(Ian Ritter is national online editor for GlobeSt.com/RETAIL.)
GREENSBORO, NC-Tanger Factory Outlets is buying out the two-thirds it does not own in a joint venture of nine outlet centers from partner Blackstone Real Estate Advisors for $282.5 million. The two firms acquired the properties in December 2003 from Charter Oak Partners for $491 million.
As a result of the deal, the total amount of square footage in Tanger's portfolio will increase from 4.9 million sf to 8.2 million sf. Officials at locally owned Tanger and New York City-based Blackstone expect the deal to close by October.
The outlets are in Rehoboth, DE; Riviera Centre-Foley, AL; Myrtle Beach, SC; Park City, UT; Hilton Head, SC; Lakes Region-Tilton, NH; Lincoln City, OR; Westbrook, CT; and Tuscola, IL. Tanger, which currently leases and manages the centers, has a number of expansion opportunities at the properties, said Steven Tanger, the company's president and COO, during a conference call.
Tanger executives said during the call that the transaction will have a cap rate of about 8.5% and that it should be accretive to the company's FFO by 7% to 8%. Since the company has managed the nine outlets, sales per sf have jumped from $280 to $295, and occupancy rates have risen from 93% to 94%, Tanger says. "We are still in the process of doing a number of things to continue to add value," he says.
Tanger has two expansions under way in its portfolio. The company is adding 46,400 sf to its center in Locust Grove, GA, as well as 21,000 sf to its property in Foley.
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