Good morning. This is Cyndi Holt, Senior Vice President of Finance and Investor Relations. And I would like to welcome you to the Tanger Factory Outlet Centers' Third Quarter 2021 Conference Call. Yesterday evening, we issued our earnings release as well as our supplemental information package and 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, adjusted EBITDA, and net debt. 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 2, 2021. At this time, all participants are in listen-only mode. Following management’s prepared comments, the call will be opened for your questions. We request that everyone ask only one question and one follow-up to allow as many of you as possible to ask questions. If time permits, we are happy for you to re-queue for additional questions. On the call today will be Steven Tanger, our Executive Chair; Stephen Yalof, Chief Executive 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 for our third quarter 2021 earnings call. We had a great quarter as a result of improvements in occupancy, rent spreads, and sales. These all contributed to earnings which exceeded our expectations and an increase in our guidance for the remainder of the year. Our proactive capital markets success has also positioned us well with low leverage, ample liquidity, and exciting potential growth opportunities. I am proud of the tireless efforts of the entire Tanger team who are successfully delivering our strategic objectives. I will now turn the call over to Steve Yalof to provide additional details.

Thank you, Steve. We delivered strong performance in the third quarter and the continued momentum we are demonstrating across our portfolio supports our decision to increase our guidance for the year. The successful execution of our strategic plan is evident across all of our key metrics, including occupancy, rent spreads, tenant sales, and our focus on driving non-rental revenues, all of which continued to contribute to core FFO growth. Our portfolio occupancies returned to pre-pandemic levels despite having recaptured over 1 million square feet due to bankruptcies and brand-wide restructurings since the beginning of 2020. This includes 55,000 square feet we captured in the third quarter as anticipated. As of September 30, occupancy was 94.3%, up 140 basis points year-over-year and up 130 basis points since the end of the second quarter. With regard to rent spreads, we continued to see positive momentum to leases that commenced in the 12 months ended September 30. Blended average rates improved by 240 basis points on a cash basis compared to the 12 months ended June 30. Spreads have improved each quarter this year, and we believe that the continued increase we are seeing in traffic and sales will help sustain this trend. We also benefited from significant percentage rental growth this quarter, which was more than 2.5 times the comparable 2019 period. During the height of the pandemic, we renegotiated select leases with an aim to trade value for value, in some cases trading base rent for a larger variable rent component, in many cases reducing breakpoints and increasing variable rent pay rates which are now producing total rents that exceed the prior contractual fixed rents. Our rent spreads don't capture percentage rent contributions as spreads measure the change in base rent and common area charges only, but the strong variable rent component has contributed to our core FFO growth. Additionally, as we continue to negotiate renewals on these leases, we are focused on converting some of the variable upside into base rents which provide longer-term certainty. In light of the improving trends we are being strategic in our renewal and permanent leasing activity. Renewals executed or in process represented 68% of the space scheduled to expire during the year compared to 72% at this time last year. Shorter-term leases remain an effective approach to fill space and attract new tenants while preserving longer-term upside in the ability to push rates on permanent leases as the environment is becoming more favorable. Traffic for the quarter was approximately 99% over the same period in 2019. We saw a slight downturn in August in part due to concerns over the Delta variant and the timing of Labor Day, but September traffic returned to pre-pandemic levels. Tenant sales accelerated in the quarter, reaching an all-time high of $448 per square foot for the consolidated portfolio for the 12 months ended September 30, representing an increase of more than 13% over the comparable 2019 period. The key objective underlying our leasing strategy is to maximize NOI. While shorter-term leasing will continue to be a strategy, our goal is to convert this space to permanent deals over time as conditions improve, retaining the current tenant with higher rent or repopulating the space. We also continue to focus on growing our non-apparel and footwear tenant base and have added multiple new brands and categories to our portfolio this quarter. Key categories include furniture and home goods, and wellness and beauty. We have also focused on growing our food offerings by adding numerous sit-down, quick-serve, and grab-and-go concepts across our portfolio, and we are growing the presence of entertainment stores, kiosks, and amenities aimed at driving shopper visits, frequency, dwell time, and ultimately larger spend. These new users are present both on-center and in our outparcel and peripheral real estate. We are seeing traction with non-rental revenues. This is an area with growth opportunity as it is still in the early stages as a focus for Tanger. Marketing partnerships in the form of sponsored onsite events, activations, and advertising provide an opportunity for retailers to interact and communicate with the tens of millions of customers who shop at our centers annually. Our Labor Day block party activations, for example, were sponsored by international brands such as Unilever, Tesla, and Heineken, and we are planning similar events in the fourth quarter around holiday themes and tree lightings. Events like these not only improve traffic and dwell time but also generate revenue. This revenue is captured in the other revenues line, which for the third quarter has doubled the contribution from 2020 and increased 38% over 2019. This has proven to be a profitable initiative with plenty of additional opportunity, and we plan to grow this program across our portfolio. Our digital channels, including our website, app, and social channels complement our on-center experience and help to attract new customers, particularly in young demographics. Activations and shopper amenities such as Virtual Shopper and our web-hosted flash sales continue to engage and draw a younger consumer while providing an omni-channel experience for our core shoppers and important TangerClub members. Our Tanger Fashion Director is leading these programs and will continue to do so for us through the holiday season. As we look ahead to holiday shopping, we are encouraged. In partnership with our retailers, we are starting early. Holidays began at Tanger on November 1, and we are underway running campaigns, programs, and events to encourage early shopping. Many retailers across the country are facing potential logistics and staffing issues but are proactively navigating the situation. Although the impact of labor and supply chain is unknown, we are optimistic regarding our ability to deliver an exciting and fulfilling holiday experience to our customers and guests. In summary, we continue to execute on our strategic plan, focus on our core business, and create value by unlocking new revenue opportunities across our portfolio. We are enthusiastic about our positive leasing momentum and are encouraged by the new brands and categories we are adding to our centers. We are innovating and reaching our shoppers where they want to be, offering additional ways to engage and interact with new products and shop. We continue to see traffic, sales, leasing, and business development results improve. We're on a clear path to sustained same-center NOI growth, and along with our new long-term growth initiatives and operational efficiencies, we believe we have a compelling opportunity to create value over time. I would now like to turn the call over to Jim Williams to take you through our financial results, balance sheet, and outlook for the remainder of 2021.

