Beach is a unique asset it's a wonderful asset for us and we like to call that asset Tanger outlets Palm Beach, So when you're driving up and down 95. It is very prominently displayed.

Steven Yaloff: Well, Palm Beach is a unique asset. It's a wonderful asset for us, and we like to call that asset Tanger Outlets Palm Beach. So when you're driving up and down 95, it is very prominently displayed.

Steven Yaloff: Obviously, the relationship that we have with the owner allows us to perhaps gain equity over time. We're excited about those prospects. We continue to raise the value of that shopping center and grow the leasing base. You know, we've added a number of great retailers to that shopping center. We're building on that foundation, and much like the rest of our portfolio, we're slightly changing the user profile, adding better food and beverage and things like that. Are there other assets like that?

Yeah, obviously.

The.

The relationship that we have with the owner allows us to perhaps gain equity over time, we're excited about those prospects. We continue to raise EBITDA that shopping center.

And grow though the leasing base.

We've added a number of great retailers got shopping center, we're building on that foundation.

And much like the rest of our portfolio, we're slightly changing the use profile, adding better food and beverage and things like that are there other assets like that you know I think that.

Steven Yaloff: You know, I think that the fact that the market is aware that we're willing to be nimble, entrepreneurial, and strategic with how we pursue additional assets. Our phone rings, and we talk about a number of these creative structures a lot. And when there's an opportunity for us to make a deal similar to the Palm Beach deal that gives us equity over time, that's something that we would consider. Thank you. Thanks, Forrest. Our next question is from the line of Samir Khanal with Evergore ISI. Hey, good morning, everyone.

The fact that the market is aware.

That we're willing to be nimble entrepreneurial and strategic with how we pursue additional assets our phone rings and we talk about a number of these creative structures a lot and when there is an opportunity for us to make a deal similar to the Palm Beach deal that gives us equity.

Over time, it's something that we would consider.

Thanks, Steve.

Thanks, Laura.

Our next question is from the line of Samir Khanal with Evercore ISI. Please proceed with your questions.

Hey, good morning, everyone I guess.

Steven Yaloff: I guess Michael or Steve are in the same store here. There's been a lot of questions around sort of troubled tenants, right? So maybe help us understand what you're assuming for bad debt in your guising. Thanks, Samir.

Michael or Steve on same store here.

You know theres been a lot of questions around sort of troubled tenants right. So maybe help us understand what you're assuming for for bad debt.

In your in your guidance. Thanks.

Thanks, Sameer so if you look to 2023.

Michael Jason Bilerman: So if you look to 2023, under 50 basis points of effective reserve and in bad debt, and within our guidance range of two to four, we effectively have a similar-esque level at different ends of the range. We feel we are reasonably protected in that way because we're constantly in discussions with our tenants. You know, when things hit the news, generally, that's not going to be a surprise to us.

Under 50 basis points of.

Our reserve and bad debt.

And within our guidance range of two to four.

We effectively have a similar esque level.

Different ends of the range, we feel we are reasonably protected in that way.

Because we're constantly in discussions with our tenants.

When things hit the news are generally that's not going to be a surprise to us.

Michael Jason Bilerman: And it's something that we work towards and manage through during the year. Okay, and then my second question is around sales growth. When you look at sales, they've been flat over the last two years, and your occupancy cost is 9.3%. I mean, it's still a good level to be, but it is moving up.

And it's something that we work towards.

And managed through.

During the year.

Yeah.

Okay, and then I guess my second question is around sales growth.

You know when you look at sales it's been flat over the last two years and your occupancy cost is.

It's a nine 3% and it's still it's still at the level that would be but it is moving up so what what happens if sales sort.

Steven Yaloff: So what happens if sales continue to be flat or slightly down, and let's say occupancy costs are above 10% over the long term? What's your ability to push rents at that time? Thanks. Bullock, I.

<unk> continues to be flat or slightly down and let's say occupancy costs at about 10%, but over the long term, what's your ability to push rents at that time.

Well look I.

Steven Yaloff: Growing rents is really, I mean, that's really priorities one, two, and three for this organization. And I think we've done a pretty impressive job of executing on that, you know, eight consecutive quarters of positive rent spreads. And we continue to build on that. The other thing is our leasing velocity hasn't slowed down. Last year was a better year for us.

Growing right. So it's really I mean that that is really priorities one two and three for this organization and I think we've done a pretty impressive job of executing that to that.

Consecutive quarters of positive rent spreads and we continue to build on that.

The other thing is our leasing velocity hasnt slowed down last year was a banner year for us. It was the most leasing that we've done in any given year.

Steven Yaloff: It was the most leasing that we've done in any given year. We also see new acquisitions that have come with their share of vacancy. We see vacant space as an opportunity to continue to fill with retailers that are far more productive than some of the retailers that we have in our existing tenant base right now. You know, we've also are where we've talked about temp to perm and taking a lot of that temporary space and putting permanent tenants in it. We've done a real good job of replacing the temporary space with permanent tenants. But, you know, now we're also thinking about, you know, that renewal activity. Last year, we renewed 95% of our tenants. I mean, it's great.

We also see the new acquisitions that have come with their share of our vacancy we see vacant space as an opportunity to continue to fill with retailers that are far more productive than some of the retailers that we have in our existing.

Tenant base right now.

We've also are we've talked about temp to perm and taking a lot of that temp space and putting permanent tenants we've done a real good job of.

Replacing the temp space with permanent tenants.

But you know now we're also thinking about that renewal activity last year, we renewed 95% of our tenants renewed.

I mean, it's it's great. There's no downtime, we did so at about a 10% spread to the prior rents, but now we're gonna be a little bit more strategic and some of those tenants that might choose to renew we may elect to replace with more productive higher rent paying better sales producing retailers and NASA.

Steven Yaloff: There's no downtime, but we did so at about a 10% spread to the prior rents. But now we're going to be a little bit more strategic. And some of those tenants that might choose to renew, we may elect to replace them with more productive, higher rent-paying, better sales-producing retailers. And that's the focus of ours, and our leasing team is 100% laser focused on executing. We've been able to drive new tenancy into our centers, new uses, and we think that's going to help us grow our sales over time. But, you know, the most important point is that the leasing velocity has been slowed down, and retailers are showing that they're willing to pay more rent to be in our stores. Thank you.

<unk> of ours, and our leasing team is 100% laser focused on executing to that we've been able to drive new tenancy into our centers New uses and we think that's going to help us grow our sales over time, but the most important point is leasing velocity hasnt slowed down and the retailers are showing that they are willing to pay more rent to be in.

Our shopping centers.

Thank you.

