Q1 2024 Tanger Inc Earnings Call

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 first quarter 2024 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 IR website, investors.tanger.com.

Good morning, and Ashley Curtis Assistant Vice President of Investor Relations and I would like to welcome you to Tanger Inc's first quarter 2020 for a 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 IR website investors that tank our dotcom.

Ashley Curtis: 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 uncertainties. During the call, we will also discuss non-GAAP financial measures as defined by SEC Regulation G. 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.

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 uncertainty.

During the call. We will also discuss non-GAAP financial measures as defined by S. E T regulation G.

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.

Ashley Curtis: This call is being recorded for rebroadcast for a period of time in the future. As such, it is important to note that management's comments include time-sensitive information that may only be accurate as of today's date, May 1, 2024. At this time, all participants are in listen-only mode.

This call is being recorded for rebroadcast for a period of time in the future.

It is important to note that management's comments include time sensitive information that may only be accurate as of today's date may 1st 2024.

At this time all participants are in listen only mode. Following management's prepared comments the call will be opened for your questions.

Ashley Curtis: Following management's prepared comments, the call will be opened for your questions. On the call today will be Steven Yalof, President and Chief Executive Officer, and Michael Bilerman, Executive Vice President, 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 Mr. Yalof. Please go ahead.

On the call today will be Stephen Yalof, President and Chief Executive Officer, and Michael Bilerman Executive Vice President Chief Financial Officer, and Chief Investment Officer. In addition, other members of our leadership team will be available for Q&A I will now I'll turn the call over to Stephen Yalof. Please go ahead.

Okay.

Stephen J. Yalof: Thank you and good morning. I'm pleased to announce another quarter of solid performance. Last year's positive momentum carried into our first quarter, and we continue to successfully execute on our strategic initiatives. Unlocking the Embedded Value in Our Portfolio Through Our Leasing, Operating, and Marketing Efforts, and Selectively Pursuing External, In the first quarter, Same Center NOI grew by 5.2% and Core FFO per share by 13%, driven by the execution of our internal and external growth initiatives.

Stephen J. Yalof: Thank you and good morning, I'm pleased to announce another quarter of solid performance last year's positive momentum carried into our first quarter and we continue to successfully execute on our strategic initiatives.

Stephen J. Yalof: Unlocking the embedded value in our portfolio through our leasing operating and marketing efforts and selectively pursuing external growth.

Stephen J. Yalof: In the first quarter same center NOI grew by five 2% and core <unk> per share by 13% driven by the execution of our internal and external growth initiatives.

Stephen J. Yalof: Leasing volume and rent spreads are key indicators of our ability to reprice our space, and over the trailing 12 months, we leased more than 2.3 million square feet of GLA, representing nearly 20% of our portfolio, and an average increase of 13% on a comparable basis, as reflected in our rent spread. Rent spreads for the quarter were 36% for re-tenanted space and 11% for renewal.

Stephen J. Yalof: Leasing volume in rent spreads are key indicators of our ability to reprice, our space and over the trailing 12 months, we leased more than two 3 million square feet of GLA, representing nearly 20% of our portfolio and an average increase of 13% on a comparable basis as reflected in our rent spreads.

Stephen J. Yalof: Rent spreads the quarter with 36% for re tenanted space and 11% for renewals. We are pleased with the demand for space in our portfolio as we maintain a robust pipeline of deals in progress with existing best in class brands.

Stephen J. Yalof: We are pleased with the demand for space in our portfolios. We maintain a robust pipeline of deals in progress, with existing best-in-class brands and new to Tanger retailers, categories, and uses seeking to grow their business. As of March 31st, our portfolio occupancy was 96.5%, flat for the prior year period for the total portfolio, with our same center portfolio up 60 basis points. As we discussed last quarter, we continue to grow occupancy and create demand for space in our. To that end, we're focused on portfolio enhancement. Where appropriate, our leasing professionals are prioritizing re-tenanting and rightsizing over renewing selected stores in order to enhance the overall mer Utility and Shopper Experience

Stephen J. Yalof: New to Tanger retailers categories and uses seeking to grow their business with us.

As of March 31st our portfolio occupancy was 96, 5%.

Stephen J. Yalof: Lots of the prior year period for the total portfolio with our same center portfolio up 60 basis points.

Stephen J. Yalof: As we discussed last quarter, we continue to grow occupancy and create demand for space in our centers.

Stephen J. Yalof: And we're focused on portfolio enhancement.

Stephen J. Yalof: Where appropriate our leasing professionals are prioritizing returning and right sizing over renewing selected stores in order to enhance the overall merchandising mix utility and shopper experience.

Stephen J. Yalof: Over the past few years, we have seen renewal rates greater than the historical average. Today, we see our increased pricing power as a catalyst to drive higher re-tenanting activity, which may result in renewal rates returning to their previous level. Peripheral land has continued to be an important driver of incremental growth, as we continue to activate and monetize our real estate with a variety of complementary uses and attractions that add to the diversity of experiences on Center and drive both local and tourist trade.

Stephen J. Yalof: Over the past few years, we've seen renewal rates greater than historical averages.

We see our increased pricing power as a catalyst to driving higher re tendering activity, which may result in renewal rates returning to our previous levels.

Stephen J. Yalof: Peripheral land has continued to be an important driver of incremental growth as we continue to activate and monetize our real estate with a variety of complimentary uses and attractions and add to the diversity of experiences on center and drive both local and tourist trade.

Stephen J. Yalof: Additionally, the locations of our centers are benefiting from broader demographic travel and migration. We have the advantage of serving popular tourist destinations, which are also areas of the country that are experiencing elevated population and employment. This creates additional demand drivers for our centers and uniquely positions them to cater to both destination shoppers and more frequent local shoppers. These shoppers enjoy our mix of apparel and footwear retailers as well as the new categories we've added, which include food and beverage, entertainment, and health and beauty.

Stephen J. Yalof: Additionally, the locations of our centers are benefiting from broader demographic travel and migration trends, we have the advantage of serving high tourist destinations, which are also the areas of the country that are experiencing elevated population and employment growth.

Stephen J. Yalof: This creates additional demand drivers for our centers and uniquely positions them to cater to both destination shoppers and more frequent local shoppers.

Stephen J. Yalof: Shoppers enjoy our mix of apparel and footwear retailers as well as the new categories. We've added which include food and beverage entertainment and health and beauty uses.

Stephen J. Yalof: Traffic in the quarter was up slightly compared to last year, as a challenging January was impacted by weather-related closures. However, this was offset as the quarter progressed, with a stronger February and March, due in part to the earlier timing of Easter.

Traffic in the quarter was up slightly to last year as a challenging January was impacted by weather related closures. However, this was offset as the quarter progressed with a stronger February and March due in part to the earlier timing of Easter.

Stephen J. Yalof: Sales led by family apparel, athletic, and footwear brands drove an increase in trailing 12-month total portfolio sales per square foot to $437. Sequential improvement over our year-end reported, We are pleased with the integration of the three centers we added to the Tanger platform in the fourth quarter last year. Nashville continues to build momentum benefiting from tourist shopper visits and the growing local population.

Stephen J. Yalof: Sales led by family apparel Athletic footwear brands drove an increase in trailing 12 month total portfolio sales per square foot to $437, a sequential improvement over our year end reported numbers.

Stephen J. Yalof: We are pleased with the integration of the three centers, we added to the Tanger platform in the fourth quarter last year.

Stephen J. Yalof: National continues to build momentum benefiting from tourist shopper visits and the growing local population a sales and traffic continue to grow we've executed leases for most of the remaining space and look forward to welcoming these exciting retailers to Tanger Nashville.

Stephen J. Yalof: As sales and traffic continue to grow, we've executed leases for most of the remaining space and look forward to welcoming these exciting retailers to Tanger, Nashville. Both our Asheville and Huntsville centers have proven to be strong contributors and natural fits to our platform. We are executing against our strategic plans for each. New Tenant Announcements, Food and Beverage Additions, and Shopper Amenities are expected later this year. With our proven track record as operators and asset managers of open-air centers, we continue to see opportunities to selectively pursue expansion.

Stephen J. Yalof: Both our Asheville, and Huntsville Center's have proven to be strong contributors and natural fits to our platform. We are executing against our strategic plans for each with new tenant announcements food and beverage additions and shopper amenities expected later this year.

Stephen J. Yalof: With our proven track record as operators and asset managers of open air centers, we continue to see opportunities to selectively pursue expansion.

Stephen J. Yalof: Solid balance sheet position and operational expertise have provided a wider addressable market as we consider additional acquisition opportunities. We will maintain a disciplined approach, which involves leveraging our best-in-class leasing and operating platforms, as well as our retailer relationships to create value. I want to thank the Tanger team, our shoppers, retailer partners, and all of our stakeholders for their contributions and support toward our continued success. I'd now like to turn the call over to Mike. Thank you, Steve.

Stephen J. Yalof: Our solid balance sheet position and operational expertise I provided a wider addressable market as we consider additional acquisition opportunities. We will maintain a disciplined approach, which incorporates leveraging our best in class leasing and operating platform as well as our retailer relationships.

Stephen J. Yalof: <unk> value.

Stephen J. Yalof: Want to thank the Tanger team, our shoppers retailer partners and all of our stakeholders for their contributions and support toward our continued success I'd now like to turn the call over to Michael.

Michael Jason Bilerman: Today, I'm going to discuss our first quarter financial results, our balance sheet activity, and our increased guidance for the year. Overall, we continue to deliver strong financial results driven by both internal and external growth, backed by a solid balance sheet, which was further enhanced by the recent upsizing, extension, and reduced pricing on our unsecured lines of credit. In the first quarter, we delivered core FFO of $0.52 a share, compared to $0.46 a share in the first quarter of the prior year, as we saw continued solid operating growth, along with the contributions from the three new centers added in the fourth quarter.

Michael Jason Bilerman: Thank you Steve today, I'm going to discuss our first quarter financial results, our balance sheet activity and our increased guidance for the year.