Thank you, Steve. We delivered strong third quarter results showing continued positive momentum. Third quarter core FFO available to common shareholders was $0.47 per share compared to $0.44 per share in the third quarter of 2020. Core FFO for the third quarter of 2021 excludes a charge of $34 million or $0.31 per share for the early extinguishment of debt related to the redemption of our 2023 and 2024 bonds. Same-center NOI for the consolidated portfolio increased 11.5% for the quarter to $73.8 million, driven by better than expected rebound in variable rents and other revenues. We remain on track with rent collections and through October 29 had collected approximately 98% of 2020 deferred rents due by the end of the third quarter. The strategy we employed during the pandemic of deferring rent has proven to be effective. With regard to our ATM program, we did not sell any additional equity during the third quarter. Year-to-date we have sold $10 million shares generating proceeds of approximately $187 million, and $60 million remained available under our current authorization. As previously announced, in July we amended our unsecured lines of credit, and extended the maturity date to July 2026, including extension options. The lines have a borrowing capacity of $520 million with an accordion feature to increase borrowing capacity to $1.2 billion. Additionally, in August we completed a public offering of $400 million of senior notes at a rate of 2.75%, the lowest coupon in Tanger history. We used the proceeds from the sale to redeem the $100 million that was outstanding on our 3.875% notes due in 2023 and the $250 million that was outstanding on our 3.75% notes due in 2024. We also incurred a $31.9 million make-whole premium in September related to these redemptions. As of quarter end, we had no significant debt maturities until April 2024. Our leverage position has continued to improve in conjunction with our capital markets activity and earnings growth. As of September 30, our net debt to adjusted EBITDA improved to 5.3 times for the trailing 12 months compared to 7.2 times for the comparable 12-month period of the prior year. We have always prioritized maintaining a strong financial position and a disciplined and prudent approach to capital allocation. Our Board will continue to evaluate dividend distributions alongside earnings growth and taxable income distribution requirements. Our priority uses of capital are investing in our portfolio to grow NOI and evaluating selected external growth opportunities. Turning to guidance for the remainder of the year, we are increasing our core FFO to a range of $1.67 to $1.71 per share from the prior range of $1.52 and $1.59, an increase of 9% at the midpoint. This guidance reflects continued sequential improvement in our business, particularly higher variable rents achieved in the third quarter. Our guidance also includes up to 15,000 square feet related to the potential additional bankruptcies and brand-wide restructurings that could occur for the remainder of the year. For additional details on our key assumptions, please see our release issued last night. I'd now like to open it up for questions.