My next question is from the line of Todd Thomas with Keybanc Capital markets. Please proceed with your question.

Todd Thomas: Our next question is from the line of Todd Thomas with KeyBank Capital Markets. Please proceed with your question. Hi, thanks. Good morning.

Hi, Thanks, good morning.

First question was on the same store guidance of 2% to 4% and the higher returning activity that you discussed in the year ahead, just compared to 23, which could cause some disruption how much drag on 24 same store do you anticipate from that and then how should we think about.

Michael Jason Bilerman: The first question was on the same store guidance. So, two to 4% and the higher re-tenanting activity that you discussed in the year ahead, just compared to 23, which could cause some disruption. How much drag does 24 same store have?

Michael Jason Bilerman: Do you anticipate that from that? And then how should we think about the re-tenanting spread and renewal spreads that you anticipate relative to the 37% new lease spread and 11% renewals in 2023? Thanks, Todd.

The re tenant it spreads.

And renewal spreads that you anticipate relative to the 37% new lease spreads at 11% renewables in 'twenty three.

Thanks, Todd so embedded in our two to four.

Michael Jason Bilerman: So embedded in our two to four same-center guide is the earnings that we have from the leasing activity that Steve talked about, where we've released 20% of our portfolio of 13. And then as we think about what happens in 24, the range contemplates different scenarios in terms of where our tenant retention will be. And there are different strategies in terms of getting to both ends of the range, depending on whether we have a higher tenant renewal rate and therefore more downtime, but higher rents, which translates into 25, or maybe a little bit higher of a renewal rate and therefore less downtime, but not as high on the rent side. So there's a lot of puts and takes, and there's not necessarily a number that's within the range of downtime They're definitely coming in at 95% this year.

Same center Guy is the earning that we have from the leasing activity that Steve talked about where we've re leased.

20% of our portfolio of 13, and then as we think about what happens in 'twenty for the range contemplates different scenarios in terms of where our tenant retention.

B and there are different strategies in terms of getting to both ends of the range depending on if we have a higher tenant renewal and therefore more downtime, but higher rents, which translates into 25 or maybe a little bit higher over the renewal rate and therefore less downtime, but not us.

Hi on the rent side. So there's a lot of puts and takes and theres not necessarily a number that's within the range of downtime, but it is a headwind you know they're definitely coming in at 95%. This year, we talked on the last conference call about our intent of this strategy both from a capex perspective.

Michael Jason Bilerman: We talked on the last conference call about our intent for this strategy, both from a CapEx perspective, but also some of the downtime that would be associated with that. And we're going to try to mitigate as much of that downtime with some temporary tenants, but there is certainly a modest drag on our numbers from it. Okay, so higher re-tenanting activity will result in more drag, and higher re-tenanting lease spreads, which would maybe have positive implications as we think ahead to 2025 and vice versa.

But also some of the downtime that would be associated with that.

And we're going to try to mitigate as much of that downtime with some 10 tenants, but there is certainly a modest drag in our numbers from it.

Okay. So so higher re tendering activity would result in more drag.

Higher returning lease spreads, which which would maybe have positive implications as we think ahead to 'twenty five.

And vice versa higher renewals and re is resulting in higher same store this year.

Michael Jason Bilerman: Higher renewals end up resulting in higher same-store sales this year with lower combined leasing spreads. Yeah, you know, we will guide to leasing spreads; what we do guide to is SSNOI growth. And, you know, we've built a plan that took into consideration the renewal rate, which is probably more in line with previous years of 80 to 85% renewals, where last year was an outside year at 95%. So our mission is to replace a lot of the less productive with more productive. Michael mentioned there'll be a drag, and there'll be some downtime.

With with lower combined leasing spreads.

Yes.

We will guide to leasing spreads what we do guide to SS NOI growth and we've built a plan that took into consideration.

Renewal rate, that's probably more in.

In line with previous years of 80% to 85% renewals, where last year was an outsized year at 95%. So our mission is to replace a lot of the lesser productive with more productive.

Mentioned there'll be a drag there'll be some downtime, we're pretty good at keeping those spaces filled and occupied.

Michael Jason Bilerman: We're pretty good at keeping those spaces filled and occupied and minimizing downtime as much as we can. We've got a great TI team that's on the front lines whose sole purpose is to make sure that we facilitate a very quick transition from retailer to retailer. But I think the best indicator of our ability to plan this is in that SSNOI guidance. Okay, and then my other question was around, You were sitting on a lot of cash previously, over $200 million last quarter, which helped the companies' combined cost of funding for the acquisitions completed in the fourth quarter. With that cash deployed now for Asheville and Bridge Street, how does that change how you think about future investments and required returns, just given your cost of equity and debt today without having that cash on the balance?

Minimizing downtime as much as we can we've got a great team. That's on the front lines, whose sole purpose is to make sure that we facilitate a very quick transition from retailer to retailer.

I think the best indicator of our ability to plan. This is in that S. A S. S. S. NOI guidance that we shared with you.

Okay.

And then my other question was around investments.

Youre sitting on a lot of cash previously over over $200 million last quarter, which helped the companies blue.

Blended cost of funding for the acquisitions completed in the fourth quarter.

With that with that cash deployed now for Asheville and Bridge Street.

How does that change how you think about future investments and required returns just given your cost of equity and debt today.

Without having that that cash on the balance sheet to deploy.

Sure.

Michael Jason Bilerman: Sure. What's interesting, Todd, is that with the reduction in credit spreads and the decline in interest rates, the cost of debt from when we did those transactions has come down meaningfully. You think about where REIT bonds and we were trading last year, you know, we've come in pretty substantially. So we're conscious of our cost of debt, as well as our cost of equity; both have improved over time. We are going to be prudent and disciplined in everything that we look at. We want to make sure that any asset we bring to this portfolio is both strategic in nature and ultimately provides financial accretion. And those are two disciplines that we want to be very mindful of. And the other part of this is where our balance sheet stands today. Pro forma for the acquisitions was 5.2 to 5.3 times. And that's where we are today.

Interesting Todd as you know with the reduction in credit spreads and the decline in interest rates the cost of debt from when we did those transactions has come in meaningfully do you think about where REIT bonds and we're trading last year, we've come in pretty substantially so we're.

Conscious of our cost of debt as well as our cost of equity both have improved over time, we are going to be prudent and disciplined in everything that we look at.

I want to make sure that any asset we bring onto this portfolio is both strategic in nature and ultimately provides financial accretion.

And those are two disciplines that we want to be very mindful of.

The other part of this is where our balance sheet stands today pro forma for the acquisitions were five two to five three times and that's where we are today.