Michael Jason Bilerman: Overall, we continued to deliver strong financial results driven by both internal and external growth backed by a solid balance sheet, which was further enhanced by the recent upsizing extension and reduced pricing on our unsecured lines of credit.

Michael Jason Bilerman: In the first quarter, we delivered core SSO or 52 cents a share compared to 46 cents a share in the first quarter of the prior year as we saw continued solid operating growth along with the contributions from the three new centers added in the fourth quarter.

Michael Jason Bilerman: This growth was partially offset by increased interest expense from the new interest rate swaps which became effective during the first quarter. Sane Center NOI increased 5.2% in the first quarter, driven by the robust leasing and positive rent spreads that Steve talked about, which have led to higher rental revenues from increased base rent and higher expense recovery. In addition, in the first quarter, we recognized certain expense refunds related to expenses from prior years, which were approximately one cent higher than we anticipated. This is partially offset by additional snow removal expenses compared to the milder winter in the prior year.

Michael Jason Bilerman: This growth was partially offset by increased interest expense from the new interest rate swaps, which became effective during the first quarter.

Michael Jason Bilerman: Same center NOI increased five 2% in the first quarter driven by the robust leasing and positive rent spreads that Steve talked about which has led to higher rental revenues from increased base rent and higher expense recoveries.

Michael Jason Bilerman: In addition in the first quarter, we recognized certain expense refunds related to expenses from prior year periods, which were approximately one <unk>.

Michael Jason Bilerman: Here than we anticipated.

Michael Jason Bilerman: This was partially offset by additional snow removal expenses compared to the milder winter in the prior year.

Michael Jason Bilerman: 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 dividend. At quarter end, we had an equity market capitalization of $3.4 billion and had $1.6 billion of pro rata net debt. Including the $325 million of interest rate swaps that went into effect in February of this year, approximately 93% of our total debt outstanding is at fixed rates.

Michael Jason Bilerman: Our balance sheet remains well positioned to support our internal and external growth initiatives with low leverage and largely fixed rate balance sheet minimal debt maturities until late 2026, and ample free cash flow after dividends.

At quarter end, we had an equity market capitalization of $3 $4 billion and had $1 $6 billion of pro rata net debt.

Michael Jason Bilerman: Including the $325 million of interest rate swaps that went into effect in February of this year approximately 93% of our total debt outstanding is at fixed rates.

Michael Jason Bilerman: While our net debt to adjusted EBITDA was 5.7 times at ProRat, a share for the trailing 12 months ended March 31st, 2024; Pro Forma for a full year of adjusted EBITDA for the three new centers that came online during the fourth quarter. We estimate that our leverage ratio would be between 5.2 and 5.3 times on a trailing 12-month basis, still one of the lowest in the REIT sector. At quarter end, we had $474 million of availability on our unsecured lines of credit and $23 million of pro rata cash and investments.

Michael Jason Bilerman: While our net debt to adjusted EBITDA was five seven times at pro rata share for the trailing 12 months ended March 31st 2024.

Michael Jason Bilerman: So for them or for a full year of adjusted EBITDA for the three new centers that came online during the fourth quarter, we estimate that our leverage ratio would be between five two and five three times on a trailing 12 month basis still one of the lowest in the REIT sector.

Michael Jason Bilerman: At quarter end, we had $474 million of availability on our unsecured lines of credit and $23 million of pro rata cash and investments.

Michael Jason Bilerman: Subsequent to quarter end, we were pleased to amend our lines of credit, which increased Tanger's liquidity, reduced our borrowing cost, and extended our maturity through 2029 with options further enhancing our flexibility to pursue Tanger's growth initiatives. With the amendment, our borrowing capacity increased by $100 million to $620 million, with an accordion feature to increase that capacity to 1.2 billion subject to lender approval.

Michael Jason Bilerman: Subsequent to quarter end, we were pleased to amend our lines of credit which increased hangers liquidity.

Michael Jason Bilerman: Reduced our borrowing costs.

Michael Jason Bilerman: And extended our maturity through 'twenty 'twenty nine with options further enhancing our flexibility to pursue tankers growth initiatives.

Michael Jason Bilerman: With the amendment, our borrowing capacity increased by $100 million to $620 million.

Michael Jason Bilerman: With an accordion feature to increase that capacity to 1.2 billion subject to lender approval.

Michael Jason Bilerman: In addition, our pricing grid was improved, including a 15 basis point reduction at current levels while all of our financial covenant thresholds were maintained. We were very pleased with the execution of our line recast, especially during a difficult real estate lending environment, and greatly appreciate the continued strong support from our overall lender group. Thank you for your confidence in Tanger, our gross, our credit, and our team. In April, our board approved a 5.8% increase in our dividend to $1.10 per share on an annualized basis, which lifted our dividend yield approximately 20 basis points with the shares yielding just under 4% today. Our quarterly cash dividend remains well covered with a continued low payout ratio that provides free cash flow to support our growth. In the first quarter, our dividend payout ratio was at 54%.

Michael Jason Bilerman: In addition, our pricing grid was improved including a 15 basis point reduction at current levels well all of our financial Covenant thresholds were maintained.

Michael Jason Bilerman: We were very pleased with the execution of our line recast, especially during a difficult real estate lending environment and greatly appreciate the continued strong support from our overall lender group.

Speaker Change: Thank you for your confidence and tanker.

Speaker Change: Our gross.

Speaker Change: Our credit and our team.

Speaker Change: In April our board approved a five 8% increase in our dividend to $1 10 per share on an annualized basis.

Speaker Change: Which lifted our dividend yield of approximately 20 basis points with the shares yielding just under 4% today.

Speaker Change: Our quarterly cash dividend remains well covered with a continued low payout ratio that provides free cash flow to support our growth in the first quarter, our dividend payout ratio was at 54%.

Speaker Change: Yeah.

Michael Jason Bilerman: Now turning to our increased guidance for 2024, we are increasing our core FFO per share expectations by one cent to a range of $2.03 to $2.11, or four to eight percent growth over 2023. We have increased our SANE Center NOI growth expectations by 25 basis points on both ends of the range to a new range of 2.25% to 4.25%, predominantly due to the better-than-expected expense refunds that I previously discussed. All the other expectations remain unchanged from the guidance that we provided on our year-end call.

Speaker Change: Now turning to our increased guidance for 2024.

Speaker Change: We are increasing our core <unk> per share expectations by one set to a range of $2 <unk> to $2 11.

Speaker Change: Or 4% to 8% growth over 2023.

Speaker Change: We have increased our same center NOI growth expectation by 25 basis point.

Speaker Change: On both ends of the range to a new range of two in a quarter to 4.25% predominantly due to the better than expected expense refunds that I previously discussed.

Speaker Change: All the other expectations remain unchanged from the guidance that we provided on our year end call for additional details on our key assumption. Please see our issue a release issued last night we.

Michael Jason Bilerman: For additional details on our key assumptions, please see our release issued last night. We are greatly looking forward to seeing many of our financial stakeholders at upcoming industry events and property tours. The next stop on the Tanger tour will be at Tanger Outlet Savannah, which will take place on May 7th in conjunction with Well Fargo's 27th Annual Real Estate Securities Conference, which takes place on May 8th and 9th in Florida. In addition, members of our management team will be hosting meetings at BMO's conference in New York on May 8th.

We are greatly looking forward seeing many of our financial stakeholders at upcoming industry events and property tours. The next stop on the Tanger tour will be a tanger outlet Savannah, which will take place on may 7th in conjunction with wells Fargo's, 27th annual Real estate Securities Conference, which takes place on May <unk>.

Eighth and ninth in Florida. In addition members of our management team will be hosting meetings at being most conference in New York on May eight the ICSC conference in Las Vegas on May 20th and 21st and NAREIT REIT week in New York on June 4th through the sixth with that I would now like to open up the call for <unk>.

Michael Jason Bilerman: The ICSC conference in Las Vegas on May 20th and 21st and NARIC Week in New York on June 4th through the 7th. With that, I would now like to open up the call for questions. Operator, can we take our first question?

Speaker Change: <unk> operator can we take our first question. Please.

Operator: Thank you. We will now be conducting a question and answer session. If you would like to ask a question, please press star one on your telephone keypad. A confirmation tone will indicate your line is in the question queue. We ask that you please limit yourself to one question and one follow-up question. And our first question will come from the line of Jeff Spector with Bank of America. Please proceed with your question.

Speaker Change: Thank you we will now be conducting a question and answer session. If you would like to ask a question. Please press star one on your telephone keypad, a confirmation tone will indicate your line is in the question queue. We ask that you. Please limit yourself to one question and one follow up question and our first question will come from the line of Jeff Spector with Bank of America.

Jeff Spector: Proceed with your question.

Jeff Spector: Great. Good morning, and congrats on the quarter.

Jeff Spector: Great Good morning, and congrats on the quarter. My first question just thinking about enhancing the merchandising mix I know we've discussed this but if you can maybe talk a little bit more about that are these tenants that are in outlets already.

Jeff Spector: My first question is just thinking about enhancing the merchandising mix. I know we've discussed this, but if you can maybe talk a little bit more about that. Are these tenants that are in outlets already? Are these tenants that are in, let's just say, other outlets and not yours, or maybe some are at Deer Park, but

Jeff Spector: Are these tenants that are in let's just say other outlets did not yours or maybe summer at deer park, but you're hoping to expand or maybe a combination.

Stephen J. Yalof: Good morning, Jeff, and thanks for the question. Yeah, it's a combination of all three.

Speaker Change: Good morning, gentlemen, thanks for the question Yeah, It's a combination of all.

Speaker Change: We're doing a really good job of something out new brands and retailers that haven't been in the tanger platform or havent been in outlets before.

Speaker Change: We're quite proud when we're able to bring a new retailer into the outlet space.

