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Good morning. I'm Ashley Curtis, Assistant Vice President of Investor Relations, and I would like to welcome you to Tanger Inc.'s Second Quarter 2025 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 IR website, investors.tanger.com. Please note, this call may contain 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. 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, August 5, 2025. [Operator Instructions] On the call today will be Stephen Yalof, President and Chief Executive Officer; and Michael Bilerman, Chief Financial Officer and Chief Investment Officer. In addition, other members of our leadership team will be available for Q&A. I will now turn the call over to Stephen Yalof. Please go ahead.

Thank you, Ashley, and good morning. I'm pleased to report another quarter of great results, driven by our internal and external growth initiatives, and we have raised our full year guidance. Core FFO was $0.58 per share, a 9.4% increase over the prior year, which was driven by robust same-center NOI growth of 5.3%. Operating metrics for the quarter were strong with occupancy increasing sequentially to 96.6% and blended leasing spreads of 12% over the trailing 12 months. We also delivered a solid increase in tenant sales, which were up 6.2% to $465 per square foot on a trailing 12-month basis, and traffic to our centers was up for the quarter compared to last year. This performance reflects the fundamental strength of our platform as well as the effectiveness of our differentiated and proven leasing, marketing and operational strategies and our successful external growth initiatives. Our merchandising strategy is yielding impressive results with our open-air outlet and newly acquired lifestyle centers. We continue to attract brands and retail categories that are new to our portfolio while expanding store counts with our most productive existing tenants. This thoughtful approach to merchandising is attracting a younger demographic while maintaining our core value-seeking shopper base. Across our portfolio, we are seeing our shoppers visit more frequently, stay longer when they visit and ultimately spend more. We continue to maximize value through peripheral land activation, merchandising optimization and investments in our centers. Population shifts and residential densification in many of our core markets have created the need for more restaurants, service uses, health clubs and entertainment venues, and the land adjacent to our traffic-generating shopping centers has proven to be a destination of choice for many of these national and local businesses. Our digital capabilities and marketing initiatives are driving strong engagement and delivering meaningful results. As I mentioned earlier, traffic to our centers was up in the quarter compared to last year, driven by a balanced marketing plan aimed at deepening connections with our core customers, attracting new and younger demographics and engaging our local markets as we see these populations grow. Further, participation in our enhanced loyalty program continues to expand, supported in great part by our retailer partners. Our proprietary loyalty program, TangerClub, enables us to deliver more targeted and compelling offers to our customers. These programs are driving results as we continue to see meaningful improvements to both traffic and sales. Our strategic Summer of Savings campaign and early back-to-school value messaging, which we rolled out last quarter, with aim on tariff uncertainty and provided a messaging opportunity to inspire customers to shop early and take advantage of favorable pricing and product availability. These initiatives with strong support from participating retailers, inspired targeted ad campaigns that appear in print, digital and social channels and have proven to be particularly effective. These proactive marketing programs will continue as we plan to reintroduce our Black Friday everyday messaging this fall where we celebrate the holiday shopping throughout November. Our marketing partnerships and paid media sponsorships business continue to grow our other revenues. These programs leverage our shopper traffic and offer participating brands the opportunity to reach highly engaged consumers throughout our centers and social channels. We are leveraging AI technology across our business to optimize customer service, enhance our data and analytics predictive functionality and enable more efficient use of resources across our enterprise. Our strong balance sheet, conservative leverage profile and ample liquidity provide us with flexibility to pursue selective external growth opportunities while continuing to invest in our existing portfolio. Our disciplined approach to capital allocation remains focused on generating long-term shareholder value through both internal and external growth initiatives. Our recent acquisitions, and Nashville development, have assimilated quickly into the Tanger portfolio. And in addition to growing NOI, they provided the opportunity to engage new retailers, restaurants, grocery, service and entertainment uses which will prove to be a valuable source of new business as we introduce them to the balance of our portfolio. In today's uncertain macroeconomic environment characterized by persistent inflation and shifting consumer sentiment, Tanger's value proposition is a constant that continues to resonate strongly with both shoppers and retailers. We remain confident in our strategic approach to leasing, marketing and operations, combined with our strong balance sheet and proven track record of execution, which provide us with multiple opportunities to pursue growth over time. I want to thank our dedicated Tanger team members, retail partners, shoppers and shareholders for your continued support. I'll now turn the call over to Michael to discuss our financial results, capital markets activities and updated guidance in more detail.