Michael Jason Bilerman: But we've provided same-center guidance of two to three, two to four percent. You know, EBITDA growth a little bit ahead of that, given where our G&A load is. And then from a free cash flow perspective, you know, looking back at 2023, this company generated $80 million of free cash flow.

But we've provided same center guidance of $2 three 2% to 4%.

EBITDA growth a little bit ahead of that given where our G&A load is and then from a free cash flow perspective, you look at back at 2023, the company generated $80 million of free cash flow.

Michael Jason Bilerman: And so the combination of continuing to have a low payout ratio; we're increasing FFO by 3 to 7% this year; that's going to drop to the bottom line and provide us with free cash flow and EBITDA growth, which would give us the capacity to go out and make acquisitions on a solid basis. And so we really take pride in where the balance sheet stands to be able to have the opportunity to execute and be mindful of those opportunities. Okay, thank you. Our next question is from the line of Craig Mailman with Citi. Good morning.

And so the combination of continuing to have a low payout ratio.

Increasing <unk>, 3% to 7% this year, that's going to drop to the bottom line and provide us free cash flow and EBITDA growth, which would provide us the capacity to go out and make acquisitions on a solid basis.

And so we really take pride in where the balance sheet stands to be able to have the opportunity to execute.

And be mindful of those opportunities.

Okay. Thank you.

Our next question is from the line of Craig Mailman with Citi. Please proceed with your question.

Hey, good morning.

Craig Mailman: Just to follow up on the investment question, Steve, I appreciate you don't want to give guidance here, but maybe some color on, you know, the mix of what you're underwriting, whether it's more outlet versus additional lifestyle centers. And then also, have you guys identified any out-parcel or redevelopment within the portfolio and have sort of an earmarked spend for that? I noticed you took another $30 million from the ATM, it looked like, in December.

Just a follow up on the investment question, Steve I. Appreciate you don't want to give.

Guidance here, but maybe.

Some color on you.

The mix of what you are underwriting whether it's more outlet versus additional lifestyle centers.

And then also have you guys identified any our parcel or you know redevelopment within the portfolio would have sort of a and <unk>.

Earmark spend for that I noticed you took another $30 million on the ATM it looks like in December.

Steven Yaloff: So maybe just talk about what that cash is used for, sort of near-term or whether they're... Thanks for the question, Craig. Look, I'll take the front half, and I'll turn it over to Michael to talk to you about the ATM activity.

So maybe just talk about what that cash was used for that's going to be sort of near term or whether that was just opportunistic.

Thanks for the question Craig I'll take I'll take the front half and I'll turn it over to Mike will talk to you about the ATM activity, but.

Steven Yaloff: But, you know, and, you know, I appreciate you understanding why we're not going to sort of divulge the things that we're looking at in the competitive marketplace out there. And, you know, we think we might see value where others don't, which might give us a little bit of an advantage in certain markets that we're looking at. Obviously, we're an outlet company. We feel that the open-air lifestyle is immediately adjacent to shopping malls for a number of the reasons I shared in my prior answer, just talking about a lot of the synergies of retailers in food and beverage and entertainment and the things that we've been doing in our centers now for the last three years.

And you know and I appreciate you understanding why we're not going to sort of divulge the things that we're looking at.

Marketplace out there and we think we might see value, where others don't which might give us a little bit of an advantage in certain markets that we're looking at.

Obviously, we're now in the company.

We feel that.

Open air lifestyle is immediately adjacent to outlet for number of reasons.

Sure.

My prior answer just talking about a lot of the synergies of retailers and food and beverage and entertainment and the things that we've been doing in our centers now for the last three years.

Steven Yaloff: You know, that said, we do think that there's a tremendous amount of opportunity for us in our out parcel. We have a lot of excess unmonetized land that we own outright, and we've got a team that's focused 100% on just monetizing that. We brought a couple things to light last year, Dave and Buster's in Savannah and a couple of other out parcels that we were able to open up new facilities on. This year, we've just delivered property in Arizona to Texas Roadhouse, they're under construction currently, and again, adding food and beverage to a very, very highly productive shopping center.

That said, we do think that there's a tremendous amount of opportunity for us in our out parcel we'd have a lot of excess on monetized land.

We own outright and we've got a team that's focused 100% on just monetizing that we brought a couple of things to light last year, Dave and Busters, and Savannah, and a couple of bolt.

Of other out parcels that we were able to.

Open up new facilities on.

This year, we've just gone through possession in Arizona to Texas, Roadhouse or under construction currently and again, adding food and beverage who are very very highly productive shopping center, when we get more customers to come stay longer and as we like to say.

Steven Yaloff: We'll only get more customers to come, stay longer, and, as we like to say, spend more when they're there. So it definitely feeds into the narrative of what we're doing across our portfolio. We do have a lot of other land to monetize.

Spend more when they are there so it definitely feeds into the narrative of what we're doing across our portfolio.

We do have a lot of others.

To monetize those deals are actually very good deals for us require very little capital on Orient. We are that these are as we are not sellers. So we like to enjoy the rent that comes with with that opportunity and fully monetized. We think theres a lot of there's a lot of headroom for us out there as far as Atms.

Michael Jason Bilerman: Those deals are actually very good deals for us, and they require very little capital on our end. We are debt leasers, we are not sellers. So we like to enjoy the rent that comes with that opportunity, and fully monetized, we think there's a lot of headroom for us out there. As far as ATM, I'll ask Michael to sort of take that piece. Thanks, Steve.

Yes, Michael Thats sort of thing that these thanks, Steve and thanks, Craig for the question. The ATM activity, we announced $57 5 million when we announce Huntsville, we did about $30 million post.

Michael Jason Bilerman: And thanks, Craig, for the question. You know, the ATM activity. We announced $57.5 million when we announced Huntsville. We did about $30 million post that, which was really just to position our balance sheet effectively back to where it was at the start of last year. At 5.2 to 5.3 times, we feel that that leverage level is, you know, towards the low end of our range, even before EBITDA growth and free cash flow, to allow us the optionality to be able to fund our internal and external growth activities.

<unk>, which was really just to position our balance sheet.

Effectively back to where it was at the start of last year.

Five two to five three times, we feel that that leverage level.

Is it.

And towards the low end of our range, even before EBITDA growth and free cash flow to allow us the optionality to be able to fund our internal and X growth external growth activity and net equity was raised at a commensurate yield to where we invested in assets and so we thought it was an appropriate amount.

Michael Jason Bilerman: And that equity was raised at a commensurate yield to where we invested in assets. And so we thought it was an appropriate amount. It was prudent.

It was prudent and it allowed us to come into this year.