Stephen J. Yalof: You know, we're doing a really good job of sucking in new brands and retailers that haven't been on the Tanger platform or haven't been in outlets before. And we're quite proud when we're able to bring a new retailer into the outlet space. We've announced a number of those. We talked about Nashville, where 20% of the tenant mix in Nashville was either new to Tanger or new brands to the outlet space. We're also going after diversified uses.

Speaker Change: We've announced a number of those we talked about Nashville, where 20% of the tenant mix in Nashville were either new to Tanger and new brands to the outlet space. We're also going after diversified uses.

Stephen J. Yalof: Better restaurants, sit-down restaurants. They're moving away from food courts and moving more into a sit-down experience. We're also going after different brands for our peripheral land where we have a lot of traction, and we've signed a number of deals that we're looking forward to announcing shortly. But again, adding brand new brands, uses, and amenities to the portfolio to create a far more diverse experience because as we go after both that tourist customer and the local customer, we're looking for things for all of our shoppers to do when they come and visit.

Speaker Change: Better restaurants sit down restaurants, they're moving away from food courts are moving more into a sit down experience.

Speaker Change: We're also going after different brands for our peripheral land, where we have a we have a lot of traction signed a number of deals that we're looking forward to announcing shortly but again, adding brand new brands uses of many of these to the portfolio to create a far more diverse experience because as we go.

Speaker Change: After both the tourist customer and the local customer we're looking for things for all of our shoppers to do when they come and visit.

Stephen J. Yalof: Thank you. And then as you've been achieving this, let's say you've been working on this the past, you know, year. I know, it's a bigger part of 24. But are you bringing in a different or new customer at some of the centers where you have? You know, you know, work, you know, let's say you have brought in some of these new categories and tenants. Absolutely.

Speaker Change: Thank you and then as you been achieving this but you've been working on this the past you know you're I know, it's it's a bigger part in 'twenty four but are you, bringing in a different or new customer or some of the centers where you have.

Speaker Change: You know work you know, let's say brought in some of these new categories and tenants.

Stephen J. Yalof: Absolutely. You know, go back to Hilton Head, South Carolina, where we added Nantucket Meat and Fish. You know, it's a great example of a grocery store opening up in one of our shopping centers that's anchored by H&M and Nike. And, you know, we see a whole new set of people coming in, shopping more frequently, and, you know, staying for the brands shopping as well. We're seeing our catchment area expanded as we add these new uses, and we're seeing our frequency of visits expand as well.

Speaker Change: Absolutely you know go back to Hilton head, South Carolina, where we added Nantucket beaten fish you know it's a great example of a grocery store opening up in one of our shopping centers, that's anchored by H and M and Nike.

Speaker Change: And we see a whole new set of people coming and shopping more frequently and staying for the brands shopping as well, we're seeing our catchment area expanded as we add these new uses.

Speaker Change: Seeing our frequency of visit.

Stephen J. Yalof: So I think the strategy for us is to improve the complement of uses when you come to one of our shopping centers. I think the customer is demanding a far wider-ranging experience when they come to us, not just that traditional power shop that you get at the outlet centers of a generation ago. I think our customers are looking for far more wide-ranging uses, amenities, services, and product categories, and that's what we're going after.

Speaker Change: Expand as well so I think the strategy for us is to improve the complementary abuses when you come into one of our shopping centers I think the customer is demanding a far wider range to experience when they come to us not just as traditional powershop that you got at the outlet.

Speaker Change: Centers of.

Speaker Change: A generation ago, I think our customers are looking for far more wide ranging uses amenities services.

Speaker Change: And and product categories, and that's what we're going after and our customers are responding as you can see it in the traffic numbers as they continue to build this quarter, it's either on the sales numbers as they continue to build this quarter. So a lot of that a lot of that that strength is coming through based on a lot of the work that our leasing team has done.

Stephen J. Yalof: And our customers are responding. You can see it in the traffic numbers as they continue to build this quarter. You can see it in our sales numbers as they continue to build this quarter. So a lot of that strength is coming through based on a lot of the work that our leasing team is doing.

Speaker Change: Great. Thank you.

Speaker Change: Hi, Joe.

Craig Allen Mailman: Thank you. Our next questions come from the line of Craig Mailman with Citi. Please proceed with your question.

Speaker Change: Thank you our next questions come from sign of Craig Mailman with Citi. Please proceed with your questions.

Craig Allen Mailman: Hey, good morning. Steve, I just want to go back to the commentary about clearly retention could be, you know, up and down this year as you guys are more purposeful about re-tenanting and re-merchandising. It seemed like you emphasized that. Should we be expecting anything in the next quarter or two? so that we're not surprised here if retention drops or occupancy kind of dips in the near term. No, I don't think there'll be any surprises, but we've got into 2 to 4% safe center NRI growth. We've grown that guidance to, I think that those numbers were all contemplated in our guidance. Sorry, I said two and a half. I meant two and a quarter to four and a quarter, Craig.

Craig Allen Mailman: Hey, good morning, Steve.

Craig Allen Mailman: Steve I just want to go back to the commentary about clearly retention could be.

Craig Allen Mailman: Up and down this year as you guys are more purposeful about retesting and re merchandising. It seemed like you emphasized that should we be expecting anything in the next quarter or two so that we're not surprised here if retention drops where occupancy kind of dips in the near term.

Craig Allen Mailman: No I don't think there'll be any surprises, but we got into two of the 4% same center NOI growth, we've grown that guidance too.

Craig Allen Mailman: Two to two and a half to four and a half same thing.

Craig Allen Mailman: Why growth.

Craig Allen Mailman: That those numbers were all contemplated in our guidance.

Craig Allen Mailman: Sorry.

Craig Allen Mailman: So we have to make to the quarter to the fourth quarter.

Craig Allen Mailman: Correct.

Craig Allen Mailman: But.

Stephen J. Yalof: As far as we're concerned, I think strategically what we're looking to do is to retain 95% of our customer base on a renewal basis for the last two years. This year, we anticipate less renewal because we see some of that renewal space as an opportunity to re-tenant. We're getting over 30% spread on our re-tenanting. We're getting close to 10 to 12% on our renewal.

Craig Allen Mailman: You know as far as as far as we're concerned I think strategically what we're looking to do is it what's been retained 95% of our customer base on a renewal basis for the last two years. This year, we anticipate less renewal because we'd see some of that renewal spaces opportunity to re tenant we're getting over.

Craig Allen Mailman: 30% spreads on a re tenant them, we're getting them close to 10% to 12% on a renewal and it's a great trade for us if we can take some older retailers that we've been doing over the past 10, 15, 20 years right size them in.

Stephen J. Yalof: And it's a great trade for us if we can take some older retailers that we've been renewing over the past 10, 15, 20 years, right-size them in better locations inside our portfolio, and then replace some of that more visible space with far better retailers that are far more productive. And that's the trend; that's what we've been doing. There are a number of retailers that are gonna be brand new to our portfolio that we'll be announcing shortly that are great examples of that strategy.

Craig Allen Mailman: Locations inside our portfolio and then replace some of that.

Craig Allen Mailman: More visit.

Craig Allen Mailman: Visible space with far better retailers that are far more productive and that's been the trend. That's what we've been doing there's a number of retailers are going to be brand new to our portfolio that we'll be announcing shortly that are great.

Craig Allen Mailman: Examples of that strategy.

Stephen J. Yalof: And kind of bigger picture, I know some of these initiatives are newer, but you guys have done a lot on the digital side with the new app and that initiative there. I mean, are there any early takeaways from how customers are using it? Or I don't know if you guys are actually tracking how they're moving about through the centers, anything on that front that's helping you kind of reclaim space within your center?

Speaker Change: And kind of bigger picture I know these some of these initiatives are newer but you guys have done a lot on the digital side with the new App in and that initiative. There I mean are there any early takeaways from how customers are using it or I don't know if you guys are actually tracking kind of.

Craig Allen Mailman: How they're moving about through the centers, but.

Craig Allen Mailman: Anything on that front, that's helping you kind of reprice space within your centers.

Craig Allen Mailman: or having kind of a different take on maybe what's the more valuable space or how people are kind of approaching their shopping patterns. You know, we haven't been using our internal digital footprint in order to speak to how we value our real estate. You know, I think that our centers, the footprints of our centers are manageable enough that supply and demand certainly dictate prices. We are using our digital footprint, however, to communicate better with our shoppers and our customers.

Craig Allen Mailman: Or having kind of a different take on maybe what's the more valuable space or how people are kind of approaching their shopping patterns.

Craig Allen Mailman: We haven't been using our internal digital footprint.

Craig Allen Mailman: In order to.

Craig Allen Mailman: Speak to how to value our real estate.

Craig Allen Mailman: I think that our centers the footprints of our centers are manageable enough.

Craig Allen Mailman: That supply and demand certainly dictate it dictates that pricing we are using our digital footprint, however to communicate better with our shoppers and our customers and being in the discount space, we're able to communicate everyday values everyday discount in partnership with our retailers to get out.

Craig Allen Mailman: And being in the discount space, we're able to communicate everyday value and everyday discount in partnership with our retailers to get out in front of that. So, as an example, a lot of our competitors, a lot of full-price retail, a lot of brands that don't typically go on sale can't offer, as a catalyst to drive customers into your shopping center, an additional discount.

Craig Allen Mailman: So as an example, there are a lot of our a lot of full price retail a lot of brands that don't typically go on sale can offer as a catalyst to drive customers into your shopping center and additional discount in our space, we can and because of our great relationships with our retail partners were able to you.

Michael Jason Bilerman: In our space, we can. And because of our great relationships with our retailer partners, we're able to use the speed that digital offers to get new offers out in front of our customers and drive shoppers into our space. Michael, on Express, I know you guys lost one tenant there, and you've been pretty clear in your responses at conferences and last quarter's earnings. But from the range of outcomes that could happen there, it is a potential seven, which I know is not even being discussed really. But is that captured in the low end of the range, do you think?

Craig Allen Mailman: Use a speed that digital offers to get new offers out in front of our customers and drive shoppers into our centers.

