Tanger Factory Outlet Centers Inc., demonstrating the continued popularity of outlet shopping while most of retailing drags, reported net income available to common shareholders increased 192.3 percent to 76 cents a share, or $72.7 million, for the second quarter ended June 30.
That compared with 26 cents per share, or $24.2 million, for the year-ago quarter.
In the six-month period, Tanger’s net income increased 67.7 percent to $1.04 per share, or $99.5 million, from $0.62 per share, or $58.3 million.
Net income for both periods was positively impacted by a $49.3 million gain related to the acquisition of a partners’ ownership interests in Tanger Outlets Westgate, an upscale outlet center located in Glendale, Ariz., a $4.9 million gain from the sale of the company’s outlet center in Fort Myers, Fla.
Adjusted funds from operations, or AFFO, available to common shareholders for the most recent quarter increased 9.3 percent to $0.59 per share, or $59.4 million, from $0.54 per share, or $54.1 million.
For the six months, AFFO available to common shareholders increased 10.6 percent to $1.15 per share, or $115.2 million, from $1.04 per share, or $103.9 million, for the six months ended June 30, 2015.
“We continued to execute our multifaceted long-term growth strategy during the second quarter of 2016, incorporating development, acquisition and rental rate increases within our core portfolio to expand our platform and increase shareholder value. During the quarter, we opened a new Tanger Outlet Center, acquired our partners’ ownership interests in another, and extended the same center net operating income growth streak for our consolidated portfolio to 51 consecutive quarters,” said Steven B. Tanger, president and chief executive officer. “On June 24, the newest Tanger Outlet Center opened 95 percent leased in the Columbus, Ohio, market. As a result of overwhelming shopper response, standstill traffic stretched several miles from the center’s freeway off ramp on Interstate 71 during much of the opening weekend.”
Tanger had an occupancy rate of 96.9 percent at the end of last quarter, compared to 96.8 percent at the close of the year-ago quarter. Average tenant sales for the consolidated portfolio for the rolling 12 months ended June 30, were $395 per square foot, even with the 12 months ended June 30, 2015.
During the six-month period, Tanger executed 298 leases totaling 1,236,000 square feet. The outlet developer was able to achieve a 20.2 percent increase in average base rental rates.
Lease renewals accounted for approximately 934,000 square feet, which generated a 17.4 percent increase in average base rental rates.
As of June 30, Tanger had leases executed or in process for 77 percent of the consolidated portfolio space scheduled to expire by year-end, compared to 72 percent as of June 30, 2015. Re-tenanted space accounted for the remaining 302,000 square feet, with an increase in average base rental rates of 27.9 percent.
Tanger, a publicly traded REIT based in Greensboro, N.C., operates, owns or has an interest in 43 upscale outlet shopping centers and one additional center under construction.