Michael Jason Bilerman: And it allowed us to come into this year with full availability now on our line of credit, which we feel provides us access to capital. Great. And then just a second question, more guidance-related. I know you guys put in other income and kind of expenses of $0 to $2 million, which seems like the drop would just be less interest income given that you've exhausted the cash balances. But just wondering if you have any color on the kind of management, leasing, other services, and other revenues, which contribute about almost $26 million in 2023. What you expect from a run rate perspective there in 2024 to be meaningfully different, or any color you could give on that would be great. This is Doug.

With full availability now on our line of credit.

Which we feel provides us access to capital.

Great and then just a second question more guidance related I know you guys put in other income kind of expense of <unk> 2 million, which seems like the drop would just be less interest income given that you've exhausted the cash balances, but just wondering if you have any color on kind of management.

Leasing other services and other revenues, which contributed about almost $26 million and 23, what you expect from a run rate perspective, there in 'twenty four.

Meaningfully different or any color you could give on that would be great.

Sure Greg This is Doug.

That number we continued to grow through the activities that.

Michael Jason Bilerman: That number should continue to grow through the activities that we're providing. We talked about last quarter taking on additional management of the Strip Center adjacent to our Palm Beach outlets. But otherwise, there shouldn't be any substantial growth in the line item.

We're providing a we talked about last quarter, taking on additional management of the strip center adjacent to our Palm Beach outlets.

But otherwise there shouldn't be any substantial growth in the line item it can be lumpy at times due to leasing fees, but the the tanger.

Michael Jason Bilerman: It can be lumpy at times due to leasing fees, but the Tanger Place next door to Tanger Palm Beach was the only mid-year addition last year that would have had a full-year run rate impact in 24. Otherwise, we'll continue to earn a variety of fees through the assets owned in joint ventures and then the Palm Beach property. Okay, it's just going to be scribed slightly higher. Sorry, what was that, Craig?

Tanger place next door to Tanger Palm Beach was the only mid year addition, last year that would be full year run rate impact in 'twenty four otherwise we will continue to earn a variety of fees through the assets owned in joint ventures, and then the the Palm Beach property.

So I'm going to describe with slightly higher.

Okay.

Sorry, what was that Greg.

You say that the amounts should be kind of flattish year over year to slightly higher so 26 $27 million range, it's sort of a fair way to think about it.

Craig Mailman: I was going to say the amount should be kind of flattish year-over-year to slightly higher. So, you know, the $26, $27 million range. It's sort of fair when you think about it. Yes, so you're talking about all of the ancillary revenues, including the sustainability initiatives, the EV charging, the marketing partnerships, all of those pieces. I thought the question was about the management and leasing fees. But you're right; the rest of that business, we see continued opportunities. The $0 to $2 million in interest and other income; that line item is primarily interest income along with some of the TRS activity and some small miscellaneous pieces.

Yes so.

Youre talking about all of the <unk>.

Ancillary revenues, including the sustainability initiatives.

EV charging.

Marketing partnerships all of those pieces I thought the question was on the management and leasing fees, but youre right. The rest of that business, we see continued opportunities.

Zero to $2 million on the interest and other income that line item is primarily interest income along with some of the Trs activity and some small miscellaneous pieces, but the other revenues line item. We will continue to see progress on our marketing partnerships initiatives. The team there is doing a great job.

Michael Jason Bilerman: But on the other revenue line item, we will continue to see progress on our marketing partnerships initiative. The team there is doing a great job. Our sustainability initiatives continue to drive revenue. Some of that came online last year, so you'll see some full-year impact from that in 2024.

Our sustainability initiatives continue to drive revenue some of that came online last year. So youll see some full year impact from that in 'twenty four.

Yeah, We think that's a line item that is high.

Michael Jason Bilerman: You know, we think that's a line item that is a high strategic priority for us, and we'll continue to see growth in those various revenue line items. Okay, all right, so that and that are kind of going up a little bit. Okay, perfect, thank you.

High priority strategically for us and we will continue to see growth in those various revenue line items.

Okay, Alright, so net net those are critical in hydro, but okay perfect. Thank you.

Caitlin Burroughs: Thanks, Craig. Our next question is from the line of Caitlin Burroughs with Goldman Sachs. Please continue with your question.

Thanks, Greg.

Our next question is from the line of Caitlin Burrows with Goldman Sachs. Please proceed with your questions.

Yeah.

Michael Jason Bilerman: Hi, everyone, congrats on the strong year. Maybe starting with occupancy, could you guys just confirm whether the tenants remain at 10% now, but then, more importantly, permanent tenancy increased during 23? So what's your outlook for increases in permanent occupancy in 24? And maybe what are some of the pieces to consider why it may or may not increase in the near future?

Hi, everyone. Congrats on a strong year.

Maybe starting with occupancy could you guys just confirm whether the temp tenants remain at 10% now, but then more importantly permanent tenancy increased during 23, so what's your outlook for increases in permanent occupancy in 'twenty four and maybe what are some of the pieces to consider why it may or may not increase in the near to medium term.

Michael Jason Bilerman: Thanks, Caitlin. So, TEMP continues to be about 10% of our portfolio. Occupancy in aggregate was 97.3, which includes the acquisitions of Huntsville and Asheville, which were below average occupancy for our portfolio. On a same center basis, it was relatively flat at 98%, which was up about 100 basis points over last year.

Thanks Caitlin.

Tim continues to be about 10% of our portfolio occupancy in aggregate was 97, three which includes the acquisitions of Huntsville, Nashville, which were below average occupancy to our portfolio on a same center basis. It was relatively flat at 98%.

Which was up about 100 basis points over last year and all of that growth came from increasing permanent occupancy. So a lot of things that we've been talking about on the calls has been we're going to continue to drive our overall occupancy to a point, where then we can start to reduce the amount of attempt and I love.

Michael Jason Bilerman: And all of that growth came from increasing permanent occupancy. So, a lot of things that we've been talking about on the calls have been, you know, we're going to continue to drive our overall occupancy to a point where then we can start to reduce the amount of TEMP. And I love when Steve always says, as long as there's one vacant square foot, we're going to try to get a tenant in that space overall. As we think about what's going to happen in 2024, we've talked a lot about this re-merchandising and re-tenanting, which is swapping out PERM for PERM.

Steve always says as long as Theres, one vacant square foot, we're going to try to get a tenant in that space overall as we think about what's going to happen in 2024, we've talked a lot about this re merchandising and re tenant ing.

Which is swapping out perm for Perm, So our expectation over the course of the year embedded within our guidance has some range where well continue to.