Speaker Change: That's helpful. And then maybe just one one last one Michael on Express I know you guys lost one tenant there and you've been pretty clear in your responses at conferences and in last quarter's earnings but from the range of outcomes that could happen there kind of is a potential.

Speaker Change: Seven which I know, it's not even being discussed really but is that captured in the low end of the range, you're saying could you just kind of talk about the range of outcomes for that particular tenant as you guys kind of built up guidance.

Michael Jason Bilerman: Could you just kind of talk about the range of outcomes for that particular tenant as you guys kind of build up guidelines? Yeah, thanks, Craig. As you noted, we were ahead of this. We talked about it on the last quarterly call. We contemplated a range of outcomes in our guidance, and sort of what we know today, we continue to believe will be in that range. And it's a fluid process. I think you step back from it overall.

Michael Jason Bilerman: Yeah. Thanks, Craig.

Michael Jason Bilerman: You notice we were ahead of that as we talked about at our last quarter call. We contemplated a range of outcomes in our guidance sort of what we know today. We continue to believe we'll be in that range and it's a fluid process. Okay. Thank you.

Michael Jason Bilerman: Overall, when you go through the different processes, they're usually the last stores to close. And they also benefit from having generally low OCRs and pretty high productivity. And so I think the outlet channel during this process has demonstrated a lot of the talking points that we've been communicating and certainly over the 40-year history of this company. What do you think the OCRs are for that? You're now into overtime and have like four questions at this point. I know, I know.

Michael Jason Bilerman: If you step back from it overall.

Michael Jason Bilerman: But this is overall when you go through different processes are usually the last stores to close them and they also benefit from having generally low OCC ours in pretty high productivity and so I think the outlet channel and during this process has demonstrated a lot of the talking points.

Michael Jason Bilerman: Indicating and certainly over the 40 year history of this company.

Speaker Change: What do you think the oce ours are for that tenant.

Speaker Change: Absolutely.

Speaker Change: Youre now into overtime in like four questions at this point I know I know.

Michael Jason Bilerman: We're not going to stop. We're not going to talk about specific tenant OCRs. Our OCR for the entire portfolio is at 9.3%. As you've seen, we've been able to lift that OCR as we've been increasing our rents. So that gives you an indication overall in our portfolio that we continue to believe that our rents are below market, and we get the extra tailwind as tenant sales continue to move forward. Great. Thank you.

Speaker Change: Okay.

Speaker Change: But we're not going to talk about specific tenants ocr's LCR for the entire portfolio was at nine 3% as you've seen we've been able to lift that OCR <unk> been driving our rents. So that gives you an indication overall in our portfolio that we continue to believe that our rents are below market and we get the extra tailwind.

Speaker Change: Tenant sales.

Speaker Change: Continue to move forward.

Speaker Change: Great. Thank you.

Todd Michael Thomas: Thank you. Our next questions come from the line. I'm Todd Thomas with KeyBank Capital Markets. Please proceed with your question.

Speaker Change: Thank you. Our next question is come from the line of Todd Thomas with Keybanc Capital markets. Please proceed with your questions.

Todd Michael Thomas: Hi, thanks. Good morning.

Todd Michael Thomas: Hi, Thanks.

Todd Michael Thomas: Good morning.

Todd Michael Thomas: You know, Steve, I just wanted to go back to your comments around tenant retention and some of the potential retentening activity that you anticipate being a headwind to same store growth this year. You know, what was the renewal rate in the first quarter and any sense on how 2Q is trending? I would imagine that you have, you know, a better line of sight, you know, four or five months into the year, particularly after the holiday season, you know, with regard to some of that tenant churn that you're talking about and the potential headwind that it might have on same store growth this year. I'm just curious if you can, you know, provide a little more detail.

Todd Michael Thomas: Steve I just wanted to go back to.

Todd Michael Thomas: Your comments around tenant retention and in some of the potential re tendering activity that you anticipate being a headwind to same store growth.

Todd Michael Thomas: Growth. This year, you know what what was the renewal rate in the first quarter and any sense on how to queue is trending I would imagine that you have a better line of sight, you know four or five months into the year, particularly after the holiday season, you know with regard to some of that tenant churn that you're talking about and the potential headwind that it might have on on same store growth this year.

Speaker Change: Just curious if you can provide a little more detail.

Stephen J. Yalof: Well, I don't think it's a headwind. You know, I mean, again, it's a strategy. So, you know, it's, it's, it's easy to Renew Existing Tenants. It's a great strategy.

Todd Michael Thomas: Well I don't think it's a headwind when you get into strategy. So.

Todd Michael Thomas: It's easy.

Todd Michael Thomas: Renew existing tenants. It's a great strategy you maintained your occupancy the tenants continue to pay rent and we have been consistently getting nice growth. However for our portfolio. If you have a 10000 square foot tenant.

Stephen J. Yalof: You maintain your occupancy, the tenants continue to pay rent, and we've been consistently getting nice growth. However, for our portfolio, if you have a 10,000-square-foot tenant whose sales performance on a per-square-foot basis continues to slowly deteriorate, it's incumbent on us as merchandisers of shopping centers to make sure that we put a more productive retailer in that particular location. And even more importantly, have that retailer who's the incumbent retailer repositioned inside our center in a right-sized box, that also drives additional rent growth for us but also more productivity for that retailer. So the narrative is:

Todd Michael Thomas: Sales performance on a per square foot basis continues to slowly deteriorate.

Todd Michael Thomas: It's incumbent on us as merchandisers are shopping centers to make sure that we put up more productive retailer in that particular location.

Todd Michael Thomas: And even more importantly have that retailer who's the incumbent retailer reposition inside our center in a right sized box.

Todd Michael Thomas: So drives additional rent growth for us, but also more productivity for that retailer. So the narrative is merchandise your centers for the future make sure we're putting in the most productive retailer that we can.

Stephen J. Yalof: Merchandise your centers for the future. Make sure we're putting in the most productive retailers that we can. Making sure that the customer who comes to shop with us has a complement of products to buy that they want so they keep coming back. Making sure that we're constantly reinventing the footprint of our mall, but more importantly, reinventing the footprint of the store and forcing those retailers to really reinvent and upgrade their store build-outs as well.

Todd Michael Thomas: You can show that the customer who comes to shop with us has a compliment.

Todd Michael Thomas: Product to buy that they want so they keep coming back.

Todd Michael Thomas: Make sure that we're constantly reinventing the footprint of our mall, but more importantly are reinventing the footprint of the store and enforcing those retailers to really reinvent and upgrade their their store build outs as well I think we've been satisfied with that strategy of renewal for the past few.

Stephen J. Yalof: I think we've been satisfied with that strategy of renewal for the past few years as we've exited COVID. I think our rent spread, particularly on the retention side, has given us the courage and our conviction that we can command far more money for our space than we have. We've grown our OCRs now over the last year by 100 basis points.

Todd Michael Thomas: Ears, as we exited COVID-19 I think our rent spreads, particularly on the re tenant inside it's given us the courage and our conviction that we can command far more money for our space and we have we brought our OCR is now over the last year by 100 basis points. We still think there is room to grow and world.

Stephen J. Yalof: We still think there's room to grow, and we're a leasing company. That's what we do, and we're going to continue to do so, and the retailers are responding. Thanks to our partnership with Centennial, who's done the leasing at that project for some time. A great partnership.

Todd Michael Thomas: Leasing company, that's what we do it we're going to continue to do so and the retailers are responding we're adding those new tenants that we're talking about new uses that we're talking about a couple of examples of which you know our Huntsville, Alabama, we're thrilled to welcome worthy partner to the center. That's our first deal that we've done with more be Parker, thanks to our partner.

Todd Michael Thomas: But again, these are new brands that we're bringing into our portfolio and looking forward to expanding those brands throughout the portfolio. And that's what I think our customers want. That's what they're shopping for. That's what's going to keep them coming back.

Todd Michael Thomas: We shipped without it.

Todd Michael Thomas: Centennial Who's done the leasing at that project for some time, a great partnership but again. These are the new brands, we're bringing into our portfolio and are looking forward to expanding those breakouts throughout the portfolio and that's what I think our customer wants and that's what they're shopping for that's what's going to keep them coming back.

Stephen J. Yalof: Okay, has the renewal rate started to normalize a little bit from 95% or so down towards, you know, kind of the mid to low 80s where it has been historically?

Speaker Change: Okay. What has the renewal rate started to normalize a little bit from 95% or so down towards you know kind of the mid to low eighty's, where we're at.

Speaker Change: Has been historically.

Stephen J. Yalof: That's how we're thinking about it, and that's how we plan.

Speaker Change: And that's how we're thinking about it and that's how we planned it.

Todd Michael Thomas: Okay. And then I just wanted to follow up on, I guess, Express and maybe the range of outcomes for certain events here during the year. I think last quarter you indicated that you had about 50 basis points of bad debt reserves embedded in the 2% to 4% same-store range, which I realize was lifted this quarter by 25 basis points. But is there anything else on top of that for unexpected move-outs or bankruptcies?

Speaker Change: Okay, and then I just wanted to follow up on on I guess express and maybe the range of outcomes for certain events here during the year I'm. Just you know I think last quarter. You indicated that you had about 50 basis points of bad debt reserves embedded in the 2% to 4% same store range, which you know I realize was lifted.

Speaker Change: This quarter you know.

Speaker Change: 25 basis points it sounds like due to expense refunds, but you know is is there anything else on top of that for unexpected move outs or are bankruptcies. Because you know Michael you mentioned, some sometimes these restructurings or fluid they can take a sudden turn.

Todd Michael Thomas: Because, Michael, you mentioned sometimes these restructurings are fluid. They can take a sudden turn. And I'm just curious whether you can provide a little bit more detail around what's budgeted and what degree of confidence you have that they will emerge from bankruptcy, just given they're a top tenant, 170 basis points of ABR.

Michael Jason Bilerman: And you know I'm, just curious whether you can provide a little bit more detail around what's what's budgeted and what degree of confidence you have that they will emerge from bankruptcy just given they're a top tenant mm 170 basis points of ABR.

