Tanger Inc. Q3 FY2020 Earnings Call

Good morning. This is Cyndi Holt, Vice President of Investor Relations, and I would like to welcome you to the Tanger Factory Outlet Centers Third Quarter 2020 Conference Call. Yesterday evening, we issued our earnings release as well as our supplemental information package and our investor presentation. This information is available on our Investor Relations website, investors.tangeroutlets.com. Please note that during this conference call, some of management's comments will be forward-looking statements that are subject to numerous risks and uncertainties, and actual results could differ materially from those projected. We direct you to our filings with the Securities and Exchange Commission for a detailed discussion of these risks and uncertainties. During the call, we will also discuss non-GAAP financial measures as defined by SEC Regulation G, including funds from operations, or FFO; core FFO; same-center net operating income; and adjusted EBITDA. Reconciliations of these non-GAAP measures to the most directly comparable GAAP financial measures are included in our earnings release and in our supplemental information. This call is being recorded for rebroadcast for a period of time in the future. As such, it is important to note that management's comments include time-sensitive information that may only be accurate as of today's date, November 6, 2020. On the call today will be Steven Tanger, Chief Executive Officer; Stephen Yalof, President and Chief Operating Officer; and Jim Williams, Executive Vice President and Chief Financial Officer. I will now turn the call over to Steven Tanger. Please go ahead, Steve.

Good morning, and thank you for joining us. I will provide a review of our third quarter performance and an update on each of our key priorities. Steve Yalof will provide additional details on our strategic initiatives, and Jim Williams will discuss our financial results and balance sheet. During the third quarter, we made meaningful improvements across each of our areas of focus, including liquidity, rent collections, driving traffic to our centers, leasing, and shopper engagement. Our centers offer a compelling option for retailers with an attractive, relatively low cost of occupancy. For shoppers, our open-air outdoor centers offer an inviting way to find the brands and value they seek, as evidenced by the rebound in traffic that we experienced as the third quarter progressed. We believe we are well positioned to capture pent-up demand going into this holiday shopping season and beyond. In the third quarter of 2020, same-center NOI was $66.6 million, a decline of $10.9 million compared to the prior year, driven in large part by the impact of COVID-19 on rent collections. We are pleased that the year-over-year change is significantly better than it was in the second quarter. Furthermore, since the start of the third quarter, we have generated positive cash flow each month, resulting in $640 million of available liquidity at the end of October. We have made significant progress in terms of rent collections, which were markedly improved compared to the second quarter. For the third quarter, we expect to collect approximately 92% of rents billed, including 89% that we have already collected. We only have approximately 3% of third quarter billed rent that is being deferred or still under negotiation and 5%, which we do not anticipate collecting due to one-time concessions or bankruptcies or because we otherwise deemed them uncollectible due to tenant financial weaknesses. In the select cases where we have granted one-time concessions, we have done so in exchange for landlord-favorable lease modifications, such as co-tenancy waivers, term extensions, and early option exercises in exchange for value. This year's third quarter was negatively impacted by reduced back-to-school shopping caused by some districts requiring schools to be virtual. Uncertainty was prevalent, including shoppers' comfort in going to stores, retailers' ability to open and staff their stores, and the full availability of inventory. Given that changing backdrop, we are pleased with our performance. For the quarter, traffic rebounded to 86.5% of prior year. Even as stores opened to accommodate retailer needs, our open-air centers operated at 30% fewer hours per week since reopening. In addition, many local mandates required only 50% of capacity at one time in retail stores. Of note, traffic picked up tremendously from the beginning of the quarter to the end. By mid-June, nonessential shopping mandates were lifted at all of our centers and store openings accelerated as the third quarter progressed. At the start of the quarter, approximately 88% of total occupied stores in the portfolio had reopened. At the close of the quarter, that increased to more than 99%. We have increasingly moved from a defensive and reactive approach that was necessary as we learned how to adapt and operate within the protocols of the pandemic, towards a proactive strategy of safely getting customers back in shopping. As of today, we have increased hours and access as we maintain our priorities of shopper safety, retailer ability to staff the stores, and the desire to offer as much access as possible to our customers. Blended average rental rates for all leases that commenced in the quarter were off 6% on a straight-line basis and 11% on a cash basis. At quarter end, occupancy for our consolidated portfolio was 92.9%, down 90 basis points from the end of the second quarter, due in large part to Ascena closing 29 stores totaling 137,000 square feet. While a number of tenant bankruptcies and brand restructurings remain fluid at this time, we expect approximately 80 stores comprising 400,000 square feet to close between the fourth quarter of 2020 and the second quarter of 2021. We also expect there will be an impact on rental rates as mid-lease modifications are implemented in select cases and as some tenant leases are renewed at reduced spreads. These tenant situations have accelerated as the pandemic further impacted their businesses. That is one element of our business that we cannot control. And while there will likely be additional fallout, as we sit today, our tenant watch list is smaller than it was going into the pandemic. Our confidence in our platform is steadfast. And while the current level of vacancy does create near-term pressure on our NOI, it also creates opportunity as we curate our centers and target new tenants that will increase the shopping options available to our centers. Importantly, we have maintained our strong liquidity position. With an improving outlook, we fully repaid the outstanding balances on our $600 million unsecured lines of credit. With the increase in rent collections, we have achieved positive cash flow each month since the start of the third quarter. As of the end of October, we had a cash balance of approximately $40 million. Balance sheet strength has long been a core tenet of Tanger, and this discipline is serving us well. We believe a fortified balance sheet remains crucial to navigate challenging times and to emerge with the strength necessary to pursue potential opportunities. Our priorities remain consistent: maintain a strong balance sheet, provide a compelling value proposition for our retailers and consumers, and maintain a high-quality portfolio with desirable brand name tenants. While we are encouraged by sequential improvements in our long-term outlook, we do recognize the continued challenges we face, largely due to the impact of COVID-19. Leasing remains a top priority, as does continuing to build on our positive traffic momentum, particularly as we enter the holiday shopping period. As we evolve from the defensive stance we needed to take at the outset of the pandemic, we are taking a fresh look at our center operations with a view towards achieving additional NOI and sustained long-term growth. Finally, I want to express my ongoing best wishes for everyone's good health and well-being. We remain committed to supporting our employees, customers, and communities through this difficult time. I will now turn the call over to Steve Yalof.