Michael Jason Bilerman: So, our expectation over the course of the year, embedded within our guidance is some range where we'll continue to increase our permanent overall. But the most important thing is the replacement of lower productive users and replacing them with higher productive users, which will drive our sales growth, drive our rents, and ultimately drive NOI.

Increase our permanent overall, but the most important thing is the replacement of lower productive users and replacing them with higher productive users, which will drive our sales growth driver rents and ultimately drive NOI.

Got it Okay, and then maybe just a follow up to question from earlier on the uncollectible rents you mentioned some things in the news it's normally not new news to you, which is good but I'm guessing that may be something that could come up in August and November 'twenty four I say, maybe it's not quite fully appreciate it now in February so to what.

Michael Jason Bilerman: Okay. And then maybe just to follow up to a question from earlier on the uncollectible rents, you mentioned how when something's in the news, it's normally not new news to you, which is good. But I'm guessing that maybe something that could come up in August or November 24, say, maybe isn't quite fully appreciated now in February.

Michael Jason Bilerman: So to what extent is the roughly 50 basis points of rent reserve bad debt assumption maybe like a buffer for unknown events? So, you know, within our range, every one of these items has got a high, a low, and an average. And so there's a lot of different variables.

Expenses directly.

50 basis points of rent with their bad debt assumption include maybe like a buffer for unknown events coming up.

So within a range every one of these items has got a high and a low in an average and so.

There's a lot of different variables.

Michael Jason Bilerman: We feel that, you know, over time, we've been able to handle difficulty in the retail environment. We're in a unique spot where we do get monthly sales from our tenants, and so we're always understanding and we're in constant communication with our tenants to try to work things out if they have some problems to get them to the other side. You know, it's been fortunate that we haven't had companies go completely away in Chapter 7, you know, and so that's... We were mindful of the environment, and we feel that embedded in our current 2-4% is a reasonable amount of protection around them. Okay, thank you. Our next question is from the line of Craig McGinniss with Kosciuszko Bank. Hello, this is Fediva with Craig McGinniss.

We feel that over time, we've been able to handle.

The difficulty.

Difficulty in the retailer environment in China.

Unique spot, where we do get monthly sales from our tenants and so we're always understanding and we're in constant communication with our tenants.

To try to work out if they have some problems to get them to the other side.

It's been fortunate that we haven't had companies go completely away in chapter seven.

And so that's.

We're mindful of the environment and we feel that embedded in our current 2% to 4% is a reasonable amount of.

Protection around them.

Okay. Thank you.

Our next question is from the line of Greg Mcginniss with Scotiabank. Please proceed with your questions.

Oh, there's a sneaker fatty one with Greg Mcginniss as a quick follow up on this.

Steven Yaloff: As a quick follow-up on these temporary tenants, when you look to backfill one of those month-to-month leases, how quickly can you get a new tenant in the space and paying rent? It really depends on the center. It depends on who the user is. Okay, you know, it's The temporary space really encompasses a lot of different types of leasing throughout our portfolio. Sometimes we use, and we call it really short-term tenancy because we try a lot of new retail. First of all, there's a lot of barriers to entry into the outlet center business. You know, a lot of retailers that want to be in the business don't necessarily have 10 years' worth of excess inventory and product to sell. Therefore, they want to try it before they make a long-term commitment.

Our tenants are when you look to backfill ivano those month to month leases. How quickly you can get a new tenant in the space and paying rent.

It really depends on the center it depends on who the user is.

It's that tempts headed.

Really encompasses a lot of different types of leasing throughout our portfolio, sometimes we use.

We call it really short term tenancy.

Because we try a lot of new retail first of all there's a lot of barriers to entry to be in the outlet center business.

A lot of the retailers that want to be in the business don't necessarily have 10 years' worth of excess inventory and product to sell therefore, they want to try it before they make a long term commitment. So we use a pop up strategy, which is still embedded in that Tim.

Steven Yaloff: So we use a pop-up strategy, which is still embedded in that temporary, you know, handle that we've created to give folks an opportunity to give it a try. You know, one such tenant was Hook, which is a resource that you'll see in a lot of department stores that sell fishing gear and sporting goods. Hook decided that they had excess product, and they wanted to give it a try.

Handle that we that we've created to give folks an opportunity to give it a try.

Such tenant was hook, which is a.

Our resource that Youll see in a lot of the department stores itself fishing gear and sporting goods stores book decided that they wanted to they had excess they had excess product I wanted to give it a try these at a pop up in one of our shopping centers road with beach turned out to be a success and now they've got permanent stores across our portfolio and that that's a great story. That's that's part of how we use.

Steven Yaloff: They did a pop-up in one of our shopping centers in Rehoboth Beach, and it turned out to be a success. Now they've got permanent stores across our portfolio. And that's a great story.

Steven Yaloff: That's part of how we use temporary or short-term leases, other local retailers that may fill a space, just to keep a space warm while we're searching for a long-term tenant, or perhaps we have it leased, but the retailer isn't ready to take delivery of possession yet. We've just executed five leases with a major brand, but we haven't announced who they are yet.

Temper short term leasing other local retailers that batesville a space.

Just to keep the space warm, while we're searching for a long term tenant or perhaps.

Have at least but the retailer isn't ready to take delivery of possession, yet we've just executed five leases with our major Brad we haven't announced who they are yet.

Steven Yaloff: There are short-term tenants in all of those spaces, and when those retailers are ready to take delivery of possession, each one of those short-term leases comes with a 30-day right of termination on behalf of the landlord. We send them their notice, but we also offer them a different opportunity within the shopping center if such an opportunity exists. So it's a very fluid business. It's one that keeps the lights on.

Are we there are short term tenants and all of those spaces, where those retailers are ready to take delivery of possession. Each one of those short term leases comes with a 30 day rate of termination on behalf of the landlord, we send them their notice, but we also offer them a different opportunity within the shopping center of such an opportunity exists.

So it's a very fluid business, it's one that keeps lights on its one that keeps space is cash flowing and maintains great retail vibrancy I hate to use. This this old adage, we've been using it for years, but we feel like our customers don't know the difference between the short term retailer and full time range.

Steven Yaloff: It's one that keeps the cash flowing and maintains great retail vibrancy. You know, I hate to use this old adage. We've been using it for years, but we feel like our customers don't know the difference between a short-term retailer and a full-time retailer, but everybody knows the difference between a closed store and an open store. So as far as we're concerned, if we can keep the lights on, that short-term strategy is a great one. Yeah, that makes sense. Thank you.

Taylor, but everybody those difference between the closed store in an open store so as far as we're concerned if we can keep lights on that short term short term strategies a great one for us.