Thank you. Our first question today is from Katy McConnell of Citi. Please proceed with your question.

Hey, thanks, good morning. So now that we've seen a significant increase in percentage rent contribution, can we just discuss your outlook to better understand how much of that could be recurring on a go-forward basis based on how you're structuring new deals?

Good morning, Katy, and thanks for the question. Well, first of all yes, our variable rent numbers have been great, and as we mentioned, particularly with regard to about a year ago when we were restructuring our deals where we traded some of our base rent for variable rent, obviously the sales have continued to grow across the portfolio, those have been great trades for us. And although we are prudent in our guidance with regard to next quarter, we also believe that we're optimistic about sales growth, and we think there is still some upside in those numbers. So I'm optimistic about fourth quarter sales and we're certainly optimistic going into next year.

Okay, great. And then the new tenant category, Steve mentioned, increasing exposure to outside of apparel and shoes, can you talk about how much those categories are contributing to the new leasing progress you've seen to date?

Are you referring to the home category? It’s a big one for us. We've recently executed two deals with Mitchell Gold who have taken two very big footprints in our portfolio, one at Riverhead and one in San Marcos. We just signed a lease with Crate & Barrel also in Riverhead. So the furniture and home categories seem to be a great growth vehicle for us and it's great for our portfolio. And then other businesses are food and beverage business. We've seen our shopper base increased during the week and that's always been a big burden to some of the food retailers in our centers where a lot of the customers have historically shopped primarily on weekends, and now we see that weekday traffic is supporting better food business, and the food operators are responding and their business seems to be improving as well. So that's going to be a big opportunity for us going forward. The customers appreciate the amenity of food and it keeps the customers coming back more frequently, staying longer on-site when they do shop with us, and obviously both of those result in bigger spends from our shoppers.

Okay, great, thanks.

The next question is from Todd Thomas of KeyBanc Capital Markets. Please proceed with your question.

Hi, thanks. Good morning. First, I was wondering if you could Jim, maybe speak to the fourth quarter implied guidance, core FFO year-to-date is a $1.32, but leaves about $0.37 to get to the midpoint of the revised guidance which is $0.10 step-down from the third quarter. Can you just provide a little bit of detail maybe run through some of the items that you are anticipating will change heading into the fourth quarter?

Sure Todd, and good morning. The primary drivers of that are lower expectations for overage rents and term fees including our share of the JVs. Steve mentioned, I think we're optimistic that the retailers will be able to navigate the noise out there with the retail chain and I mean with the product and labor shortage issues, but we're trying to be prudent here in terms of establishing guidance. But the other factors are higher operating expenses. I believe there is some seasonality that generally occurs in the fourth quarter, plus the fact that we are going to be increasing the hours, our operating hours by one hour through a lot of the centers throughout the portfolio for the holiday season, and the one final component is lower straight-line rents we expect in the fourth quarter. The third quarter did have a benefit of about a penny where we restored gap rents for some tenants that moved from cash basis back to accrual.