Michael Jason Bilerman: Sure, Todd. When we talked on the 4Q call and provided that 2 to 4% range, we did reference where our bad debt had been historically. You can see in the numbers from last year that it was around 35 basis points. But the range in bad debt, you know, when you have a 2 to 4% range, it contemplates different levels. What we've been trying to communicate is effectively our original 2 to 4 original debt guidance, which we have increased by 25 basis points due to the expense refunds that we began in the quarter.

Michael Jason Bilerman: Sure Todd.

Michael Jason Bilerman: When we talked on the <unk> call and provided a 2% to 4% range. You know, we did reference where our bad debt.

Speaker Change: Historically, you can see in the numbers from last year was around 35 basis points, but the range in bad debt.

Michael Jason Bilerman: Do you have a 2% to 4% range and contemplate different levels, but what we've been trying to communicate is effectively our two to four original guidance, which we had increased by 25 basis points due to the expense refunds that we began in the quarter.

Michael Jason Bilerman: It's still, we still feel comfortable with that range as we sit here today and contemplate the variety of outcomes that could come about. You know, we don't want to get into different alternatives, Chapter 7, Chapter 11, how a Chapter 11 process will go.

Michael Jason Bilerman: It's still we still feel comfortable with that range as we sit here today and contemplates a variety of outcomes that.

Michael Jason Bilerman: Cause come about.

Michael Jason Bilerman: We don't want to get into different alternatives.

Michael Jason Bilerman: After seven chapter 11 powered chapter 11 process will go what we know today, what's been public is.

Michael Jason Bilerman: What we know today, what's been public, is that Express came out with a store closure list. On that store closure list, there was one Tanger store out of the 30 stores that we have. And overall, there were only three outlet stores, open air outlet stores, on that list, which demonstrates to us the value of the outlet channel, the outlet platform for brands and retail.

Michael Jason Bilerman: <unk> came out with the store closure list on that store closure list. There was one tanker store out of the 30 stores that would be.

Michael Jason Bilerman: And overall there was only three outlet stores open their outlet stores on that list, which demonstrates.

Michael Jason Bilerman: To us the value of the outlet channel the outlet platform for brands and retailers.

Todd Michael Thomas: Okay, thank you.

Speaker Change: Okay. Thank you.

Caitlin Burrows: Thank you. Our next questions come from the line of Caitlin Burrows with Goldman Sachs. Please proceed with your question.

Michael Jason Bilerman: Thank you our next questions come from the line of Caitlin Burrows with Goldman Sachs. Please proceed with your questions.

Caitlin Burrows: Hi everyone, good morning. Steve, I think earlier you commented on the volume of leasing you did in the last year. I think it was 2.3 million square feet, which is pretty impressive. So as you guys consider your pipeline today, the activity, the conversation, do you think that volume of leasing activity can be sustained? And, if not, why or why not?

Caitlin Burrows: Hi, everyone. Good morning, Steve I think earlier you commented on the volume of leasing you did in the last year or two.

Caitlin Burrows: 3 million square feet, which is pretty impressive. So I think I can say your pipeline today the activity of the conversation do you think that volume of leasing activity can be sustained and I guess why or why not.

Stephen J. Yalof: I have my EVP sitting next to me, shaking his head yes. We do this because we think that there are a lot of other brands that are discovering the outlet channel. We also think as we start to allow brands that are not necessarily traditional outlet brands into our platform, they're finding that our locations and our positions within the communities that we serve are the place the customer wants to shop. So as we create these diverse mixes of retailers in our footprints, in these tourist-driven, local population-driven marketplaces that were traditionally reserved for outlets only, we've opened up the floodgates to a whole new set of uses, and that's why we're having such a great velocity of retailers and other uses that want to join them.

Michael Jason Bilerman: I have by our EVP of leasing sitting next to me shaking his head yes.

Speaker Change: We do because we think that theres a lot of other brands that are discovering the outlet channel. We also think as we starting to allow brands that are not necessarily traditional outlet brands into our platform, they're finding that in our locations and our position within the communities that we serve to be the place to the customer.

Speaker Change: Wants to shop, so as we create these diverse mix of retailers in our footprints in these tourist driven local population driven mark in places that were traditionally reserved for outlet only we've opened up the floodgates to a whole new set of users and.

Michael Jason Bilerman: That's why we're having such great velocity of our retailers and other uses that wanted to join the mix.

Caitlin Burrows: Got it. Okay. And then just on the leasing spreads, you mentioned how they are pretty impressive on the new leases, but at least this quarter, the TIs are pretty high too. So I was wondering if you or someone else could talk about the TI trends, what type of tenants are asking for what, and how you're deciding which to actually agree to fund.

Speaker Change: Got it Okay and then just on the leasing spreads you mentioned, how they are pretty impressive on the new leases, but at least this quarter entity ice are pretty eyetooth. Just wondering if you or someone else can talk about the ti trends what type of tenants are asking for what and how you're deciding which to actually agreed to fund.

Michael Jason Bilerman: So, you know, Caitlin, when you look at supplemental, the tenant allowances are relatively flat sequentially, pretty consistent with the types of retailers that are coming into the space.

Speaker Change: So Kevin when you look at our supplemental.

Speaker Change: Allowances relatively flat sequentially.

Kevin: Pretty consistent with the types of retailers that are coming into the space and if you think about you know the gross rent that we're getting $47 68 of Ta and a half years of duration.

Michael Jason Bilerman: And if you think about, you know, the gross rent that we're getting, $47 a month, the 68 of TA on eight and a half years of duration is a pretty appropriate payback period. And obviously, as a company, we think about that investment that we're making into the real estate for productivity. And in almost all cases, the tenant is putting substantial dollars in, you know, ahead of our capital that we're providing as they build out the stores. Caitlin, I know you've been out to a number of our centers, and you can see the buildouts of the re-tenanted spaces that are really strong.

Kevin: A pretty appropriate payback period, and obviously as a company, we think about that investment that we're making into the real estate.

Kevin: Activity and in almost all cases, the tenant has put a substantial dollars.

Speaker Change: Yeah, and head of our capital that we're providing as they build out the stores Caitlin I know you've been out to a number of our centers you can see the build outs of the re tenant the spaces.

Speaker Change: That are really strong.

Caitlin Burrows: Okay, I got it. Thank you.

Caitlin Burrows: Okay got it thank you.

Floris Gerbrand Hendrik Van Dijkum: Thank you. Our next questions come from the line of Floris Van Dijkum with CompassPoint. Please proceed with your question.

Speaker Change: Thank you. Our next question is come from the line of Floris Van <unk> with Compass point. Please proceed with your questions.

Michael Jason Bilerman: Hey, good morning, guys. A question on capital allocation. I, you know, I was particularly interested in the Huntsville transaction you guys executed last year. And I think you indicated you've looked at over $7 billion in assets that you underwrote. As we look forward, maybe talk about the pipeline of stuff that you're looking at and how many more of those lifestyle centers could be contemplated to be added to the portfolio over the next 18 months or so.

Floris Gerbrand Hendrik Van Dijkum: Hey, good morning, guys a question on capital allocation.

Floris Gerbrand Hendrik Van Dijkum: Uh huh.

Floris Gerbrand Hendrik Van Dijkum: Yeah, I was particularly interested in the Huntsville transaction you guys are executed.

Floris Gerbrand Hendrik Van Dijkum: Last year and I think you indicated you've looked at over $7 billion of of assets that you underwrote.

Floris Gerbrand Hendrik Van Dijkum: As we look for maybe you can talk about the pipeline of stuff that youre looking at and and you know how many more of those lifestyle centers could be contemplated to be added to the portfolio over the next you know.

Floris Gerbrand Hendrik Van Dijkum: 18 months or so.

Michael Jason Bilerman: Sure, Floris. But we step back from it by just thinking about our size, right? We're a $5 billion company. We don't need a tremendous number of transactions. We want to make sure that the transactions that we do are value-enhancing, where we can bring our operating, leasing, and marketing platform to bear. We're not a buy-and-hold company. If we're going to acquire something, we want to ensure that it fits with our strategy and where our platform can create value.

Speaker Change: Sure. So we step back from it just thinking about our size right. We're a $5 billion company, we don't need a tremendous amount of transactions. We wanted to make sure that the transactions that we do are value enhancing where we can bring our operating leasing and marketing platform.

Speaker Change: There were not a buy and hold our company if we acquire something we wanted to ensure that it fits.

Speaker Change: With our strategy and where our platform can create value. We think is part of that strategy. It's incumbent upon us to look at everything.

Michael Jason Bilerman: We think it's part of that strategy that it is incumbent upon us to look at everything, which is why we've looked at a lot of transactions so that when a Huntsville or a Nashville comes about, we can act quickly. And being able to act quickly is why the balance sheet is so well positioned to be able to go after those opportunities. So being able to have the liquidity, getting our line recast, getting additional availability, having the free cash flow, and operating at a lower leverage level allows us to be opportunistic when transactions are in the market or when there's disarray in the marketplace for us to be able to act. Our balance sheet is really clean.

Speaker Change: Which is why we've looked at a lot of transactions so that when the Huntsville or in Nashville's comes about them. We can act quick.

Speaker Change: And being able to act quickly as why the balance sheet is so well positioned to be able to go after those opportunities so being able to have the liquidity getting your line recast getting additional availability and having the free cash flow and operating at lower leverage levels allows us to be opportunistic when transactions are in the market or when there's this.

Speaker Change: The array in the marketplace for us to be able to act our balance sheet is really clean. So we have the ability to take over assets with secured debt. We have an ability to do joint ventures, we have the ability to do partnerships. There are so many different alternatives, but the most important thing that we want it.

Michael Jason Bilerman: So we have the ability to take over assets with secure debt. We also have the ability to do joint ventures. We have the ability to do partnerships. There are so many different alternatives, but the most important thing that we want to... keep in mind is that we want to be disciplined, we want to be prudent, and we want to ensure that we can create value so that when we announce transactions, we'll be able to articulate the growth that we can see as OVAP is coming to the market into our portfolio.

