Tanger Acquires Its First Open-air Lifestyle Center

David Moin
·4 min read

Tanger has acquired Bridge Street Town Centre, an 825,000‑square-foot, open-air lifestyle center in Huntsville, Ala., for $193.5 million.

Bridge Street, considered the dominant center in the market, has a total of 80 stores, restaurants and entertainment venues. In its announcement late Thursday, Tanger indicated it expects the center to deliver a first-year return in the mid 8 percent range, with potential for additional growth over time. The deal follows on the heels of Tanger’s purchase of Asheville Outlets in North Carolina two weeks ago, and the launch of Tanger Outlets Nashville in October.

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“The addition of Bridge Street Town Centre is a natural extension of our capabilities and consistent with our long-term strategy of investing in dominant open-air retail centers in markets which benefit from outsized residential and tourism growth,” said Stephen Yalof, president and chief executive officer of Tanger, a real estate investment trust owning and managing primarily open-air outlet centers but expanding with an eye for other opportunities.

Asked if Tanger is in the market for additional properties, Yalof replied, “We’re definitely looking. Now that we have opened the door to lifestyle ope- air retail centers, it is very possible we’ll start hearing from potential partners or sellers.”

He also said that in the acquisition of Asheville Outlets two weeks ago for $70 million, and in the deal with Clarion Partners to rebrand Palm Beach Outlets in West Palm Beach, Florida as Tanger Outlets Palm Beach, and assume its marketing, leasing and property management, “they came to us.”

“We think we can add a lot of value to a number of properties that are out there,” Yalof said. “We are going to be very deliberate on what we elect to move forward on.”

Bridge Street Town Centre is Tanger’s first open-air lifestyle center. It’s over 93 percent occupied, according to Tanger. Specialty retail tenants include the market’s only Apple Store, as well as Lululemon, Sephora, Lovesac, Dry Goods, Victoria’s Secret, Athleta, Anthropologie, Altar’d State and Ulta. Larger format retailers include Barnes & Noble, Dick’s Sporting Goods, Old Navy, H&M and Belk. There are also over two dozen restaurants, like Cheesecake Factory, Texas de Brazil and Bravo! Italian Kitchen and local food offerings, as well as entertainment venues such as Main Event and the 14-screen Cinemark Bridge Street.

Huntsville is a technology and military hub and has been nicknamed “The Rocket City.” It’s home to the U.S. Space and Rocket Center, and more than 40 Fortune 500 companies. Bridge Street Town Centre is located within Cummings Research Park, the second largest research park in the U.S., and proximate to Redstone Arsenal, a 38,000-acre federal research, development, testing and engineering military base. The center is part of a larger mixed-use development that includes hotel rooms, multifamily units and a 144,000-square-foot office tower, which are separately owned by other parties.

Bridge Street Town Centre is Tanger’s 39th property and third center addition this quarter, following the opening of Tanger Nashville in October and the acquisition of Asheville Outlets in early November. The Huntsville and Asheville acquisitions totaled $263.5 million through cash on hand and draws on the company’s credit facility. Additionally, during the fourth quarter through Nov. 30, the company raised gross proceeds of $57.5 million through its at-the-market equity program, selling 2.3 million shares at an average price of $25.16 per share.

In a November 2023 interview, Steven B. Tanger, who on Jan. 1 transitions from executive chairman of Tanger Outlets to non-executive chairman and stays on the board, said: “We are looking at other types of opportunities to invest. Fortunately, we are good stewards of our investors’ capital. We did not over-leverage our balance sheet. We actually have one of the strongest balance sheets in the REIT industry. We have the cash to be opportunistic. Should we decide to make any acquisitions, we have the team that can add value. We’re going to go on the offense.

“There are lots of different opportunities for the company — and the cash, the financing, and the credit to be able to execute those growth plans….We have skills in buying, developing and managing assets, so we’re a fully integrated real estate company. Since we started 43 years ago, we have either built or bought 70 shopping centers and have sold 33 noncore assets over time.

“Our skill sets allow us to look at different types of retail. I don’t think we would diversify outside retail to multifamily, warehouse or commercial office buildings, which require different skill sets from ours, but there may come a time when we decide a good investment would be to buy other types of open-air retail.”

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