Okay, got it. And yes, actually following up on that, that's helpful on the straight-line piece, but were there any additional with that rent collections from previously reserved amounts included in minimum rents or in the bad debt line that we should consider stripping out of the run rate?

No, there was nothing significant in the third quarter that was one-time.

Okay, if I could just get one more in and as you look ahead at the leasing environment do you expect the lower recapture activity to persist into 2022? Will 2022 be a more muted year for unexpected vacates either due to bankruptcies or restructurings?

Yes, that's what we're expecting, less. Thanks, Todd.

The next question is from Samir Khanal of Evercore ISI. Please proceed with your question.

Yes, good morning, everyone. Hey, Steve, I guess maybe just provide a little bit more color on the pipeline. I guess the leasing pipeline looks like you're up more than 100 basis points this quarter, so I'm just trying to figure out how to think about occupancy over the next sort of in the fourth quarter here and kind of into next year?

So our leasing team has never been busier. There is great momentum. I think the momentum really started at the beginning of the year, but continues to build, and it's really with some of our best retailers that are either looking to expand existing stores because of their success will grow across our portfolio. I also talked about the home category which is something that we're leaning into extremely heavily. A lot of the markets where our shopping centers are positioned have a great housing component surrounding and therefore great customers for these home products, particularly those at value. So, stores like Restoration Hardware, Crate & Barrel, and Mitchell Gold are all looking at our portfolio to grow their concepts, and those are always great traffic generators, and that's really what it's all about, making sure that we've got a great mix, well-merchandised, so our customers will come back more frequently and stay longer when they come and join us.

Thanks for that. And I guess my next question is on the other revenues line item, which has certainly been up nicely here. I guess just maybe take a step back, talk about what that opportunity set looks like over the next 12 months as we think about growth and maybe talk about how many properties you have touched so far and how much more you can do on that end?

When we pivoted and put our general managers in charge of our shopping centers and running their businesses as if they were the CEOs of those centers, we incented them across the portfolio to go out and build that business. We've got a great strong in-house corporate backbone in order to establish guidelines, marketing strategies, and approaches to executing this business, but a lot of the transaction is really being done on the front lines. We get about 150 million people a year coming through our shopping centers, and based on those numbers, there's a lot of eyeballs, and we've discovered lots of locations, places for us to do onsite center marketing, things like digital directories, backlit sign boards, and partnerships with certain retailers that allow them to take over car doors in a shopping center or parking fields, just in advance of any particular promotional activity. By setting up a team to strategically target that business, we've seen great success. Now going into the holiday, we're doing a lot of our tree lightings and a lot of our Christmas celebrations, much of that business is sponsored by local businesses. So once again, kudos to our general manager team who is out there not only working on some leasing initiatives in our shopping centers but also growing our marketing partnership line item. We think it's a great business for us. It’s one that is sustainable and one that will continue to grow at least in the near future and into 2022 as well.

Thank you.

The next question is from Caitlin Burrows of Goldman Sachs. Please proceed with your question.

Hi, good morning, everyone. Maybe starting with the national projects, I think you guys previously announced that when you got to 60% lease, you would begin construction, and anticipated getting there in the beginning of 2022. So, I'm wondering what the latest is there and if you think you're on track to start the development in early 2022?

Yes, Caitlin, we're on track to start the development.

Okay great, and then beyond debt repayment and in the absence of additional development, I'm wondering what opportunities are out there for redeployment of excess cash? Are there active and accretive acquisition opportunities? And I think in the past you've also talked about an outparcel opportunity, just wondering if you think you’ll move forward with either acquisitions or outparcel development?