Speaker Change: Keep in our minds as we want to be disciplined we want to be prudent and we wanted to ensure that we can create value. So that when we announce transactions, we'll be able to articulate.

Speaker Change: The growth that we can see.

Speaker Change: Does that come into the market into our portfolio.

Floris Gerbrand Hendrik Van Dijkum: And so we should presume that you're constantly evaluating stuff, and you will not make announcements as and when you know things get agreed. Is that the right interpretation?

Speaker Change: And so we should presume that that you're constantly evaluating stuff and you will not make announcements says as and when you know things get agreed is that is that the right interpretation.

Michael Jason Bilerman: We are an active organization looking a lot of opportunities but they're going to have to be the right ones and you know there's nothing in bed in our guidance we have no we don't we don't want to set a transaction amount that's not the way we operate because you know if we find a deal we have to look at that deal finance it appropriate at that time relative to the return that we see going in and over the long over the long term and we'll keep everyone apprised as as deals come through and we're optimistic that you know we feel that this platform that's been built has the ability to own and manage additional open-air retail centers that have effective a lifestyle and outlet components

Speaker Change: We are in active organization looking a lot of opportunities, but theyre going to have to be the right ones and you know there's nothing embedded in our guidance. We have no. We don't we don't want to set a transaction amount that's not the way we operate because.

Speaker Change: If we find the deal we have to look at that deal isn't appropriate at that time relative to the return that we see going in and over the long over the long term and we'll see.

Speaker Change: Keep everyone apprised and as deals.

Speaker Change: <unk> come through.

Speaker Change: We're optimistic that.

Speaker Change: We feel that this platform that's been built has the ability to own and manage a additional open air retail centers that have effective a lifestyle and outlet component.

Floris Gerbrand Hendrik Van Dijkum: And if I can follow up, perhaps, and I know this is a question I've asked you guys in the past, but maybe you can give us a little bit of an update on your thoughts on getting more luxury-type tenants in your portfolio. Have you made any progress? Which centers are, in your view, the most likely to be the ones that receive some of that demand? And maybe think about the potential impact of having more of these types of tenants in your portfolio. What would that do to your sales productivity and to your rental levels?

Speaker Change: Great and if I can follow up perhaps an end and I know this is a question I've asked you guys in the past, but maybe if you can give us a little bit of an update on on your thoughts on on getting more luxury type tenants in your portfolio.

Speaker Change: You made any progress which centers are in your view are the most likely to be the you know the ones that receive some of that demand and it maybe think about what the potential impact of having more of these types of tenants in your portfolio, what would that do to to your sales productivity.

Speaker Change: To your to your rental levels.

Justin C. Stein: Floris, this is Justin.

Justin C. Stein: Floris, this is Justin. Thank you for the question. Yeah, we continue to evaluate all the tenants throughout our portfolio, asset by asset. And we can share with you, we recently opened Lafayette 148 in our National Harbor asset. We recently brought in Bash, a luxury tenant into Riverhead. Kate Spade recently opened in Charleston. So we continue to penetrate that elevated market case by case, center by center, and we're going to continue to chip away at that going forward.

Speaker Change: This is Justin Thank you for the question Yeah, we continue to evaluate.

Justin: All of the tenants throughout our portfolio asset by asset and when we can share that we recently opened last night at 148 International Harbor assets. We recently brought in Bash a luxury tenant into river had Kate Spade recently opened in Charleston, So we continue to.

Justin: Penetrate that elevated market a case by case center by center, and we're going to continue to chip away at that going forward.

Justin: Thanks.

Justin C. Stein: Thank you. Our next questions come from the line of Greg McGinniss with Scotiabank. Please proceed with your question.

Justin: Thank you our next questions come from the line of Greg Mcginniss with Scotiabank. Please proceed with your questions.

Greg Michael McGinniss: Hey, good morning.

Justin: Oh.

Greg Michael McGinniss: On the dividend yields, along with the payout ratio, they're one of the lowest amongst retail REITs. How are you thinking about additional dividend increases over the next few years?

Greg Michael McGinniss: On the dividend yield along with a payout ratio there one of the lowest amongst retail rates. How are you thinking about additional dividend increases over the next few years.

Michael Jason Bilerman: Thanks, Greg. Well, dividend yield is a factor of stock price, right? And so, you know, we think about our dividend level, which is obviously a board level decision. We've been able in the last number of years coming out of COVID to raise that dividend yield as our cash flow has been growing, right? We've seen considerable FFO growth, and we're sharing in that growth with our shareholders and still maintaining as low of a payout ratio as regulations, right, that allow us to because free cash flow is free.

Greg Michael McGinniss: Thanks, Greg what dividend yield as a factor of stock price right and so you know we think about our dividend level, which is obviously a board level decision, we've been able over the last number of years coming out of Covid to raise that dividend yield as our cash flow has been growing right we've seen.

Greg Michael McGinniss: Considerable <unk> growth and we're sharing in that growth with our shareholders.

Greg Michael McGinniss: Still maintaining as low of a payout ratio as REIT regulations, right that allow us to because free cash flow is free.

Greg Michael McGinniss: So that that free cash flow really helps to fund all of our internal and external growth initiatives on an effective basis and a high capital cost environment. So we.

Michael Jason Bilerman: And so that free cash flow really helps to fund all of our internal and external growth initiatives on an effective basis in a high capital cost environment. So, you know, we recently, as we noted in the release a couple of weeks ago, raised the quarterly dividend to an annualized level of $1.10 a share. The payout ratio in the first quarter was 54%. That payout ratio should trend a little bit higher just based on the timing of CapEx relative to the first quarter. And then we'll continue to evaluate how we can share in that cash flow growth.

Greg Michael McGinniss: Recently as we noted in the release in a couple of weeks ago raised the quarterly dividend to an annualized levels of dollars 10 a share.

Greg Michael McGinniss: The payout ratio in the first quarter was 54% payout ratio should trend a little bit higher just based on timing of capex relative to the first quarter and then we'll continue to evaluate them.

Greg Michael McGinniss: How we can share in that cash flow growth over time.

Greg Michael McGinniss: Okay and it provided a total return to shareholders.

Greg Michael McGinniss: Okay, that's a lot of information. Okay, but the expectation is to kind of maintain as much free cash flow as you can. Could y'all provide a bit more...

Greg Michael McGinniss: Okay. So the expectation is to kind of maintain as much free cash flow as you can understood.

Speaker Change: Could you help me Brian good morning.

Michael Jason Bilerman: We're balancing regulations and free cash flow, right? Those are the two variables that we think about.

Brian: We're balancing reregulation and free cash flow right. Those are the two variables that we think about.

Greg Michael McGinniss: Okay. Could you provide a bit more color on what you saw regarding the increasing strength from consumers through quarter end? Has that trend continued into April? And is this a situation where trailing 12-month tenant sales may see greater sequential growth in Q2?

Speaker Change: Okay.

Brian: Could you provide a bit more color on what you saw regarding the increasing strength from consumers through quarter end has that trend continued into April and if this is this a situation where trailing 12 month tenant sales may see greater a sequential growth in Q2.

Brian: Yeah.

Stephen J. Yalof: We're optimistic about the sales growth. A lot of the strategies that we're employing, which we talked about, replacing some older brands that have sales that are deteriorating with what we think are newer concepts that have great productivity ahead of them, I think are going to contribute to our sales growth. We're also doing a wonderful job from a marketing point of view. We've balanced our marketing approach to both touristic as well as localized marketing. We're going to continue to invest in local marketing in a lot of the centers. But that paradigm has shifted.

Brian: We're optimistic about it.

Brian: The sales growth a lot of the strategies that we're employing that we talked about replacing some older brands with sales that are deteriorating with what we think are newer concepts. They have a great productivity ahead of them I think is going to contribute to our sales growth. We're also doing a wonderful job from marketing point of view we've.

Brian: Balanced our marketing approach to both touristic as well as localized marketing.

Brian: We're going to continue to invest in local marketing and a lot of et cetera that that paradigm has shifted we talk about the suburbanization of.

Stephen J. Yalof: We talk about the suburbanization of America, where a lot of folks are moving to the geographies where our centers currently exist, and because of that, we're going after a whole new audience. We're also merchandizing our shopping centers to attract that audience as well. That's why we're optimistic about sales going forward. As far as the April run rate versus the March run rate, Easter was in March this year. Typically, what retailers and developers do is we lend our March and April sales to make those two comps a fair affair.

Brian: America, where a lot of folks are moving towards the geographies, where our centers currently exists and because of that we're going after holding catchment. We're also merchandising our shopping centers to attract that catchment as well. So that's why we're optimistic about sales going forward you know as far as the April run rate versus the large run rate the way Easter.

Brian: Sure. It was in March this year, typically what retailers and developers do as we blend our March and April sales debate those two comps a fairer fight.

Brian: Mhm.

Stephen J. Yalof: Okay. And with regard to some of those new concepts, are you seeing higher average tenant sales from those new offerings, and are there any categories in particular that are doing well?

Brian: Okay.

Brian: And I guess with regard some of those new concepts.

Brian: Or are you seeing higher average tenant sales from those new offerings and is there any categories. In particular that are that are doing well.

Stephen J. Yalof: Health and Beauty is really doing great. You know, we're really very pleasantly surprised by Apparel, mostly family apparel, American Eagle, and those brands just doing exceptionally well. I also think that we need discipline on our part to make sure that these stores are right-sized. You know, the old narrative in outlets was, you know, give the retailers as much space as they wanted, but as we're learning now with more efficient, faster delivery, and more efficient floor sets, a lot of our retailers can be far more productive on a per square foot basis in a far smaller footprint. And that works out great for everybody. It gives us an opportunity to have far more productive stores in a shopping center and provides a lot more variety to customers.

Brian: Health and beauty is really doing great.

Brian: We're really very pleasantly surprised with.