Thank you. We've made significant progress in terms of stores reopening and rent collection since last quarter's call. These continue to be priorities for our entire team, and we're highly focused on returning to long-term sustained growth. Our immediate emphasis is on leasing available space, driving traffic to our open-air outlet centers, and building shopper engagement through the important holiday shopping period. We are effectively executing on our initiatives aimed at operating more efficiently to optimize costs, maximizing revenue, and driving NOI growth. In terms of leasing, we continue to get in front of our great brands and generate interest. Many of which are already Tanger customers that are looking to expand their footprint with us such as Calvin Klein, West Elm, Pottery Barn, and Aerie. These brands have opened new locations during the pandemic, including marquee stores in core locations. We are also strategically and successfully utilizing pop-up stores. Pop-ups allow us to fill vacancies and to introduce new brands and new categories to Tanger, such as in the home category, popular food and beverage concepts, well-known local brands, and digitally native brands. While the rent per square foot on these pop-up leases is lower than the portfolio average, they fill a number of objectives, including keeping the space occupied with desirable retailers and setting us up for additional future growth with many of these tenants. Two such examples are Tory Burch and Vineyard Vines, both of which initiated their relationship with us as pop-ups and have since expanded to have multiple long-term leases. While leasing velocity remains moderate in this environment, we believe the open-air outlet distribution channel continues to be critically important for many retailers, providing a low relative cost of occupancy, making it a compelling option for retailers new to the channel, particularly strong local brands. Through our leasing efforts, we limited our occupancy decline for the quarter to 90 basis points as new leases offset almost half of the vacancies created by the recaptured space. We have been focused on evolving our marketing strategy to drive customers to our centers while also increasing customer engagement. Enhancing our digital strategy and marketing efforts has been an objective for some time, and the current environment has only accelerated this initiative. During the quarter, we launched exciting enhancements to the Tanger digital capabilities, where shoppers can access exclusive deals and earn rewards. As of the end of the third quarter, Tanger app downloads were up 26% year-to-date. Similarly, we have continued to utilize the Tanger virtual shopper program, which allows shoppers to seamlessly access products from across our platform. This program is having the intended result of engaging shoppers and allowing them to shop in the way it fits their needs. As we lead up to the holiday shopping season, we are planning for one that looks different than it has in years past. Instead of the typical focus on the day and weeks following Thanksgiving, we are starting early and encouraging people to shop early, shop now, shop Tanger. We are working closely with our retailers to provide exclusive promotions at our centers and to provide a safety-conscious and fun environment for shoppers. At this time, tenants are communicating that they're in good shape with regards to the holiday inventory, having effectively worked through inventory that had built up during the shutdown. Additionally, we believe we have a compelling opportunity from an operational perspective with some enhancements to our field management team. To drive this, we've added a seasoned executive to our team. Leslie Swanson has joined Tanger as Executive Vice President of Operations and is responsible for overseeing the planning and execution of operational strategies and expense management initiatives, growing center occupancy, and developing new revenue opportunities. The underlying elements of this approach is to ensure we have an empowered field-driven organization, laser-focused on increasing NOI. There are some opportunities, particularly on the expense side that we can unlock in the near-term and others that will take longer to realize, but I'm confident that we can drive incremental revenue and profit over time. Finally, I would like to highlight some of our ESG activities. With regard to the social elements, supporting local communities is embedded in our culture. Tanger continues to support important social services throughout the pandemic by making our centers available for blood drives and food collection and distribution sites. As part of our efforts to foster civic engagement, Tanger partnered with two nonpartisan organizations, HeadCount and Power the Polls, to encourage voter registration and offered our full-time employees paid time off to volunteer at polling stations. We are dedicated to engaging with our stakeholders on ESG matters at all levels. To further this engagement, Tanger will complete a comprehensive materiality assessment early next year to help guide our ongoing ESG strategy, goals, and objectives. We are committed to ongoing improvement and transparency, and we look forward to reporting on our efforts and progress. The entire team is excited by the future prospects for Tanger, although the near-term environment remains uncertain, and it will take some time to return to sustained growth. I believe we have an unparalleled platform and brand from which to achieve growth and create value. With that, I would now like to turn the call over to Jim to take you through our financial results, balance sheet, and liquidity recap.