Well, starting with acquisitions, yes, there continues to be some great acquisition opportunities for us out there that we're reviewing, and obviously when there are deals to be discussed, we'll raise them on the call. But you raised the peripheral land, and that's a big part of the business going forward for us. There are about two-thirds of our properties that have un-monetized peripheral land, and as our shopping centers are at the center of the energy in the geographies that they serve, that outparcel land is just raising in value. We've recently set up a peripheral land team with a professional just running that business for us because we see tremendous upside, not only next year but in the years beyond. It will take a while for that to start positively cash flowing because much of that land is currently raw, but we have opportunities with build-to-suits which we'll deploy capital obviously with appropriate returns, but also even ground leases where a retailer may have to build their own facility, this can take a little bit of time for that to cash flow. One recent transaction we just made was purchasing seven acres adjacent to our property in Westgate, and we’ve got great plans for that. As you're aware, our Westgate center sits about less than half a mile from the Arizona Cardinals Football Stadium, and there's great opportunity not only for weekend parking revenue on that site, but also additional businesses being established and we're looking into that right now. More to talk about hopefully next quarter.

Okay, and then maybe just a quick follow up on that. So, it sounds like there are a range of opportunities available for the lands you just bought, so I don't know if you'd be selling some, but otherwise could range from ground leases to build-to-suits or regular outparcel developments and parking—all of those could be mixed in?

Yes.

The next question is from Craig Schmidt of Bank of America. Please proceed with your question.

Thank you. Yes, I wonder if you could give me examples of some of the entertainment concepts that you're adding to your non-apparel growth categories?

Well, we've got two leases out right now that just unfortunately, I don’t want to share the name of the retailer until we execute the lease for a number of reasons, but there’s some of the—let's just say some of the larger, and I can share with you some of the types of uses, things from golf to darts to ax-throwing, places that are great gathering places for individuals. These are things that we are working on adding not only in line in some instances but mostly on some of our peripheral land. And they're great traffic generators. They also, you know Craig, extend the stay of the shopper; a lot of those buildings stay open well past our closing hours, so we can keep a customer onsite far longer.

Great, that's helpful. And then I just—I’m wondering, a lot of people are talking about a potential stronger sell-through given the lack of inventory for the more traditional store outlets. Could that be a problem for the outlet stores in the coming seasons, because those sell-throughs are stronger? And what are the outlet stores doing to ensure that they don't run into a supply problem after the holiday?

Well, you know we've really temperature-checked and spent the last few weeks speaking to a lot of our retailers and visiting stores. We're all very pleasantly surprised with how well-staffed and stocked a lot of the stores, particularly in our portfolio are. I think a lot of retailers, particularly the major ones in the outlet business, have thought about these issues months in advance and planned accordingly. They've bought for these stores and they've bought for the channel. The value channel, as we've mentioned many times, we believe is probably the most profitable channel for a lot of the retailers, and because of that, they nurture that business to make sure that they are going to be appropriately stocked going into the holiday season.

Thank you.

Thanks, Craig.

The next question is from Michael Mueller of JP Morgan. Please proceed with your question.

Yes, hi. Steve, just wondering on the rent spreads you mentioned percentage rent is not in there; I understand that, but if you're thinking about the out-of-the-ordinary shorter-term heavier percentage rent deals with restructuring and COVID, if you would adjust the spreads for that, how different would the numbers have been compared to the reported numbers?

Hi, Mike. We haven't done it that way just for a few reasons. One is that the variability of that number and what that could really be going forward. What we could tell you is that if you look at the overdrafts on a per square foot basis, it's around close to $2.5 a foot, which is significantly up from where we were in 2020 and in 2019.

Got it, okay. That, yes, that was it. I appreciate it. Thank you.

Thanks, Mike.

The next question is from Floris van Dijkum of Compass. Please proceed with your question.

Good morning, guys. Steve, a question, obviously the occupancy levels are very robust for where we are in the cycle. Part of that is, as you mentioned, the shorter-term leases. Can you maybe walk us through what percentage of your portfolio is on short? I think 19% of your space comes due next year, which is at least 5% higher than what you typically would average? What percentage is temporary right now? And then maybe walk us through the levers, obviously converting that to permanent would first of all presumably increase your base rents, but also your recovery ratios because typically the short-term tend to be gross, whereas the other ones tend to be more net. So maybe talk about the impact that you see potentially on your operating margins and on your NOI going for next year and beyond?

