Research Update: Tanger Factory Outlet Centers Inc. Outlook Revised To Negative On Weaker-Than-Expected Operating Results

Tanger reported negative same center net operating income (NOI) growth for the fourth quarter of 2017 and guided to weaker-than-expected results for 2018. We believe this demonstrates that outlet centers may not be as insulated from pressure across retail than we had previously believed. Tenant bankruptcies and store closures resulted in meaningful rent concessions for executed, though, temporary leased space in 2017 and 2018. We are affirming our 'BBB+' corporate credit and issue ratings on Tanger and revising our outlook to negative from stable. The negative outlook reflects our expectation that bankruptcies and ongoing retailing pressures will modestly weaken re-leasing rates and same-store NOI growth despite strong occupancy levels. On Feb. 15, 2018, S&P Global Ratings affirmed its 'BBB+' corporate

...Tanger reported negative same center net operating income (NOI) growth for the fourth quarter of 2017 and guided to weaker-than-expected results for 2018. We believe this demonstrates that outlet centers may not be as insulated from pressure across retail than we had previously believed. Tenant bankruptcies and store closures resulted in meaningful rent concessions for executed, though, temporary leased space in 2017 and 2018....

Research Update