Tanger Inc.

Good morning, this is Ashley Curtis, and I would like to welcome you to the Tanger Factory Outlet Center's first quarter 2023 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 the 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, funds available for distribution, or FAD, sustained center net operating income, adjusted EBITDA RE, 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, April 28, 2023. At this time, all participants are in listen-only mode. Following management's prepared comments, the call will be opened 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 re-queue for additional questions. On the call today will be Stephen Tanger, our Executive Chair, Stephen Yaloff, President and Chief Executive Officer, and Michael Billerman, 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 Steven Tanger. Please go ahead, Steve.

Good morning, and thank you for joining us for our first quarter 2023 earnings call. We had a very strong start to the year as we outperformed our expectations. Next month, we will be celebrating 30 years as a publicly traded company and to mark that milestone, we will be ringing the closing bell on the New York Stock Exchange on May 10th. It has been an incredible journey where Tanger Stock has delivered an above market total shareholder return. Looking forward, we remain confident in our optimistic outlook as the team continues to execute on its growth strategy. I'll now turn the call over to Steve Yaloff.

Thanks, Steve, and good morning. I'm pleased to report another quarter of growth as we have delivered positive results ahead of our expectations. Thames Center NOI grew by 7.4% driven by robust leasing activity and expense management due in part to a mild winter. We continue to execute to our key strategic initiative of leveraging our platform to deliver reliable earnings and attractive growth opportunities. Leasing activity remains strong. We ended the quarter with occupancy of 96.5%, a 220 basis point improvement over the prior year. This reflects our leasing team's commitment to locking in higher fixed rents and expense recovery, extending lease terms, elevating and diversifying our tenancy, and maintaining high occupancy. We delivered improved rent spreads for the eighth consecutive quarter with our blended average rental rates increasing 13.8% for the trailing 12 months ending March 31st, 2023. This represents a sequential improvement of 370 basis points of rent spread growth and up over 10 times from the 1.3% spread we reported in the first quarter of 2022. Retenanting spreads grew 36.1% and renewal rent spreads grew 11.8%. Our ability to drive solid increases in renewal rents is the clearest demonstration of our retailer's commitment to the outlet channel and our ability to capture rent upside. This is further demonstrated by our higher occupancy cost, which as of the end of the quarter was 8.8% of 20 basis points sequentially. As of the end of the first quarter, renewals executed or in process represented 57% of leases expiring this year, approximately 10 percentage points ahead of last year, and at double-digit rent spreads. Sales and traffic continued to gain positive momentum. Traffic for the quarter was up 60 basis points compared to the prior year's first quarter. Total gross sales grew in the first quarter of 2023 from the prior year quarter. our average tenant sales for the trailing 12 months also improved sequentially from the end of the fourth quarter to $447 per square foot for the period ended March 31st, 2023. This sequential improvement is driven mainly by stabilizing trends in our core retailers, plus productivity gains derived from our new partners that are outperforming brands or stores that have exited our portfolio. Our results also reflect the continued improvement to our marketing programs, which focus on media spend with clear, measurable results designed to drive traffic and sales. We're focused on digital media, which provides a more targeted reach with greater efficiency. We have added digital assets to all of our centers, including digital directories, tenant signage, and easily identified QR technology directing customers to our Tanger Digital Channels and our virtual shopper services platform. Our enhanced platform provides shoppers with amenities and same-day access to everyday and limited-time promotional offers from our retailers, plus the ability to earn personalized retailer-funded incentives as they continue to shop with us. As shoppers turn to our digital services, we can increasingly personalize their experience. We continue to leverage our media platform, which provides a unique revenue opportunity to Tanger, given the scale and quality of our audience. In the first quarter, we enjoyed great success on Super Bowl weekend at our Glendale, Arizona shopping center, securing campaigns from national brands such as Nike and Under Armour, as well as the NFL, which hosted a game day tailgate party on our site. Beyond adding more F&B and experiential retailers, we also continue to improve and update shopper amenities. and are investing in sustainable onsite initiatives across our portfolio. These investments accomplish multiple objectives. In addition to improving the shopper's onsite experience, we continue to drive operational efficiencies, revenue generation, and environmental benefits. A few examples include our state-of-the-art security enhancements, growing electric security vehicle fleet, and increased solar and electric vehicle charging capacity. Finally, we continue to make leasing and construction progress on our Nashville development, where we are over 90% lease committed and anticipate our grand opening this fall. I'm proud of our team and the strong results they continue to deliver and remain optimistic in our outlook. Earlier this month, our board approved an 11.4% increase in our dividends, reflecting this continued confidence. Tanger Open Air Shopping Centers offer engaging and value-filled experiences for our shoppers and a highly effective sales channel for our retail partners. We have a high-quality and diversified roster of tenants, increasing rents with more headroom for growth, and a platform with additional opportunities to grow NOI. I want to thank the entire team, our shoppers, retailers, and all of our stakeholders for their continued support. I'll now turn the call over to Michael.