Tanger Inc.

and uncertainties. During the call, we will also discuss non-GAAP financial measures as defined by SEC Regulation G, including funds from operations or FFO, core FFO, same center net operating income, and adjusted EBITDA. Reconciliations of these non-GAAP measures to the most directly comparable GAAP financial measures are included in our earnings release and in our supplemental information. This 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, August 4, 2021. At this time, all participants are in listen-only mode. Following management's prepared comments, the call will be open for your questions. We request that everyone ask only one question and one follow-up to allow as many of you as possible to ask questions. If time permits, we are happy for you to reach here for additional questions. On the call today will be Stephen Tanger, Executive Chair, Stephen Yaloff, Chief Executive Officer, and Jim Williams, Executive Vice President and Chief Financial Officer. I will now turn the call over to Stephen Tanger. Please go ahead, Steve.

Good morning, and thank you for joining us for our second quarter 2021 earnings call. These results demonstrate the successful execution of our strategic initiatives and progress in continuing to evolve Tanger to drive improved profitability and shareholder value. We have seen traffic and sales return to pre-pandemic levels as our open air centers offer an excellent value proposition for both retailers and shoppers. I would also like to welcome Sandeep Mathrani to Tanger's Board of Directors. Sandeep is currently the CEO of WeWork and previously was CEO of Brookfield Properties Retail Group and of GGP. We are privileged to benefit from his experience and wisdom and look forward to his ongoing counsel and guidance. I will now turn the call over to Steve Yala. to provide details on our second quarter performance and to discuss our strategic priorities.

Thank you, Steve. Our second quarter results demonstrate continued progress in the leasing, operating, and marketing of our open air retail centers. Tenant sales and domestic traffic are now outpacing pre-pandemic levels. We've achieved a 130 basis points sequential increase in occupancy. and a meaningful rebound in Same Center NOI. We are curating a compelling mix of brands and uses, creating a sense of place for experiential outings, connecting with shoppers in more personalized ways, and monetizing the non-store elements of our centers. Same Center NOI in the second quarter was up 88% compared to the second quarter of 2020 and represents 93% of the same period in 2019. For the second quarter, traffic to our domestic centers was above the same period of 2019. This sustained rebound in traffic levels clearly reflects the attraction of our open-air shopping centers, their dominant market locations, and the value proposition that we offer to both our retailer partners and shoppers. Tenant sales have followed a similar trajectory. Average tenant sales productivity grew to $424 per square foot for the trailing 12 months, up 7.3% from $395 per square foot for the comparable 2019 period. On the same center basis, average tenant sales increased 5.5%. Categories that are performing particularly well include athleisure, youth-oriented brands, jewelry, accessories, beauty, and home. Consolidated portfolio occupancy at quarter end was 93%, a 130 basis point increase from the end of the first quarter. We have recaptured 80,000 square feet of space due to bankruptcies and retailer restructurings through the end of the second quarter. And shortly after, we recaptured an additional 55,000 square feet, which was expected and represents negotiated early terminations for a legacy outlet brand. where we collected lease termination fees. When we were unable to achieve desired rents, our strategic approach to leasing included shortening term to enable us to reprice or repopulate our real estate sooner and preserving variable rent upside by reducing breakpoints and increasing variable rent pay rates. Some deals that were completed during the height of COVID uncertainty ultimately produced total rents that exceeded the prior contractual fixed rents. In these cases, our rent spreads don't fully capture variable rent contributions as spreads measure the change in base rent and common area charges only. Leasing activity continues to accelerate, with over 300 new leases and renewals totaling 1.6 million square feet of leasing that commenced during the last 12 months. As of the end of the quarter, renewals executed or in process represented 54% of the space scheduled to expire during the year. This pace reflects our strategy to hold on some of our renewal leasing activity while the market continues to rebound and rental rates improve. This has proven sound as our sales and traffic continue to build. We continue to gain ground on our lease spreads, which represent sequential improvements from those reported as of the end of the first quarter. Permanent leasing activity is continuing to build, and we continue to pursue pop-up leases as a near-term strategy. These transactions contribute to occupancy, higher cash flow, help maintain the variety and vibrancy of our centers, and provide us an opportunity to increase the value of our real estate as market conditions continue to improve. The core tendency of our portfolio remains apparel and footwear. However, we are continuing to realize the tremendous appeal our centers offer to new categories and uses. The addition of new food concepts, such as sit-down restaurants, iconic cookie and cupcake brands, local microbreweries, and upscale gourmet grocers have added to our placemaking, experiential activation, and entertaining uses which have helped achieve our goal of driving shopper visits, frequency, dwell time, and ultimately bigger baskets. Welcoming these new uses to Tanger has provided the opportunity for our retailer partners to introduce their brands and concepts to a whole new shopper base. Additionally, as part of our ESG strategy, this year we launched our small business initiative aimed at supporting up and coming retailers in our local communities. Through this program, we've discovered compelling new retailers and brands which have enhanced our tenant mix and provided us access to new shoppers. We're focused on growing our non-store revenue streams which are delivering promising results. These initiatives include creating on-site paid sponsorship and media opportunities where brands can promote their business on-center but outside the four walls of their store. This includes marketing opportunities on bright walls, digital directories, and common area activations. In addition to providing more on-center branding, these programs and activations create fun ways to engage our shoppers during their visits. This revenue is captured in the other revenues line, which year-to-date is up 88% from last year and 26% over 2019. As we continue to monetize our real estate and create additional revenue streams, we've stood up a peripheral land team to take advantage of our existing portfolio about parcels and ancillary land. We presently have peripheral land inventory at over two-thirds of our centers and will opportunistically acquire additional parcels as leasing demand for these property types increase. As an example, we have recently acquired an adjacent parcel to our Glendale, Arizona shopping center to expand our footprint at that center and provide more F&B, and entertainment uses, as well as additional pay for event parking. We continue to enhance and expand our digital initiatives as we execute our strategy to meet our customer where they are. To further develop seamless customer experiences that connect our digital and physical space, we're expanding our online pre-shop capabilities where customers can search and see products that are available in store in our centers. Through our virtual shopper program, customers can shop remotely and either pick up in-store or have merchandise shipped directly to them. We also continue to grow our Tanger Flash pop-up sales and live sales through our website, app, and social channels, which we host with participating retailers as we innovate and discover ways to reach customers. Through all of our digital channels, we are providing more personalized and relevant content, and this quarter, we have introduced our Tanger Fashion Director who shops our brands and retailers, curates looks, and posts them on our social media channels. This initiative is aimed at our loyal Tanger insiders and Tanger Club members who shop our centers with greater frequency and is designed to reach new and emerging shoppers to the brand. By providing more enriched and visual content for the center, our goal is to drive higher frequency of shopper visits and more engagement with our virtual shopper. These digital touchpoints complement our on-center experience and help to attract new customers, particularly in younger demographics. In summary, we continue to execute our strategic plan and focus on our core business. We are delivering new leasing and actively pursuing new uses, new brands, and new categories with the goal of increasing center occupancy. We continue to grow and build our new revenue streams, such as paid media, sponsorship, and peripheral land, and we are innovating new ways to reach our customer to drive center visits. We are seeing our traffic, leasing, and business development results improving rapidly, and we are positioned to use this momentum to increase the value of our real estate, drive cash flow, and deliver long-term growth. I would now like to turn the call over to Jim Williams to take you through our financial results, balance sheet, and outlook for the remainder of 2021.