Thank you, Steve. Third quarter results showed a strong improvement from our second quarter performance but reflect the ongoing impact of uncollected rent and reserves related to the pandemic and tenant bankruptcies. Please refer to the earnings release we issued last night for additional detail provided to quantify the impact on rental revenues. For the third quarter, net income available to common shareholders was $0.14 per share compared to net income of $0.25 per share in the prior year. Third quarter core FFO available to common shareholders was $0.44 per share compared to $0.58 per share in the third quarter of 2019. Same-center NOI for the consolidated portfolio decreased $10.9 million for the quarter, including a $6.6 million charge to write-off uncollectible revenues or reserve for rents that were deferred or under negotiation at quarter end and may not be collectible. In addition, we recognized a write-off of approximately $2.4 million in straight-line rents associated with the bankruptcies and uncollectible accounts. The outcome of the bankruptcy is still not fully known at this time. And the rents and uncollectible are largely pre-petition rents. Tenants who are currently on a cash basis of accounting comprise less than 3% of our monthly rents. We also continue to collect rents billed for prior periods, and as of October 31, our second quarter collections improved to 43% of rents billed as expected payments were received, rents previously under negotiation were resolved, and a portion of rents written off in the second quarter were paid. With regard to rent deferrals, we recognized revenue from these leases in our net income, FFO, and same-center NOI and recorded a lease receivable on our balance sheet. In the third quarter, approximately $2.2 million of rental income billed represented deferred rents or those that are under negotiation. This is a marked decline from the $28 million deferred or under negotiation for rents billed in the second quarter. Substantially, all of the deferred rents are due in 2021, the majority of which are due in January and February. That said, we have taken a prudent approach towards collectability. In total, for both quarters, we have taken the reserve against revenues for potentially uncollectible accounts totaling $11.8 million, which represents 6% of rents billed and 39% of rents deferred or still under negotiation. As we have previously discussed, we have always prioritized maintaining a strong financial position and particularly through the pandemic, this discipline has proven to be critical. With the improvements in rent collections, the ongoing focus on cost controls, and a prudent approach to capital allocation, we currently have $640 million of available liquidity, including $40 million of cash and $600 million of unused capacity on the lines of credit. At the start of the pandemic, out of caution, we drew down our entire line of credit. With the improving environment during the quarter, we fully paid down the balance. We have no significant debt maturities until December 2023. In terms of capital allocation, we will continue our disciplined and conservative approach. Our priority uses of capital include investments to deliver NOI growth such as retenanting vacancies, reducing leverage that has increased in the current environment, as well as availing selective accretive opportunities over the long term. With regard to dividends, the Board will continue to evaluate future dividend distributions on a quarterly basis. But we remain committed to paying our dividend as required to maintain REIT status. Due to the ongoing uncertainty around the current environment, we are not reinstating guidance at this time. We anticipate the remainder of this year and into next year to be pressure as we see potential store closures and rent modifications from these recent announcements. Nevertheless, we believe our balance sheet is well positioned from a liquidity perspective and are continuing to make the appropriate steps to navigate the current environment. I'd now like to open it up for questions.