I think you're heading completely in the right direction. First of all, as far as our short-term temps are concerned, that's maybe just above 10%. But again, when we last year, when we got a million square feet back, and then 150,000 square feet back this year, we immediately leveraged our general managers to go out and be leasing agents. And so now 36 new leasing agents are on the team and out doing a lot of that short-term leasing to ensure that our spaces are filled, lights are on, vibrant, occupied, and most importantly, cash flowing. From a shopping experience, obviously a vibrant shopping center makes people want to stay longer. And, you know, I've said before, but I guess I'll say it again in this context, that a lot of our shoppers don't necessarily know the difference between a short-term lease and a full-term lease, but they definitely know the difference between a closed door and an open store. For us, we like to have as much open vibrant real estate as possible. So a lot of that short-term space we've been pretty successful over the last quarter or two, converting it into full-term leases. I've got some great examples of those, Mitchell Gold, Tory Burch, UGG, HUGO BOSS—some of our better tenants popped up in some of our shopping centers, and based on the successes that they've had, we've converted them to long-term leases. Obviously, it's significantly better market and significantly better margins.

Thank you. Maybe the other thing I noticed your leasing costs, your TIs were down significantly from last year. I think it was 27 versus 63, 64 previously, is that a sustainable trend in your view?

No, I don't think so. I just think they were down because obviously there were some shorter-term leases, and obviously shorter-term leases mean less TI. With the leasing cadence beginning to pick back up, the terms get longer, the deals get higher rents, more favorable deal terms for us. Obviously, I think the TI will come with that.

Okay. Can I ask one more question maybe? I noticed there are still a couple of assets out there with very low occupancy, in particular Howell and Foxwoods, and I think Atlantic City as well. Are you beginning to become more ruthless when you look at your assets and also where we allocate capital, and what should we imagine is in store for those assets?

Well, we're going to be strategic with those assets and then obviously Foxwoods, the unfortunate story of Foxwoods, which is our only enclosed shopping center in the portfolio, that particular center really suffered from the hotel business, the international tourism business, and obviously gaming and entertainment all being down over the last year, so that's going to take some time to bring that back. We are working on a local leasing initiative to help build the occupancy up. We think it's a beautiful shopping center and when the casinos are back in full swing, that center seems to do pretty well. So, we are going to continue to invest in leasing efforts at that particular center. Howell is a center in a market that will, once again, it’s the energy in the market that it services. it’s become the regional mall in that geography, and we've got some strategies associated with that one as well. You talked about Atlantic City, and the question was asked earlier about some of the entertaining uses; we have a whole zone planned for entertainment in Atlantic City that we're working on executing right now, which we think lines up with what the Atlantic City customer is looking for. You know, Atlantic City and Foxwoods are probably two of our centers that rely a little bit more heavily on international tourism than most, and with the international tourism coming back next week, we think that they'll probably be on a path to both of those centers as well.

Thanks, Steve. That's it from me.

Thanks, Floris.

The next question is from Katy McConnell of Citi. Please proceed with your question.

Hey, good morning. It's Michael Bilerman here with Katy. Steve, if we can just go back to the percentage rent over the rent discussion, if we just stick with third quarter results, how much of that $8.6 million was percentage rent only deals versus just your typical overage rent, which historically was never a big part of Tanger, but obviously given the sales growth this year, maybe some of those kickers kicked in? And I just wanted to dive a little bit deeper to understand some of the dynamics that are going on with that?