Brian: With apparel, mostly family apparel American Eagle and those brands just doing exceptionally well.

Speaker Change: Awesome, thank discipline on our part to make sure that these stores are right sized.

Speaker Change: Ordinarily the outlets where it.

Speaker Change: It gives the retailers as much space as they wanted but as we're learning now with more efficient with faster delivery with more efficient floor sets a lot of our retailers can be far more productive on a per square foot basis, and far far smaller footprint and that works out great for everybody gives us enough.

Speaker Change: I'm, assuming these are far more productive stores in a in a in a shopping center and provides a lot more variety of the shop.

Speaker Change: Thanks, Steve at the risk of being chastised for asking too many questions I do have one [laughter] given the strength of the balance sheet the level of retailer demand with most assets.

Greg Michael McGinniss: At the risk of being chastised for asking too many questions, I do have one more. Given the strength of the balance sheet, the level of retail or demand, with most assets in the high 90s occupancy, are there opportunities to add square footage to any of the centers? And is there any other redevelopment being considered at this time? Yes, there is.

Speaker Change: High Ninety's occupancy are there opportunities to add square footage to any of the centers and is there any other redevelopment being considered at this time.

Speaker Change: Yeah.

Stephen J. Yalof: There are. Well, there are a couple of ways that we're adding square footage to our shopping centers. I mean, there are Phase 2 locations in a number of our centers. In others, we've got... peripheral land. And our peripheral land strategy has been one that we really uncovered a couple of years ago. It takes a bit to ultimately see those spaces cash flow, but we've signed a number of deals. Arizona is a good example.

Steve: Oh, there are well Theres a couple of ways that we're adding square footage to our shopping centers I mean theres. There are phase two locations in a number of our centers are in others. We've got.

Stephen J. Yalof: We've got a Texas roadhouse that should be opening shortly that's on a piece of peripheral land that's immediately adjacent to the shopping center. So we're finding demand for peripheral land close to our centers has increased by virtue of the fact that, again, we are the regional draw in the markets that we serve, and brands, if they can't be in line, want to be adjacent to where most of the cars in that geography are being parked, and that's in our tenors.

Steve: Peripheral land a peripheral land strategy has been one that we've.

Speaker Change: Really uncovered a couple of years ago, and it takes a bit to ultimately see and can see those spaces cash flow, but we signed a number of deals Arizona. Good example, we've got a and.

Speaker Change: Texas Roadhouse that should be opening shortly that's on a piece of peripheral land. That's immediately adjacent to the shopping center. So we're finding demand for peripheral land close to our centers has heightened by virtue of the fact that again, we are the regional draw in the markets that we serve.

Samir Upadhyay Khanal: Thank you. Our next questions come from the line of Samir Khanal with Evercore ISI. Please proceed with your question.

Speaker Change: Brands, if they can't be hidden line Wanna be adjacent to where the car is where most of the cars in that geography are being parked and that's in our Tanger centers.

Speaker Change: Alright, Thanks again.

Speaker Change: Okay.

Speaker Change: Thank you our next questions come from the line of Samir Khanal with Evercore ISI. Please proceed with your questions.

Samir Upadhyay Khanal: Hey Michael, most of my questions have been answered, but on the just on the modeling side here, you know the other revenues in the income statement. I think that's, you know, ancillary income sponsorships that you've done. I know that, you know, you've tried to sort of touch many of the assets, and that line has actually grown over time. And I think in the quarter, it was maybe down year over year; I'm just trying to understand how much there is more to do on that, you know, from ancillary income, sponsorships, etc.

Samir Upadhyay Khanal: Hey, Michael It's just most of my questions have been answered but on on the just on the modeling side here. The other revenues in the income statement.

Samir Upadhyay Khanal: I think that's you know ancillary income sponsorships that you've done.

Samir Upadhyay Khanal: I know that you've tried to sort of touch many of the assets and that that line has actually grown over time and I think in the quarter. It was maybe down year over year I'm, just trying to understand how much there is more to do on that front.

Samir Upadhyay Khanal: Ancillary income sponsorships et cetera.

Michael Jason Bilerman: Thanks.

Michael Jason Bilerman: Sure. So, step back just in the first quarter. First quarter last year, our center in Westgate and Phoenix, Glendale is right beside where the Super Bowl was played, and we did a significant amount of marketing last year in the first quarter. So, that's what's affecting the year-over-year comp. Now, if we step back and go in the full year, you know, driving other incremental revenues at our centers continues to be a top priority, and we think we'll continue to have higher growth than the overall core portfolio, and that's what you'll see trend through the year as we continue to activate, drive our marketing partnerships, and a lot of the other income sources that we're able to do at our centers, just driving off of what Steve was talking about, the cars being regional draws, there's a fair amount of tenants that want to get in front of those consumers each and every day.

Speaker Change: Sure. So step back just in the first quarter first quarter last year, our center and Westgate in Phoenix, Glendale is right beside where the Super Bowl was played and we did a significant amount of marketing last year in the first quarter. So that's what's affecting the year over year comp now.

Speaker Change: Got back and go into full year <unk>.

Speaker Change: Driving other incremental revenues at our centers continues to be a top priority and we think we'll continue to have.

Speaker Change: Higher growth than the overall core portfolio and Thats, what youll see trend through the year as we continue to act.

Speaker Change: Activate.

Samir Upadhyay Khanal: Drive our marketing partnerships and a lot of the other income sources that we're able to do in our centers is driving off of what Steve was talking about the cars being regional draws there's a fair amount of tenants that want to get in front of those consumers each and every day.

Samir Upadhyay Khanal: Okay, so it seems like you can still grow that line. I think last year you were up like 12%. So that's, that double-digit growth is still the right sort of number to think about.

Speaker Change: Okay. So it seems like you can still grow that line I think last year, you grew up like 12%. So that's that's sort of the.

Samir Upadhyay Khanal: Double digit growth is that still the right sort of.

Samir Upadhyay Khanal:

Samir Upadhyay Khanal: The number to think about.

Leslie Swanson: Absolutely. This is Leslie Swanson, Chief Operating Officer.

Samir Upadhyay Khanal: Absolutely. This is Leslie Swanson, our Chief operating officer, you know, we see a modest potential and as we've outlined over the last several years, we're very very keenly focused on incremental revenue, which not only meets marketing partnerships from our sponsor shifting media perspective.

Leslie Swanson: You know, we see a lot of potential. As we've outlined over the last several years, we're very, very keenly focused on incremental revenue, which not only means marketing partnerships from a sponsorship and media perspective, but we're very committed to operational ancillary revenue streams as well. And we see a lot of that ROI come from our solar, from our EV charging. So what you're looking at in that line item is a culmination of all of those strategic efforts made by our teams across the country.

Leslie Swanson: We're very committed to operational ancillary revenue streams as well and we see a lot of that RLI come from our solar and more EV charging.

Leslie Swanson: We're looking at in that line item, it's a culmination of all of those strategic efforts made by our teams across the country.

Samir Upadhyay Khanal: Got it. And then last one for me, Michael, is the expense recovery ratio. I know that moves around a lot, and I think it was much higher this quarter. What's the right number to think about for the long term for the business?

Speaker Change: Got it and then last one for me Michael is the expense recovery ratio I know that moves around a lot and I think it was much higher this quarter, but what's kind of the rate.

Michael Jason Bilerman: Number to think about for the long term for the business.

Michael Jason Bilerman: So we think about this year in totality probably being the mid-80s, maybe up a little bit from that level. The first quarter did benefit from the expense refunds that I talked about, which reduced our off X. So, you know, your recovery rate is going to be higher because the operating expense number was down a little bit. The other factor is, you know, it is heavily seasonal. Because we moved largely to a fixed CAM structure, you know, our recoveries are generally flat-ish during the year, absent our spreads.

Michael Jason Bilerman: So we think about this year in totality probably be in the mid eighties, maybe up a little bit from that level in the first quarter did benefit from the expense refunds that I talked about which reduced our opex. So that your recovery rates can a show higher because the operating expense number was down.

Michael Jason Bilerman: A little bit.

Michael Jason Bilerman: They're in factor is it didn't heavily seasonal because we've moved largely to a fixed cam structure. Our recoveries are generally flat ish during the year absent our spreads but the operating expenses are highly variable both from controllable as well uncontrollable expenses as we talked about the last few quarters.

Michael Jason Bilerman: But operating expenses are highly variable, both for controllable as well as uncontrollable expenses. As we talked about in the last few quarters, just from a cadence during the year, you should expect the recovery rate to be higher in the first half of the year and lower in the second half of the year, as there typically is additional spend, you know, in the third and fourth quarters relative to the flat reimbursement level.

Michael Jason Bilerman: Just from a cadence during the year you should expect the recovery going to be higher in the first half of the year and lower in the second half of the year and they're typically there's additional spend in the third and fourth quarters relative to the flat reimbursement level. We are trying to drive as part of our strategy, which has been the last name.

Michael Jason Bilerman: We are trying to drive, as part of our strategy for the last number of years, total rent, which is increasing both base rent in that base rent line and higher reimbursements from the tenants, which shows up in the reimbursement line. And that's why we continue to talk about total rent growth, which all drops to NOI.

Michael Jason Bilerman: [noise] of years dry total rent, which is increasing the base rent in that case.

Michael Jason Bilerman: It's rent line and higher reimbursements from the tenants, which shows up in the reimbursement line and that's why we continue to talk about total rent growth, which all drops to NOI.

Speaker Change: That's helpful.

Samir Upadhyay Khanal: Yes, yes it is. Thank you.

Speaker Change: Yes, yes. It is thank you.

Unknown Executive: Thank you. Our next questions come from the line of Vince Tavoni with Greenstreet. Please proceed with your questions.

Speaker Change: Thank you our next questions come from the line of Vince <unk> with Green Street. Please proceed with your question.