And our first question today comes from Katy McConnell from Citi.

So can you provide a little more color on what the pipeline of backfill leasing demand looks like today? And based on the progress you made addressing 2020 expirations, can you talk about how spreads are trending for those leases you're actually signing today as opposed to the prior 12 months?

This is Steve Yalof. I'm going to let Jim talk about the spreads. But as far as leasing is concerned, the first thing I want to share is that everybody in our company is a leasing representative. Steve's leasing, I'm leasing, our center managers are leasing. Our retailers, although they're taking a cautious approach, we're talking about future open to buy. Our leasing strategy is a sound one, and we're talking to a lot of the national retailers that are currently in our footprint about expanding. Some of the recent bankruptcies have created opportunity where we have space available in some shopping centers, they are typically high occupancy and have given us the opportunity to get in front of a number of new retailers and creating opportunities that hadn't been there in the past. We're also employing our pop-up strategy, as I said in my remarks. And we think pop-up as a strategy is a great opportunity to turn some of that vacant space into net income. And obviously, short-term leases give us the opportunity to reprice our real estate ultimately as we come to the end of this pandemic. I'll turn it over to Jim to sort of share with you a little bit more about the leasing spreads.

Katy, this is Jim. We won't be able to provide much guidance for 2021. As we've mentioned, we anticipate some ongoing pressure on the spread as we work with our tenants to navigate this environment and the challenges we face in maintaining high occupancy.

Okay. And then seeing as you made great progress on the rent collection this quarter, I'm curious when you'd expect to get back to a more normalized level of collection? And based on that progress since Q2, can you touch on any top or bottom categories that contributed the most improvement? Or that are still lagging?

We're pleased to report that our collection rates have reached 89%. Looking ahead, we anticipate this could rise to 92%. There's still a small portion, about 3%, that remains under negotiation, which is impressive considering we had to engage with nearly all tenants in our portfolio. We are actively addressing that remaining percentage and expect to make further progress. However, we have noticed that rents for the second and third quarters have been affected by bankruptcies, with much of the write-off related to pre-petition rents. Now that we're in the post-petition periods, we don't foresee another 2% of rents being written off unless there are more bankruptcy filings. That said, we do expect to encounter additional store closures and some rent lags as we address the situation with bankruptcy tenants.

Our next question comes from Greg McGinniss from Scotiabank.

Just building on Katy's question a little bit. So based on that pretty impressive 89% collections number, and you've clearly been hard at work receiving past rents owed. Could you just provide the final collections number by month in Q3? And then kind of where you expect collections to trend by year-end? Is that 92% number the target here?

Well, Greg, I mean, again, we're going to be reluctant to give you guidance for the fourth quarter. But yes, I mean the collection rates for the month are very similar to particularly the latter March, to where our average had turned out to be 89%. And so far, what we're seeing in October is very similar to that rate.

Sorry. And then the July, August collections numbers, if you don't mind?

July was lower. However, we prefer not to provide a monthly breakdown. The key takeaway is that we are trending towards the end of the quarter, and as we look into the fourth quarter, the rates we are observing align more closely with those indicated in the table.

Okay. I guess then, Jim, as noted in the earnings release, there were some rents written off in Q2 that were repaid in Q3. Would you mind just outlining the impact of adjustments built into Q3 results that really apply to last quarter's reserves and write-offs?

Yes, there has been significant movement in the different categories. Part of this analysis involves a large amount of rent that has been deferred and will not be paid until 2021. As we progress through the year, we will need to review what remains outstanding, what is still unpaid, and conduct a collectability assessment. In some instances, we have increased the reserves we held. In others, we have seen positive outcomes where tenants paid when we did not expect them to, or we received some termination fees that had previously been written off. Overall, I think the adjustments made in the second quarter that carried over into the third quarter had a neutral impact.

Okay. I guess just one more for me on the Terrell outlet sale. Just curious what the drivers were behind the disposition, whether we should expect to see further noncore sales in the future? And then what the NOI contribution was from that asset? Obviously, it's smaller.

Yes. Yes, Terrell was a very small, poorly productive noncore asset. And it's consistent with our long-standing policy of an aggressive and active asset management program. I'm not going to get too much into the details because it was an insignificant transaction, but it is consistent with our long-term plan.