Yeah makes sense. Thank you then that probably this week.

Steven Yaloff: Then probably there's a quick update on what LeaseUp looks like and Huntsville Open Air Lifestyle Center. And probably it is broadly trying to understand whether there is an overlap in the learning curve for your leasing team in terms of leasing shopping centers versus outlets, or did you need any new people to hire, just want to understand that as well. How are you doing?

Data on how does the lease up look like in Huntsville.

Open air.

A lifestyle center and probably that is broadly.

Trying to understand whether there is an overlap in learning curve or your leasing team in terms of leaving shopping centers versus outlets or do you need any new people to hire just want to understand that as well.

How are you doing this is Justin Stein. So we're really excited about the opportunity at Huntsville, and you have to remember we are account based in this organization was which means people on the leasing team.

Justin Stein: This is Justin Stein. So, we are really excited about the opportunity at Huntsville. And you have to remember, we are account-based in this organization, which means people on the leasing team lease to a certain account, whether it's Nike or Lululemon. And so we have relationships, deep relationships with all of these retailers. And a lot of the time, the real estate directors, the heads of real estate for these companies, are the same people that we've been dealing with on the outlet channel. We also have a leasing team that has come from the tenant side of the business. So we are well equipped from a leasing, from a marketing, and an operations side to handle what's ahead of us in Huntsville. And we're really excited about it. Thank you. Our next question is from the line of Mike Mueller with JPMorgan. Yeah, hi.

To a certain account, whether it's Nike, where lulu lemon and so we have relationships deep relationships with all of these retailers and a lot of the times.

The real estate directors ahead of real estate is for these companies are the same people that we've been dealing with on the outlet channel. We also have a leasing team that has come from the tenant side of the business. So we are well equipped from a leasing from a marketing and an operation side to handle what's ahead of us in Huntsville, and we're really excited about it.

Got it thank you.

Our next question is from the line of Mike Mueller with Jpmorgan. Please proceed with your questions.

Yeah, Hi.

I understand about being opportunistic on the investment side, but I'm just curious.

Michael Jason Bilerman: I understand about being opportunistic on the investment side, but I'm just curious, when it comes to development, are you actively pursuing different developments or just looking at the higher yields that you achieved on acquisitions in the fourth quarter? The near-term focus is kind of more on that sort of deployment. Yeah, I think acquisitions. Yeah. I mean, just take a look at the going in yields on the two acquisitions that we've made. And if you also look at the replacement cost, you know, I mean, we've purchased those assets for about 40% of what you could probably build them for today. So it looks like a pretty sound strategy. I wouldn't consider our team to be turnaround specialists, but we're opportunistic. And if we see that there's an outsized growth opportunity in some of these shopping centers, those are the ones that we're going to target, and those are the ones that, Okay. Okay. Thank you. Our next question is a follow-up to the line by Flores Van Dyckum with Compass Point.

When it comes to development are you actively pursuing different developments or just looking at the higher yields that you've achieved on acquisitions in the fourth quarter. The near term focus is kind of more on that sort of deployment.

Yes, I think acquisitions, yes.

Takeaway to be going in yields on the two acquisitions that we've made and if you also look at the replacement cost.

We purchased those assets for about 40% of what you could probably build them for today. So it looks like a pretty sound strategy.

No I don't I wouldn't consider our team to be turnaround specialists, but we're opportunistic and if we see there is outsized growth a growth opportunity in some of these shopping centers.

Those are the ones that we're going to target and those are the ones that we're going to go out.

Got it okay. Thank you.

Thanks, Mike.

Thank you. Our next question a follow up for a line of Floris Van <unk> with Compass point. Please proceed with your question.

Steven Yaloff: Hey guys, a couple of follow-ups here. I note that SPG is actually your second-largest tenant, not SPG directly, but SPARC, at 3.9%. They lease 4.3%, so they've negotiated apparently pretty well in terms of paying less than what they're leasing. But if I look, at your soft luxury brands, Capri and Tapestry combined, they account for about 3% of the space and pay 5% of the rent. We don't have any LVMH and Kering, you know, the, you know, the higher end luxury brands. Steve, again, we've been saying this for a while, but maybe you can talk about what needs to happen for you to be able to attract some of those brands. And, by the way, those two control multiple brands of operators. But what does it take to get those into your centers?

Hey, guys.

Just a couple of.

Follow ups here.

Note that the SPG is actually your second largest tenants were not SPG directly but spark at three 9%.

Leased four 3% so they negotiate it pretty apparently pretty well in terms of paying less.

Less than what their leasing, but if I look at.

It's your soft luxury brands Capri and tapestry combined.

They account for about 3% of the space and pay 5% of the rents.

You don't have any L. P M H and caring.

The higher end luxury brands.

Steve.

Again, we've been saying this for a while but maybe you can talk about what needs to happen for you to be able to attract.

Some of those brand and by the way those two control multiple brands.

Of operators, but what does it take you to get those into your centers and presumably youre working on that what are the what are the things that need to happen in your view in order for you to get some of those other luxury retailers to a two tenant your properties.

Steven Yaloff: And presumably you're working on that. What are the things that need to happen, in your view, in order for you to get some of those other luxury retailers to occupy your property?

Well.

Steven Yaloff: First of all, we've seen outsized growth in the portfolio that we have. And, you know, a lot of our shopping centers, you don't, you merchandise a shopping center for the community and for the customer base. So we know who our customer is.

First of all.

We've seen outsized growth in the portfolio that we have.

And a lot of our shopping centers.

You don't you merchandise a shopping center for the community and for the customer base.

So we know who our customer is we know what their price point is and you don't want to make the mistake of bringing a customer who is shopping center regardless of price point.

Steven Yaloff: We know what their price point is, and you don't want to make the mistake of bringing a customer to a shopping center, regardless of price point, that isn't going to have a large audience to shop at and not be successful. So, you know, there's a handful of shopping centers that we think have great opportunities to be elevated. That is a road that we need to travel.

That isn't going to have a large audience to shop, it and not be successful.

So there's a handful of shopping centers that we think have great opportunity to be elevated.

That is a road that we need to travel it's going to require us building Foundation and.

Steven Yaloff: It's gonna require us building a foundation and increasing some of those, bridge to better them, which could help us support more of a luxury elevation. You mentioned, as we've said in past calls, we are in constant communication with all of those brands. We know what we need to do. We know where we need to do it.

And increasing some of those.

So bridge to better.

Then better could help us support more of a luxury elevation.

You mentioned as we've said in past calls we are in constant communication with all of those brands.

