Tanger Inc.

good morning this is cindy holt senior vice president of finance and investor relations and i'd like to welcome you to the tanger factory outlet center's third quarter 2021 conference call yesterday evening we issued our earnings release as well as our supplemental information package and investor presentation this information is available on our investor relations website investors.tangeroutlets.com please note that during this conference call some of management's comments will be 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, including funds from operations, or FFO, core FFO, same-center net operating income, adjusted EBITDA, and net debt. 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, November 2, 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're happy for you to re-queue for additional questions. On the call today will be Steven Tanger, our Executive Chair, Steven Yaloff, Chief Executive Officer, and Jim Williams, Executive Vice President and Chief Financial Officer. I will now turn the call over to Steven Tanger. Please go ahead, Steve.

Good morning and thank you for joining us for our third quarter 2021 earnings call. We had a great quarter as a result of improvements in occupancy, rent spreads and sales. These all contributed to earnings which exceeded our expectations and an increase in our guidance for the remainder of the year. Our proactive capital market success has also positioned us well with low leverage, ample liquidity, and exciting potential growth opportunities. I am proud of the tireless efforts of the entire Tanger team who are successfully delivering our strategic objectives. I will now turn the call over to Steve Yala to provide additional details. Thank you, Steve.

We delivered strong performance in the third quarter, and the continued momentum we are demonstrating across our portfolio supports our decision to increase our guidance for the year. The successful execution of our strategic plan is evident across all of our key metrics, including occupancy, rent spreads, tenant sales, and our focus on driving non-rental revenues, all of which continue to contribute to core FFO growth. Our portfolio occupancy has returned to pre-pandemic levels despite having recaptured over 1 million square feet due to bankruptcies and brand-wide restructurings since the beginning of 2020. This includes 55,000 square feet recaptured in the third quarter as anticipated. As of September 30th, occupancy was 94.3%, up 140 basis points year-over-year, and up 130 basis points since the end of the second quarter. With regard to rent spreads, we continue to see positive momentum for leases that commenced in the 12 months ended September 30th. Blended average rates improved by 240 basis points on a cash basis compared to the 12 months ended June 30th. Spreads have improved each quarter this year, And we believe that the continued improvement we are seeing in traffic and sales will help sustain this trend. We also benefited from significant percentage rental growth this quarter, which was more than two and a half times the comparable 2019 period. During the height of the pandemic, we renegotiated select leases with an aim to trade value for value. In some cases, trading base rent for a larger variable rent component. In many cases, reducing breakpoints and increasing variable rent pay rates are now producing total rents that exceed the prior contractual fixed rents. Our rent spreads don't capture percentage rent contributions, as spreads measure the change in base rent and common area charges only. But the strong variable rent component has contributed to our core FFO growth. Additionally, as we continue to negotiate renewals on these leases, we're focused on converting some of the variable upside into base rents, which provide longer-term certainty. In light of the improving trends, we're being strategic in our renewal and permanent leasing activity. Renewals executed or in process represented 68% of the space scheduled to expire during the year, compared to 72% at this time last year. Shorter-term leases remain an effective approach to fill space and attract new tenants, while preserving longer-term upside in the ability to push rates on permanent leases as the environment is becoming more favorable. Traffic for the quarter was approximately 99% of the same period in 2019. We saw a slight downturn in August in part due to concerns over the Delta variant and the timing of Labor Day, but September traffic returned to pre-pandemic levels. Tenant sales accelerated in the quarter, reaching an all-time high of $448 per square foot for the consolidated portfolio for the 12 months ended September 30th, representing an increase of more than 13% over the comparable 2019 period. The key objective underlying our leasing strategy is to maximize NOI. While shorter-term leasing will continue to be a strategy, Our goal is to convert this space to permanent deals over time as conditions improve, retaining the current tenant with higher rent or repopulating the space. We also continue to focus on growing our non-apparel and footwear tenant base and have added multiple new brands and categories to our portfolio this quarter. Key categories include furniture and home goods and wellness and beauty. We have also focused on growing our food offerings, adding numerous sit-downs, quick serve, and grab-and-go concepts across our portfolio. And we are growing the presence of entertainment stores, kiosks, and amenities aimed at driving shopper visits, frequency, dwell time, and ultimately larger spend. These new uses are presenting both on-center and in our out-parcel and peripheral real estate. We are seeing traction with non-rental revenues. This is an area with growth opportunity as it is still in the early stages as a focus for Tanger. Marketing partnerships in the form of sponsored, on-site events, activations, and advertising provide an opportunity for retailers to interact and communicate with the tens of millions of customers that shop our centers annually. Our Labor Day block party activations, for example, were sponsored by international brands such as Unilever, Tesla, and Heineken, and we are planning similar events in the fourth quarter around holiday themes and tree lightings. Events like these not only improve traffic and dwell time, but also generate revenue. This revenue is captured in the other revenues line, which for the third quarter has doubled the contribution from 2020 and increased 38% over 2019. This has proven to be a profitable initiative with plenty of additional opportunity, and we plan to grow this program across our portfolio. Our digital channels, including our website, app, and social channels, complement our on-center experience and help to attract new customers, particularly in young demographics. Activations and shopper amenities, such as Virtual Shopper and our web-hosted flash sales, continue to engage and draw a younger consumer while providing an omni-channel experience for our core shopper base and important Tanger Club members. Our Tanger fashion director is leading these programs and will continue to do so for us through the holiday season. As we look ahead to holiday shopping, we are encouraged. In partnership with our retailers, we are starting early. Holidays began at Tanger on November 1st, and we are underway running campaigns, programs, and events to encourage early shopping. Many retailers across the country are facing potential logistics and staffing issues, but are proactively navigating this situation. Although the impact of labor and supply chain is unknown, we are optimistic with regard to our ability to deliver an exciting and fulfilling holiday experience to our customers and guests. In summary, we continue to execute on our strategic plan, focus on our core business, and create value by unlocking new revenue opportunities across our portfolio. We are enthusiastic with our positive leasing momentum and are encouraged by the new brands and categories we are adding to our centers. We're innovating and reaching our shoppers where they want to be, offering additional ways to engage and interact with new products and to shop. We continue to see traffic, sales, leasing, and business development results improve. We're on a clear path to sustained, same-center NOI growth, and along with our new long-term growth initiatives and operational efficiencies, we believe we have a compelling opportunity to create value over time. 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. Thank you, Steve.