Unknown Executive: Hi, good morning. Renewal spread turned positive during 22, while the average lease term was about three years. But sales are currently down versus 22. I'm just trying to get a sense, as you know, these leases start rolling in 24, or, excuse me, 25 and 26. It feels like renewal spreads could be a little pressured and much lower than current levels unless sales really pick up. Am I thinking about this the right way? Or is there any color you can share on how we should think about renewal spreads after this year? Once you begin anniversarying, you know, the first renewal, you know, the current team signed with the tenant.

Vince: Hi, good morning renewal spreads turned positive during 'twenty two or the average lease term was about three years, but the sales are currently down versus 22, I'm just trying to get a sense. As you know these leases start rolling in 24, excuse me 25, and 26, it feels like renewal spreads could be a little pressured and much lower than current levels.

Vince: And our sales really pick up my thinking about this the right way or is there any color you can share on how we should think about renewal spreads. After this year. Once you began anniversarying.

Vince: The first renewal the current team signed with the tenant.

Michael Jason Bilerman: When we look at a 9.3% portfolio average, and you're right, there are different vintage and market discrepancies, but we still feel that there is room throughout our portfolio for additional rental increases. And when you are going to continue to pursue those, and in situations where we feel that there aren't as many rent growth opportunities if a tenant is somewhat maxing out of its productivity level. Those are some of the opportunities that we are looking for, the re-merchandising opportunities, bringing in new tenants, creating that sense of vibrancy, additional traffic drivers, all those elements that Steve has discussed for the last few quarters.

Doug: Sure This is Doug.

Doug: When we look at at.

Doug: At nine 3% portfolio average and Youre right theres different vintage and market discrepancies, but we still feel that there is room throughout our portfolio for additional rental increases.

Doug: And when you are going to continue to pursue those and in situations, where we feel that there arent as many.

Doug: Rent growth opportunities is it kind of is somewhat maxing out of productivity level. Those are some of the opportunities that we are looking for the re merchandising opportunities, bringing in the new tenants, creating that sense of vibrancy additional traffic drivers all of those elements that I see.

Doug: <unk> discussed for the last few quarters.

Unknown Executive: Okay, no, that's fair. But just to maybe follow up, I'm just trying to think about kind of some of the basic OCR math. So let's say sales are up, you know, 5% over three years; contractual bumps are probably more than that, cumulatively. So I guess, like, do you think you'll be able to push OCRs further on a lot of these tenants? Because imagine when, you know, this new team came in place, you already accomplished that, or I'm just trying to figure out the lever, like, do you think you can continue to push OCRs to get better spread, or can you kind of keep spreading, you know, positive and attractive?

Speaker Change: Okay, No that's fair, but just to maybe follow up I'm, just trying to think about kind of some of the basic OCR math, let's say sales are up 5% over three years.

Speaker Change: Fracs will bumps are probably more than that cumulatively. So I guess like do you think you'll be able to push ocr's further on a lot of these tenants I would imagine when the new team came in place you already accomplished that or I'm, just trying to figure out the lever like do you think you can continue to push <unk> to get better spread or can kind of keep.

Speaker Change: Fred you know positive in an attractive or is it I guess I'm struggling to put the pieces together on how renewal spreads at least could you know.

Unknown Executive: Or is it, I guess that I'm struggling to put the pieces together on how renewal spreads or at least could, you know, keep staying at the current levels, because I totally agree on the new leases; there's a great remerchandising opportunity. But on the renewal side, I'm just, Yeah, I'm trying to figure out what lever you guys could pull to keep those, you know, robust at the current levels for the next few years.

Doug: Keep stay at the current levels because I totally agree on the new leases. There is a great re merchandising opportunity, but on the renewal side is where I'm like.

Fred: Yeah, I'm trying to figure out with lever you guys can pull to keep those you know robust at the current levels for the next few years.

Michael Jason Bilerman: Well, you know, we've now shown our retailers that those tenants are dying, have expiring leases, and you know, they need to be productive in order to stay in the center. So, you know, if a store is not productive, we're either going to ask them to reposition the downsides, the right sides, or we're going to replace it. So, you know, the key lever for growing rents for tenants that are renewing is the competition from the new productive retailers that are coming into the shop.

Fred: Okay.

Fred: We've now shown our retailers that those tenants.

Doug: Have expiring leases.

Doug: They need to be productive in order to stay in the center.

Doug: No.

Doug: Our store in nonproductive, we're either going to ask them to reposition downsize right size, what we're going to replace them.

Doug: So if you you know the key the key lever for growing rents for tenants that are renewing is the competition from the new and productive retailers that are coming into the shopping center.

Unknown Executive: No, that's fair. It makes sense. And then, maybe, one last one for me.

Speaker Change: No. That's fair makes sense and then maybe one last one for me.

Unknown Executive: Just how much do you think retailer inventory strategies impact demand for the outlet space? Like it seems like everyone's maybe a little tighter on inventory strategies today, but it obviously could change people could loosen up, like how does that matter at all for trends in new store openings or? Yeah, just curious to get your kind of comments and thoughts there.

Speaker Change: How do you how much do you think retailer inventory strategies impact demand for the outlet space like it seems like everyone, maybe a little tighter on inventory strategies today, but obviously could change if you will can loosen up like how does that matter at all for trends and new store opening or I'm, just curious to get your.

Speaker Change: Comments and thoughts there.

Stephen J. Yalof: Yeah, you know, look, I think a lot of brands are using outlets as a strategy to do a number of different things. You know, it's from clear excess inventory.

Speaker Change: Yeah, you know what.

Speaker Change: Think a lot of brands are using outlet as a strategy to do a number of different things you know it's from clear excess inventory and look if you don't do that if you have any immediate excess inventory issue youre not going to do a 10 year lease in an outlet center to clear what you what might be a year's worth of excess.

Stephen J. Yalof: And look, if you have an immediate excess inventory issue, you're not going to do a 10 year lease in an outlet center to clear what might be a year's worth of excess. Hence, we have a pop-up strategy to allow a lot of our retailers to come in and sell through that inventory. And, you know, that gives them an opportunity to have a taste of what the outlet center business is.

Speaker Change: Hence we have a pop up strategy to allow a lot of our retailers to come in and sell through that inventory.

Stephen J. Yalof: You know, we've done that with a number of brands, direct to consumer brands, but they have become some of the faster growing brands within our portfolio. We also have other retailers that are always going to look at our platform because there's an aspirational customer that shops on our platform that may not shop those particular brands in any other channel. So it's the first point of entry for a retailer to engage a new consumer and then ultimately trade them up through their ecosystem. So, you know, we could talk chapter and verse about the dozens of different reasons why brands use the outlet as a strategy, but those are sort of two strategies on either end of that.

Speaker Change: You know thats give them an opportunity to have a taste of what the outlet center business is you know we've done that with a number of brands direct to consumer brands that have become some of the faster growing brands within our portfolio.

Speaker Change: Also have other retailers that are always going to look at outlet because theres, an aspirational customer that shops our platform there.

Speaker Change: May not shop, those particular brands in any other channel. So it was the first point of entry for a retailer to engage in new consumer and then also there'll be trained them up through their ecosystem.

Speaker Change: So we could talk chapter and verse about the dozens of different reasons why brands used outlet as a strategy, but those are sort of choose strategies at either end of that spectrum.

Unknown Executive: No, that's helpful. Thank you. Appreciate the time. Thank you. Our next questions come from the line of Mike Mueller with JP Morgan. Please proceed with your question. Yeah, hi, just a quick follow-up on the peripheral land strategy.

Speaker Change: No. That's helpful. Thank you appreciate the time.

Michael William Mueller: Thank you. Our next questions come from the line of Mike Mueller with J.P. Morgan. Please proceed with your questions. Yeah, hi, just a quick follow up on

Speaker Change: Thank you. Our next question is come from the line of Mike Mueller with JP Morgan. Please proceed with your questions.

Michael William Mueller: Yeah, Hi, just a quick follow up on the peripheral land strategy.

Michael William Mueller: For clarification is this land that you already own and are developing or is it unused land next to a center that you don't own that you're trying to acquire and ultimately put something on and and if it's where have you already own how many centers do you have that ability at today.

Operator: Hey Mike, it's Justin. Thank you for the question. Primarily, it's land that we already own. We've been doing a good job of activating and monetizing that peripheral land over the last 24 to 36 months. Steve mentioned some of the brands that we brought in at Texas Roadhouse and Westgate. We also recently opened a Planet Fitness at Savannah and a Seven Brews coffee shop at our Myrtle Beach asset.

Michael William Mueller: Hey, Mike, It's Justin and thank you for the question.

Mike: Primarily and plan that we already own a we've been doing a good job.

Justin: Activating and monetizing that in personal and over the last.

Justin: 24 to 36 months, Steve mentioned.

Justin: Some of the brands that we brought in a Texas Roadhouse and Westgate. We also recently executed a planet fitness at Savannah.

Justin: Seven Bruce coffee shop in our Myrtle Beach asset we.

Justin C. Stein: We believe very heavily in our peripheral land. We believe that there's a tremendous amount of opportunity. We recently brought somebody additional onto the team this week. That's how much we believe in what we can do with our excess land. And as far as how many assets we have, we feel that there's probably opportunity on our peripheral land in a little bit over half of our assets.

Justin: Believe very heavily in our peripheral land, we believe that there's tremendous amount of opportunity we see.

Justin: They brought somebody additional lines to the team. This week, that's how much we believe.

Justin: And what we can do with our excess land and as far as how many assets, we feel that there's probably opportunity on a peripheral land in a little bit over half of our assets.

Speaker Change: Got it okay that was it thank you.

Operator: Thank you. We have reached the end of our question and answer session, and with that, that does conclude today's teleconference. We appreciate your participation. You may disconnect at this time and enjoy the rest of your day.

Speaker Change: Thank you we have reached the end of our question and answer session and with that that does conclude today's teleconference. We appreciate your participation you may disconnect at this time and enjoy the rest of your day.

Justin: Okay.

Justin: Okay.

Justin: [music].

Justin: Mhm.

Justin: [music].

Justin: Okay.

Justin: Okay.

Greg Mcginniss: [music].