We know what we need to do we know where we need to do it we've got a strategy to execute to it and we don't think it's that far away, but it's something that we think about every day because there's a population of retailers that arent yet in our centers. There were you know it is our responsibility to make sure that we're going after them and speaking to them regularly.

Steven Yaloff: We've got a strategy to execute on it, and we don't think it's that far away, but it's something that we think about every day because there's a population of retailers that aren't yet in our centers that we, you know, it is our responsibility to make sure that we're going after them and speaking to them regularly. You know, in the meantime, there's also a population of retailers that speak directly to the sweet spot of customers that come to our shopping center. And we've done a really good job of bringing in new and diverse brands. You know, Nashville is a great example of a shopping center; 25% of that center are tenants that are brand new to Tanger or brand new to the outlet channel.

In the meantime, there is also a population of retailers that speak directly to the sweet spot of customer that comes to our shopping center.

And we've done a really good job of bringing new.

And diverse brands.

Nashville is a great example of the shopping center at 25%.

Of that center are tenants that are brand new to Tanger.

Our brand new to the outlet channel.

Steven Yaloff: And that's really where our core focus is. I think we'll ultimately get to that North Star of luxury, but in the meantime, we're going to continue to deliver revenue growth. Bye, positive RENT spreads, and we continue to grow our business with the retailers that our customer base wants to shop at. Thanks, and I guess the follow up to my follow up is, Tim Tennessee still at 10%. When could we expect that percentage? I think when we are normalized prior to COVID or prior to retail Armageddon, I think that number was around 5%. When do you see that number stabilizing or reducing going forward? And over what time period?

That's really where our core focus is.

We will ultimately get to that North star.

Luxury but in the meantime, we're going to continue to deliver revenue growth.

Positive rent spreads and continue to grow our business with the retailers that our customer base wants to shop.

Thanks, and I guess the follow up to my follow up is.

Temp tenancy still at 10% when could we expect that percentage I think more normalized prior to COVID-19 or prior to the retail Armageddon I think that number was around 5%.

Do you see.

That that number stabilizing or reducing our going forward and over what time period.

Steven Yaloff: You know, look, again, you know, when we post COVID, when we rebuild the team here at Tanger, one of our focuses was to put short-term leasing in the hands of the general managers in each one of our shopping centers. So we added 35 new tenant reps to our leasing team, one for each of the centers. Now we're up to 39.

Look again.

When when we post COVID-19 when we rebuilt the team here at Tanger, one of our focuses was to put.

Short term leasing in the hands of the general managers in each one of our shopping centers.

We added 35 do tenant rep store and leasing team one for each of the centers now we're up to 39 centers.

Steven Yaloff: So, of course, our short-term leasing pace is going to be a lot greater than it has been in the past because we have so many more people focused on it. All of that said, and as I shared earlier, we look at short-term leasing as a strategy, one that keeps the lights on, one that keeps space cash flowing, one that gives an opportunity to new retailers coming into the business to, you know, in quotes, try before they buy. And, you know, it's been a very successful strategy for us. Michael just said, "You know, if there's one square foot of vacancy here, we see that as an opportunity." We're going to constantly keep those spaces leased as best we can. Also, if I have a short-term tenant sitting in the center court in one of my shopping centers, I can release that space. I'm not going to kick the short-term tenant out of the shopping center if they want to stay. We're just going to find them a less desirable space to slide into.

So of course, our short term leasing pace is going to be a lot greater than it had been in the past because we have so many more people focusing on it.

All of that said and you know what I shared.

Earlier, when you look at short term leasing as a strategy.

One it keeps lights on one that keeps space cash flowing one that gives an opportunity to new retailers coming into the business.

In quotes try before they buy.

It's been a very successful strategy for US Michael just said you know, there's one square foot and vacancy or we see that as opportunity we're going to constantly keep those spaces leased as best we can.

Also if I have a short term tenants sitting in center court one of my shopping centers and I can re lease that space I'm not going to kick the short term tenant out of the shopping center. If they want to stay we're just going to find him a less desirable space to slide into and as we continue with.

Steven Yaloff: And as we continue to, and what that does is ultimately maintain that level of temperature, so we're going to continue to use it as a strategy. I think it's been very good for us. It's served a lot of purposes.

What that does is ultimately maintains that level of temp.

So we're going to continue to use it as a strategy I think it's been very good for US. It's served a lot of purposes.

Steven Yaloff: Obviously, rent revenue is a critical one, and we've been very successful as we've been replacing temporary space, getting great mark-to-market on the space. And, you know, a lot of that rent growth for us is embedded in that conversion. We're anxious to get there. We see it as a great opportunity, a great source of organic growth.

Obviously revenue is a critical one and we've been very successful as we've been replacing Tim.

Getting great Mark to market on the space.

And a lot of that rent growth for us is embedded in that conversion rate.

To get there, we see as a great opportunity a great source of organic growth. We also see the renewals.

Steven Yaloff: We also see renewals. A lot of those retailers that we're not going to renew and replace with new tenants, we see that as a great source of organic growth. And we are going to asset manage our centers to the best of our ability to make sure we go after every opportunity to grow revenues across our projects. But just to be clear, your guidance does not assume any reduction in temporary tenancy in your portfolio over the next 12 months. I think, I think the 10th tenancy will reduce on its own as we continue to grow that permanent tenancy. So, you know, again.

What are those retailers that were not going to renew and replace with new tenants, we see that as a great source of organic growth and we're going to asset manage our centers to the best of our ability to make sure. We go after every opportunity to grow revenues across our portfolio.

But just to be.

Clear your guidance does not assume any reduction in intent tendency in your portfolio over the next 12 months.

I think I think the 10 tenancy will reduce.

On its own as we continue to grow that permanent tenancy.

Yeah.

Again.

Steven Yaloff: That's the goal is to, we're in the permanent leasing business; we're in the long-term rent collecting business. That is our core business. We're going to use whatever strategy we can to generate revenue while we get to that North Star of full-term, long-term, high-paying, secured leases. In the meantime, we'll use whatever strategies we can to make sure that we are.

The goal is to we're in the part where the permanent leasing business for the long term rent collecting business that is our core business, we're going to use whatever strategy, we can to generate revenue, while we get to that Northstar.

Full term long term high high paying a secured leases in the meantime, we'll use whatever strategies, we can to make sure that we're.

Steven Yaloff: We're keeping the lights on and keeping cash flow in our. Thank you. Thanks, Laura.

We're keeping the lights on keeping rep.

<unk> cash flow.

In our centers.

Thanks.

Thanks, Laura.

Operator: Thank you. Our last question is from the line of Caitlin Burrows with Goldman Sachs. Hi again, everyone, maybe just a couple of quick ones before we get to the hour mark.