Look Mike, I'll share the dynamics and I'll let Jim give you a little bit more detail on the numbers. But just broad strokes dynamics: last year we made the comment that we were really favoring occupancy when tenants were going bankrupt, and we felt the strategy was to save occupancy for some of these bankrupt tenants so that when they got sold, obviously a tenant in possession of space, we can certainly renegotiate deals going forward. But once they closed, it's hard to get them reopened. In a lot of those instances, we traded base rent for a variable rent component. Without getting into the particular tenant names, essentially, what we traded was downside base rent protection in exchange for upside, especially if the sales came back. As we're reporting, our sales are at an all-time high, so some of those exchanges involved lowering the breakpoints obviously but raising the payout rates. So with that raised payout rates in many instances, we saw our rents exceed what the retailer would have paid had they just left the deal alone. So it turned out to be a pretty good trade for us. As far as sales and traffic are concerned, we see the trend continuing to build. We are optimistic about our outlook for sales, and we’re doing a lot of things differently on-center and off-center to drive traffic. Our traffic numbers are up. We're going after a much younger consumer, and by reaching out to that younger consumer, we’re seeing that shopping pattern come back to our shopping centers so I think there’s a strong story to tell with regards to our value channel and drawing new customers and keeping our loyal customers more engaged and driving sales and traffic on-center today and in the future.

And then how, I mean I guess there is, Jim talked before about fourth quarter being more conservative on percentage rents. If this is the case where sales are going to continue to grow and the fourth quarter typically is your best quarter in sales, given the holiday season, and if some of those retailers convert their percentage rent deals or renegotiate with you, I would assume it's not going down. Right? I would assume you're going to convert that percentage rent to a higher existing base rent. And so I'm trying to understand why there would be a decline going back to, I think it was Todd's question, the sequential decline if anything your percentage rent should go up in the fourth quarter, and if you're converting those percentage rents, then your base rental rate should go up or stay relatively flat?

You're absolutely right. I think we were prudent in our guidance. There was a lot of noise in the market with regard to logistics, and product. As I said, over the last few weeks, we've been around the horn with our top guys, our top retailers, on the phone with them, making sure that they'll have plenty of products in the store. The early temperature checks that we were taking with the retailers felt pretty confident that they would have product. But again, we guided prudently, but we're still optimistic with regard to sales performance, particularly in the fourth quarter and beyond.

I guess, can you break out maybe the occupancy costs? You broke out, I think you said 8.4%? How much of that, how has that shifted between percentages in the base? And do you have any concern at all of converting these percentage rent deals or the breakpoints where it has been a great deal for Tanger? I definitely agree with you, the strategy has paid off, but are those effective payments on sales now too high for the retailers relative to their profitability of that store?

I think no. And I think that first of all, 8.4% we're probably the cheapest bricks-and-mortar channel out there for any retail business, street, mall, whatever bricks-and-mortar business you're in. So I personally think there's probably still some upside in that occupancy cost. I also think what's happening right now is we're converting some of these shorter-term leases into longer-term deals, we're converting some of that overage rent into base rent, and that's a strategy for us. If there is a little bit of inflection in that, we're in the base rent collecting business—that’s where we get our value in the certainty of base rent—and that's the business of growing our cash flow and getting as much certainty into these numbers as possible. So we've had a lot of success converting short-term leases into long-term leases. We're having a lot of success, getting a lot of that overage rent built into permanent rents going forward, and we'll continue on that front.

It may be helpful as you roll into 4Q in 2022, given the shifts in some of these numbers, obviously it's $8.6 million, almost $0.09 a share in the third quarter, just to sort of give the Street a little bit more clarity on the relationship between that; maybe thinking about guiding to a total NOI number to something to give a little bit more differentiation so that the Street either doesn't get too far ahead on percentage rents, but sort of to understand the dynamics and maybe breaking down some of the portfolio would be helpful as you think going forward, as you have all this momentum?

Thank you. We'll take that under advisement, and I think that's a great call out.

I just want to take an opportunity to thank everybody for your interest in our company. On behalf of the entire Tanger team, we wish each of you a very happy and healthy holiday season. Goodbye.

This concludes today's conference. You may disconnect your lines at this time. Thank you for your participation.