Singerman and TORG acquire four Tanger Outlets
A real estate transaction’s a good deal when both parties are happy. This week, Tanger Outlets was happy to dispose of four underperforming assets, and Singerman Real Estate and The Outlet Resource Group were overjoyed to acquire them.
The SRE/TORG outlet portfolio expanded by 200% with its acquisition of Tanger Outlets in Nags Head, N.C., Park City, Utah, Ocean City, Md., and Williamsburg, Iowa. Along with its two other outlet centers in Oklahoma City and Lincoln City, Ore., the gross leasable area of the now six-store portfolio adds up to more than 1.5 million sq. ft.
Tanger decided to sell the four because of poor performance in several key indicators. Average sales per sq. ft. at the centers was $295 compared to an average of $385 for the Tanger portfolio as a whole.
“By completing these asset sales, we are strengthening the overall quality, reducing the average age, and improving the longer-term growth profile of the portfolio,” said CEO Steven B. Tanger in a statement.
But TORG principal David Hinkle, who was on-site at the Park City Outlet, told Chain Store Age that his group envisioned growth potential at each of the acquired properties following renovations and re-tenanting.
“Three of these centers are in areas that draw lots of tourists, and we find that these locations are where we see the best traffic and longest dwell times,” Hinkle said.
Hinkle noted that all the centers already had popular tenants like Nike, Polo, and Tommy Hilfiger. The Williamsburg Outlet, which is the only one of the group not in a tourist town, has the only Columbia outlet store in the state of Iowa.
TORG, which handles leasing and marketing for the outlet group, will seek to add more dining and entertainment elements to the Tanger centers in order to give tourists and locals what they want.
“Sometimes it’s hard for senior management at bigger companies to focus on individual centers in the portfolio. But we take a boots-on-the-ground approach and develop marketing and leasing plans for each center. We immerse ourselves into each asset,” Hinkle said.
Large, publicly traded companies like Tanger, meanwhile, tend to immerse themselves in balance sheets. Tanger stated it would use the $128.7 million of net proceeds from the sale to repay balances under its line of credit. The company also stated it expected to post a gain of $44 million for the first quarter as a result of the sale.
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