Our last question is from Atlanta, Caitlin Burrows with Goldman Sachs. Please proceed with your question.

Hi, everyone, maybe just a couple of quick ones before I get to the hour Mark So I'll follow up on the leasing spread topic realized that leasing spreads do you end up being somewhat a function of new investor renewal leases.

Michael Jason Bilerman: So a follow up on the leasing spread topic, realize that leasing spreads do end up being somewhat a function of new versus renewal leases. But looking at the 2210K, it looks like the 24 expirations are expected to have higher ABRs. So I'm wondering if you could just talk about the population of lease expirations in 24 and whether those do have tough comps, or maybe they're higher quality spaces, so that's not really it. So a lot of that is just the number of leases, in terms of the mix of our centers. You know, if you look in the supplemental section, there's a wide range.

Looking at the 2000 10-K, it looks like the 24 exploration are expected to have higher ADR. So I'm wondering if you could just talk about the population of lease explorations in 'twenty, four and whether you have tough comps or maybe they're higher quality spaces. So that's not really an issue.

So a lot of that is just the population of leases in terms of the mix of our centers you look in the supplemental theres a wide range. Some of those centers that are on a 10 year anniversary just have a little bit of higher rent.

Michael Jason Bilerman: Some of those centers that are on a 10-year anniversary just have a little bit of a higher rent. So it's much more about what is expiring and who's in that pool, rather than something in aggregate around our portfolio.

It's much more about.

What is expiring and who's in that pool.

Then something in aggregate around our portfolio and you are correct.

Michael Jason Bilerman: You know, our net leasing spread is going to be impacted by the amount of re-tenanting or renewal we're going to do. But we continue to believe we're going to have positive spreads overall, as we have demonstrated for the last eight quarters overall, and that is really driving our OCR, is driven by the rent increases that we've been able to attain. Got it. So when you say that, like, it's the higher expirations in 24 that are based on a mix of centers and some anniversary, perhaps when they were built again, I'm just wondering if they kind of deserve to be higher. So there's not really tough comps, or if, in reality, they are tough comps because if they were only built 10 years ago, then they were established well or something.

Our net leasing spread is going to be impacted by the amount of re tenant in our renewal we're going to do we continue to believe we're going to have a positive spreads overall as.

As we have demonstrated for the last eight quarters overall and that is really driving our OCR is driven by the rent increases that we've been able to attain.

Yeah.

Got it so when you say that like it.

Higher explorations and 24 that are based on like mix of centers in some anniversarying, perhaps when they were built.

Again, I'm just wondering if they deserve to be higher so there is not really tough comps.

In reality, they are tough comps because if they were only built 10 years ago, then they were established well or something and now maybe the upside is less.

Michael Jason Bilerman: And now maybe the upside is. Is there anything to add to that, or is it all kind of a wash? Kaitlin, the other piece of it is that that's just the base rent component. We've talked for the last couple of weeks about adding in more of the recoveries, ensuring that tenants are covering their share of CAM and taxes and our advertising fees. So the total rent is our focus. Growing total rent leads to growing NOI. The base rents by themselves can be a little skewed comparing year to year because you're not sure which in that pool are just more of a gross rent or which ones are going to be layered in with some of the recovery components.

Is there anything to add on that or it's all kind of a loss.

Caitlin the other piece of it is that that's just the base rent component we've talked for the last couple of quarters about adding in more of the recoveries, ensuring the tenants or are covering their share of cam and taxes and our advertising fees. So.

The total rent is our focus growing total rent leads to growing NOI.

The base rents by themselves it can be a little skewed comparing year to year, because youre not sure which in that pool or just more of a gross rent or which ones are going to be layered in with some of the recovery components, but our strategy is Steve and Michael talked about growing total rents continuing to.

Michael Jason Bilerman: But our strategy, as Steve and Michael have talked about, growing total rents, continuing to focus on where we can improve the rent payment in each individual space throughout all of our centers. And that is going to continue to be a focus. And as Michael mentioned, it's more of a pool issue and not necessarily a tougher comp.

Focus on where we can improve the rent paying in each individual space throughout all of our centers.

And that is going to continue to be a focus and.

As Michael mentioned, it's more of a pool issue and not necessarily a tougher comps issue.

Michael Jason Bilerman: Okay. And then maybe just following up on Flores's recent question, not necessarily on luxury, but could you guys talk about the types of tenants that are active today? Maybe those that are more legacy tenants looking to expand and who you're seeing that were perhaps new in 4Q and could be new in 24.

Okay, and then maybe just.

Following up on Florida.

Not necessarily on luxury but could you guys talked about the types of tenants that are active today, maybe those that are more legacy tenants looking to expand and who youre seeing that were perhaps nu and <unk> and it could be new in 'twenty four I think Steve earlier, you mentioned.

Justin Stein: I think Steve earlier, you mentioned doing more like home wellness, health, and beauty, but any more details you can give on who's driving this activity that you guys? Hey, Caitlin, it's Justin. We are very proud of our execution of our diversification strategy. As Steve mentioned earlier, we've done a bunch of deals in the home and beauty category, food and beverage opportunities throughout the portfolio, whether it's in our peripheral land opportunities or within the four walls of our center. We've done business with bookstores and entertainment concepts.

Getting more like home health and beauty, but any more details you can give on like who's driving this activity that you guys see.

Hey, Caitlin it's Justin.

We are very proud of our execution to our diversification strategy as Steve mentioned earlier, we've done a bunch of deals in the home and beauty category food and beverage opportunities throughout the portfolio, whether it's in our peripheral land opportunity or within the four walls of our center, we've done business with.

Bookstores and entertainment concepts so.

Justin Stein: So we are very proud of what we've done. We've brought a ton of new brands to the portfolio in 24. And we feel like that will continue into 25, bringing new brands that are finding the outlet channel as a profitable distribution point for them. And we're excited about 24 and beyond.

We are very proud of what we've done we brought a ton of new brands in the portfolio in 'twenty four and we feel that that will continue into 'twenty five bringing new brands that are that are finding the outlet channel as a profitable.

Distribution point for them and we're excited about the 24 and beyond.

Caitlin Burroughs: OK. Thanks, Caitlin. Thank you. Ladies and gentlemen, this will conclude our question and answer session and also today's teleconference. You may now disconnect your lines at this time. We thank you for your participation and have a wonderful day.

Okay. Thank you.

Thanks Caitlin.

Thank you.

Ladies and gentlemen, this will conclude our question and answer session and also today's teleconference. You may now disconnect. Your lines at this time, we thank you for your participation and have a wonderful day.