Our next question comes from Todd Thomas from KeyBanc.

This is Ravi Vaidya on the line for Todd Thomas. I wanted to ask you guys about what concepts your team is seeing incremental demand from? We're hearing about retailers cutting their enclosed mall footprints. Gap was an example. Any sense how those types of tenants are thinking about the outlets?

So first of all, as it relates to Gap, we had a very favorable resolution with Gap. In fact, looking at new concepts with Gap as we speak. But I think as we reduce our dependency on apparel and footwear going forward, home furnishings, sporting goods, hard goods, and entertainment concepts are things that we're focused on right now.

It sounds like traffic has recovered, especially in September, approaching levels seen in the prior year. Can you provide any insights on how this is impacting sales? Do you have any updates on sales metrics, the performance of the TangerClub membership, average basket size, or anything similar?

Well, our centers are all open-air, where basically, consumers feel more comfortable in today's environment shopping. Last year, I just want to point out, we were compared to a period of time with Hurricane Dorian in September, where seven of our coastal centers were closed. So without that impact, we still would have been about 96% of prior levels. But in all transparency, we wanted to point that out. We believe that we have compelling offerings to consumers and we are prepared to satisfy what our research shows is tremendous pent-up demand for people to go shopping.

Okay. Just one more for me here. Given the additional space you expect to recapture the 400,000 square feet, just wondering if you have a sense of where occupancy bottoms out and when. And just to clarify, is that 400,000 feet only for tenants in bankruptcy? Or are there other closures and non-renewals in that total space you're going to recapture?

So that number is both bankruptcy and also restructuring. And obviously, it's a fluid situation with COVID right now. It's hard to make a determination as to where occupancy will land. But again, I reiterate that leasing is one of the main objectives for the entire organization. And we see that some of these spaces that we're getting back, particularly in some of our better assets, creating great opportunities for us to get in front of new retailers, particularly those that haven't been in our platform before. And we think that's going to be a great opportunity for us to build upon as we continue to maintain our strong leasing relationships with live retailers.

Our next question comes from Craig Schmidt from Bank of America.

I'm wondering, do the pop-ups impact leasing spreads? The pop-up leases.

No, they don't, Craig.

Okay. And then regarding home and hard good categories, the new retailers that are renting your properties, what kind of ABR do they take comparable to the overall portfolio?

We don't really provide a breakdown of rents by category. However, from a contribution standpoint, we see positive developments with strong retailers like those we recently brought to Lancaster, including West Elm and Pottery Barn. These retailers, who were previously located in other centers within the community, chose to position themselves in our shopping centers due to the higher traffic. With their strong brand loyalty, we not only benefit from the rents they pay and the potential for overage rent as their sales grow, but we also attract a new category of shoppers to our centers. This is certainly beneficial for everyone involved.

Okay. Our next question comes from Caitlin Burrows from Goldman Sachs.

I guess maybe on same-store NOI for that revenues were down in the quarter, but so were expenses. So NOI, I would say, was kind of even with them. I was wondering, going forward, you did talk about expense savings, but is it possible to continue these expense savings while revenues are lower, so that kind of evens out the same-store NOI declines? Or do you think that the expense savings may not be able to keep up with the revenue?

Caitlin, this is Steve again. With regard to expense savings, so I think a lot of the Q3 expense savings had to do with the fact that we had cut our hours by 30%. And actually starting today, we're going to add back two hours a day for the holiday shopping season. So implicit with longer hours come increased expenses. As I mentioned in my opening remarks, we just brought a very seasoned veteran of operating shopping centers to our team. And one of the legacy field operations of Tanger being a little bit more marketing-driven, we're now pivoting to more of an operational model. And we think embedded in that pivot to more operations will come more expense savings on the field line.

Okay. Got it. And then just on the lease termination fees, they were high this quarter, but I know that you guys had mentioned last quarter that you were expecting them to be high. So I was just wondering if that expectation is now, of this elevated level, is over? Or do you think that what you had been talking about last quarter as that it would be coming, if there's still more to that or if we should return to a more normalized level?

Caitlin, this is Jim. I'll take that question. We have been getting a few termination fees, but the primary reason for the termination fee that we recognized is a pretty significant termination fee we received from a single tenant, and we recognized about half of that in the third quarter and the other half will be recognized in the fourth quarter.

Our next question comes from Vince Tibone from Green Street Advisors. Caitlin, this is Jim. I'll take that question. We have been receiving some termination fees, but the main reason for the termination fee we recognized is a substantial termination fee from a single tenant. We recorded about half of that in the third quarter, and the remaining half will be recognized in the fourth quarter.

