Tanger Inc.

Good morning. This is Ashley Curtis, and I would like to welcome you to the Tanger Factory Outlet Center's second 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.tanger.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, funds available for distribution or FAD, same 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 August 4, 2023. At this time, all participants are in listen-only mode. Following management's prepared remarks, 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 Steven Tanger, our Executive Chair, Steven Yaloff, President and Chief Executive Officer, and Michael Billerman, Executive Vice President, 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 Stephen Tanger. Please go ahead, Steve.

Good morning, and thank you for joining us for our second quarter 2023 earnings call. The team continues to unlock the value of the Tanger platform to drive attractive, organic, and external growth. We look forward to the opening of our newest center in Nashville, Tennessee, and we remain confident in our outlook. I will now turn the call over to Steve Yala.

Thanks, Steve, and good morning. We're pleased to announce another quarter of strong results that demonstrate the continued execution of our strategic plan to elevate and diversify our tenant mix drive total rents, and leverage our platform and balance sheet to realize additional growth. We delivered a same-center NOI increase of 4.3% for the second quarter, which was better than anticipated and contributed to our increased guidance for the full year. Leasing activity continues to be a highlight. The successful execution of our leasing strategy has enabled us to rebuild occupancy, drive rent expense recovery growth, and curate a portfolio with sought after brands that create an experience shopper seek. In the second quarter, we marked our sixth consecutive quarter of positive lease spreads and another quarter of occupancy gains. Occupancy stood at 97.2% on June 30th, up 230 basis points year over year and 70 basis points sequentially, giving us our highest occupancy since pre-COVID. As we discussed, Our leasing strategy incorporates a commitment to locking in higher fixed rents and expense recoveries. Blended average rental rates increased 13.2% for the trailing 12 months ending June 30th, 2023. Retenanting spreads grew 30.9% and renewal rent spreads grew 12.1%. Our ability to drive solid increases in renewal rents is the clearest demonstration of our retailer's commitment to our Tanger branded open-air portfolio, allowing us to capture rent upside. As of the end of the second quarter, renewals executed or in process represented 64% of leases expiring this year, consistent with last year, and we are actively addressing our role for 2024. We have rebuilt our occupancy, grown our rents, and are confident in our ability to sustain this growth. We have prioritized diversifying our tenant mix and continue to add new brands to our portfolio. One example is in San Marcos, Texas. We have recently opened multiple home furnishing brands, including Restoration Hardware, Design Within Reach, West Elm and Wayfair. This newly created outlet furniture destination, coupled with the recent opening of Shake Shack, has proven a great generator of traffic to our center, delivering on our mission to draw a new customer and have them stay longer when they visit. Our continued focus on adding new brands and converting temporary space to permanent has contributed to our occupancy gains in the quarter. We will continue to strategically utilize our temp leasing strategy to introduce new tenants to the portfolio with the objective of filling our centers with the most compelling brands over time. Furthermore, we've increased our occupancy cost ratio by 50 basis points from the prior period. from 8.5% to 9%, which is still one of the lowest in the industry, supporting our confidence and our ability to continue to grow rents. We continue to focus on enhancing our portfolio NOI by reducing or downsizing underperforming tenants and optimizing highly productive brands across our portfolio to achieve maximum productivity. Traffic was largely in line with the prior year quarter and we saw a slight decline in average tenant sales. In the second quarter, our shoppers gravitated to brands that provided better promotions and everyday value pricing, consistent with our outlet model. The introduction of our new Tanger loyalty program launched last month with a strong start, as members of our Tanger Club can enjoy even greater value across the participating store network. Our new Digital First loyalty program provides for our customized experience and retailer offers specifically tailored to each member's interests and enables them to unlock rewards for increasing levels of purchases and engagement. This program also provides an opportunity for us to better interact with our retailer partners and for retailers to drive visits from these valuable shoppers by delivering targeted offers. I invite each of you to join the new Tanger Club to experience it. In the second quarter, we published our latest ESG report. We remain committed to reducing our environmental impact, cultivating a people-first employee culture, and fostering healthier, more resilient communities where we do business. In the report, we highlighted some of our 2022 achievements, including doubling our solar infrastructure, reducing energy use and greenhouse gas emissions, doubling EV charging capabilities electrifying 100% of our security fleet of vehicles, and certifying over half of our GLA to meet LEED's high standards. Lastly, I'm extremely pleased to share that Tanger National, our 37th shopping center, will grand open on October 27th of this year. As of today, with just under 90 days until opening, we are currently 95% lease executed with an amazing assortment of the very best national, and international fashion, accessories, athletic, home furnishing, and cosmetic brands, many of which are new to Tanger and new to the outlet channel. Tanger Nashville will also feature a combination of famous national and local iconic food and beverage offerings with indoor and outdoor dining terraces surrounding a half-acre Central Park community space that serves as the project's centerpiece. The center will qualify for LEED Silver certification. As we look ahead, we are aware of the continued macroeconomic pressures, but are confident in our proven strategy of driving organic and external growth as we renew and re-tenant our existing portfolio while diversifying our tenant mix, monetizing our peripheral land, expanding select centers, and growing incremental revenue streams. Our people, platform, and strong balance sheet provides us opportunity to execute on these initiatives. I want to thank our entire team, our shoppers, retailers, and all of our stakeholders for their continued support. I'd now like to turn the call over to Michael.