Wednesday, October 15, 2003
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Wednesday, October 15, 2003 |
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Tanger acquires new outlet centers Tanger Factory Outlet Centers, Inc., a leading owner, developer and manager of factory outlet centers, announced the execution of a definitive agreement for the acquisition of the Charter Oak Partners’ portfolio of nine factory outlet centers totaling approximately 3.3 million square feet. Tanger and an affiliate of Blackstone Real Estate Advisors have formed a limited liability company to acquire the portfolio as a joint venture. Tanger will own one-third and Blackstone will own two-thirds of the joint venture. Tanger will provide operating, management, leasing and marketing services for the properties. The purchase price for this transaction is $491 million, including the assumption of approximately $187 million of debt. Closing is expected to take place during the current quarter of 2003. Tanger expects that the transaction will be accretive to its operating results from year one and will allow Tanger to maintain a strong balance sheet and its current financial flexibility. The New York-based international investment banking partnership of Compass Advisers, LLP were advisers to Tanger on the transaction. The factory outlets being acquired are located in Rehoboth, Del.; Riviera Center-Foley, Ala.; Myrtle Beach, S.C.; Park City, Utah; Hilton Head, S.C.; Lakes Region-Tilton, N.H.; Lincoln City, Ore.; Westbrook, Conn.; and Tuscola, Ill. “We are very excited about this acquisition. It is an excellent geographic fit for us and is in line with our strategy of creating an increased presence in high-end resort locations,” said Stanley K.Tanger, founder, chairman of the board and chief executive officer of Tanger. “Adding the Tanger brand to these outstanding properties will take us to the next level in creating a compelling shopping experience for our customers. “We will add value to these centers based upon our 22-year historical performance, proven managerial skills and marketing expertise. To attain that objective, we will formulate an extensive remerchandising strategy and look to enhance the centers and occupancy rates by adding additional upscale tenants to the existing high-quality roster.” Mr. Tanger noted that with this acquisition, Tanger will grow from its current 33 centers totaling 6.2 million square feet to 42 centers with 9.5 million square feet, and solidify its position in the outlet industry. He stated that the increased size of the Tanger portfolio will diversify Tanger’s profile, build on its management skills, and enhance the company’s shareholder value. “We look forward to a long-term successful partnership with Blackstone,” Mr. Tanger added. “We share Tanger Outlet Centers’ enthusiasm for these assets,” added Jonathan Gray, senior managing director of Blackstone. “After thoroughly reviewing the portfolio and the factory outlet industry, we decided to enter into partnership with Tanger. We have a very high regard for the Tanger management team, and this investment is in keeping with our longstanding tradition of partnering with high-quality corporations,” he added. “We are pleased that our many years of developing this portfolio of outstanding properties in highly desirable locations will result in a sale to the Tanger/Blackstone partnership,” noted Richard Lewis, president of Charter Oak Partners. “We know that they will continue our record of maximizing the potential of these properties," Mr. Lewis added.
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