Tanger Q2 Earnings Call Highlights

Tanger raised its 2026 outlook after Core FFO per share increased 10.3% year over year to $0.64 and same-center NOI grew 3.5% in the second quarter. Full-year Core FFO guidance is now $2.45–$2.52 per share, with same-center NOI growth expected at 2.75%–4.25%.

Leasing and tenant demand remained strong, with 650-plus transactions covering 3.3 million square feet, a 10.5% blended rent spread and tenant sales up 5% to $487 per square foot. Occupancy was 96.6%, despite the recapture of Saks OFF 5th locations.

Recaptured Saks space offers longer-term upside: about 70,000 square feet remains vacant, and permanent replacement rents could reach two to four times temporary rents, with most benefits expected in 2027–2028. Tanger also acquired Levis Commons, maintained net leverage at 4.7 times adjusted EBITDA and raised its dividend 7% year over year.

Tanger raised its full-year 2026 outlook after reporting second-quarter growth in funds from operations, same-center net operating income and tenant sales, supported by leasing activity, tourism, marketing initiatives and acquisitions. Core FFO rose 10.3% year over year to $0.64 per share in the second quarter, while same-center NOI increased 3.5%, according to Michael Bilerman, Tanger’s executive vice president, chief financial officer and chief investment officer. The company attributed the NOI gain to higher base rents, tenant reimbursements and growth in other revenue streams.

Management raised its full-year Core FFO guidance to $2.45 to $2.52 per share from $2.42 to $2.50 previously. The new midpoint would represent 7% growth from 2025. Tanger also increased the low end of its same-center NOI growth outlook to 2.75% from 2.25%, while maintaining the high end at 4.25%.

Quarter-end occupancy was 96.6%, in line with the year-earlier level but modestly below the first quarter because of Tanger’s recapture of Saks OFF 5th locations. The company has backfill deals in its pipeline and is using temporary tenants in selected spaces while it pursues long-term leases. Over the past 12 months, Tanger executed more than 650 leasing transactions covering 3.3 million square feet. Blended rent spreads were 10.5%, marking the company’s 18th consecutive quarter of positive rent spreads. Tanger said it has completed or is working on renewals for 70% of its 2026 lease expirations.

Yalof said the company is replacing less productive tenants with brands and uses intended to broaden traffic and spending. He cited Sephora as an example, noting Tanger now has 14 Sephora locations across its portfolio and has replaced some retailers generating about $200 per square foot in sales with retailers producing more than $1,000 per square foot. Tanger’s trailing 12-month average tenant sales reached $487 per square foot, up 5% from a year earlier. Its occupancy cost ratio was 9.7%, which management said provides room for additional rent growth. The top 25 tenants, representing more than 60 brands, accounted for about 50% of rent, down from more than 60% five years ago. Over that period, Tanger’s portfolio of brands has expanded to more than 800 from approximately 500.

The company recaptured 150,000 square feet of Saks OFF 5th space, which reduced second-quarter occupancy by about 45 basis points sequentially. About half of the space is occupied by temporary tenants and about 70,000 square feet is vacant, Bilerman said. Doug McDonald, Tanger’s senior vice president of finance, capital markets and treasurer, said the former Saks rents were similar to temporary rents in Tanger’s portfolio.