What percentage of your square footage is currently leased to pop-up or temporary tenants? And how does that compare to where it was a year ago?

It's Steve. Historically, temporary tenants account for about 4% of our portfolio. But right now, that's expanded to about 5.5%. And again, short-term leases and pop-ups to us, obviously, occupancy is critical, and it's our goal right now to maintain occupancy. Occupancy means cash flow. But then a lot of those short-term leases where we have short lease expiration periods, obviously, give us the opportunity to reprice our real estate when we get to the other side of this current pandemic.

Got it. And just a follow-up on Craig's question. I just want to clarify. So all the pop-up leasing is not included in any of the leasing metrics. Like, I see you break it out in two different sections, all lease terms and then terms of more than 12 months. So none of the pop-up leasing shows up even in the all lease terms section, is that correct?

So Vince, this is Jim. Let me just clarify. If you look at the footnote in our supplement, we tell you that what's not in the spread are some of the temporary tenant leasing income, which is where pop-ups would be. What's in short-term leases are those that are beyond a year or more. And those are what's shown in the spreads.

Okay. How much lower is the typical rent on the pop-ups? I think there may be a gap in NOI, and it's difficult to see its impact since it doesn’t appear in the spreads. I am not sure where else it would be reflected in the financials besides revenue. Can you help us understand the rent level that tenants generally pay compared to the portfolio average if we expect the number of tenants to increase?

This is Jim. I'll start off, and Steve Yalof, if you want to jump in. But as Steve said, I mean the pop-ups just due to their short-term nature are not going to pay the full rents. And we don't really get into what those rents are and how those compare. It's a case-by-case basis. It's a tenant-by-tenant basis. It depends on who we're talking to and who's coming in. Obviously, the goal there is to bring in some exciting new and fresh tenants to upgrade our tenant mix, and we think that's where we need to go and take the portfolio. But I think we're having a lot of success in talking to these tenants and getting them interested in coming in and opening space in our centers, certainly on a pop-up basis.

Our next question comes from Mike Mueller from JPMorgan.

So looking at the reserve components, the $2.3 million tied to bankruptcy, primarily pre-petition, and then at risk due to financial weakness, that's about $3.6 million together. If we're thinking about the 400,000 square feet of space that you expect to lose over the next few quarters, what portion of that $3.6 million is tied to that 400,000 square feet? And then what portion is tied to, I guess, other tenant situations outside of the 400,000 square feet that you know you're going to lose?

So Mike, I don't have that kind of breakdown in front of me that I can share with you. There's certainly a component that's in the bankruptcy section, but I just don't have that information, I'm sorry.

And our next question is a follow-up from Vince Tibone from Green Street Advisors.

Just what's sort of the impairment charge at Foxwoods? And then does that mean the property is being marketed for sale?

Vince, this is Jim. The impairment related to Foxwoods is mainly due to its connection to the casino industry, which is currently facing some challenges with rents and occupancy. We are noticing difficulties in the market, particularly since one of the casinos remains closed. Each quarter, we conduct a thorough analysis, and based on the facts and circumstances at that time, we determined that an impairment charge was necessary for Foxwoods. However, this does not imply that the property is being offered for sale.

Okay. And just one last one for me. Can you share some color on how much variability there is among traffic trends across your portfolio and any notable trends by region? And specifically, how are your two important Long Island centers performing compared to the rest of the portfolio?

The portfolio we have is not reliant on visitors and tourists from other parts of the world, who have obviously been affected by this terrible virus. Our properties are drive-to resorts in America where people usually return year after year. We're not a substitute for retail, so if I said the southern properties were performing better than the northern ones, that may not reflect the true situation. Each area has different factors influencing traffic, including weather and other unique challenges that may be extraordinary and nonrecurring. Therefore, I don't think we can provide much useful information on the geographic distribution of sales and traffic.

And ladies and gentlemen, with that, we'll conclude today's question-and-answer session. I'd like to turn the conference call back over to Steve Tanger for any closing remarks.

I want to thank everybody for participating in our call today. We hope to see virtually a lot of you at NAREIT in a couple of weeks and eventually be able to visit with you face-to-face, as we always have. Please be safe and go shop at our opening outlet centers. Have a great holiday, if we don't see you or speak to you before. Goodbye.

Ladies and gentlemen, with that, we'll conclude today's conference call. We thank you for attending today's presentation. You may now disconnect your lines.