Thank you, Steve. For the second quarter, core FFO was $0.58 per share compared to $0.53 a share in the prior year period, driven by our strong internal and external growth. Same-center NOI increased 5.3%, driven by higher rental revenues from the continued strong leasing activity, which is leading to higher base rents and higher tenant reimbursements as we continue to drive total rents. We also saw continued growth in other revenues. For the first half of the year, same center NOI was up 3.8%. Our balance sheet remains well positioned with low leverage, ample liquidity and a largely fixed rate debt structure. At the end of the quarter, our net debt to adjusted EBITDA was at 5x, benefiting from the strong EBITDA growth and the retention of free cash flow after dividends with our growing dividend only representing about 60% of our funds available for distribution, or FAD. Outside of the leverage capacity from a liquidity perspective, we had approximately $614 million of total liquidity at quarter end, including $17 million of cash, $528 million available on our lines of credit and $70 million of proceeds still available from the forward equity that we issued late last year. During the quarter, we also continued to proactively manage and further strengthen our debt profile through a couple of refinancings, which increased proceeds, lowered rates and extended duration, and we continue to execute on our interest rate hedging strategies. At quarter end, 95% of our debt was at fixed rates and our weighted average interest rate stands at 4% with a weighted average term to maturity of 3.4 years. The next significant maturity will be our unsecured bonds next September 2026. In terms of interest rate swap activity during and post quarter end, we entered into interest rate swaps on the Memphis and Houston refinancings, fixing the interest rate on these loans through 2029. We have also now addressed the $125 million of the $150 million of interest rate swaps, which are due to expire in 2026, with the new forward starting swaps fixing SOFR at a weighted average rate of 3.2%, which represents a 40 basis point reduction from the expiring swaps at various points next year. The new swaps run through '27 and '28 as detailed in the supplemental. Based on our strong performance year-to-date and a positive outlook, we are raising our full year guidance, and we now expect core FFO per share of $2.24 to $2.31, representing core FFO growth of 5.2% to 8.5%. And we've lifted same-center NOI growth to 2.5% to 4%, up from 2% to 4% previously. Our guidance reflects our continued strong operational execution and does not assume any additional acquisitions, dispositions or financing activities. For additional information and assumptions, please see our release issued last night. We've greatly enjoyed having you at our centers through all of the tours, and we do hope you'll stop by and shop at Tanger Center before the summer ends. And we look forward to seeing and speaking to many of you in the fall at Evercore's Real Estate Conference, BofA's Global Real Estate Conference, Jefferies Real Estate Conference, NAREIT as well as a number of tours. Operator, we would now like to turn the call over for questions.

[Operator Instructions] The first question is from Jeff Spector from Bank of America.

I guess my first question, let's focus on the merchandising strategy. I know that's been a big effort to upgrade the tenancy and bring in different mix. Stephen, I know you talked about higher traffic. I guess can you just talk a little bit more about that effort and how that's tied to the improvement in sales per square foot?

Thanks for the question. So [indiscernible] macroeconomically, there's not a lot of new development happening in the retail space. And as a company, we consider our retail space to be more valuable every day. That being said, there's a lot of retailers that are actively looking for space in our shopping centers, both in our popular top markets, in our mid-tier markets, and we see a lot of expansion from retailers in both of those -- in those shopping centers, from our lifestyle centers to our outlet shopping centers. The brands that are looking to get in are brands that are new to outlet. So we're growing some -- we talked about Sephora last quarter and the proliferation of Sephora across our shopping centers, which has been a great brand, not only attracting their core consumer but bringing a much younger consumer into our shopping centers. We're also going after a lot of food and beverage as populations begin to shift to some of those markets that were typically tourist- driven markets that are now primary resident markets. We're seeing the need for food and beverage, more service orientation and some entertainment type uses that were either are taking space in line or on our peripheral land. I think the combination [indiscernible] of all those has caused a lot more traffic to our shopping centers. [indiscernible] a lot more frequency, particularly from our local customer base. And ultimately, that's where we see a lot of pop in our sales.

Great. And then my follow-up question. I know last quarter, you talked about starting back-to-school early with concerns over tariffs and inventory, you put that strategy into place. I guess, did that help in the quarter? And how are you now thinking about inventory for back-to-school in the holiday season?

Yes. Thanks for asking that question, Jeff. As far as the early back-to-school, yes, we think that's resonating. We've seen a lot of traffic growth where we've seen a lot of pop most recently is also in tax-free days and a lot of the centers that we have in the South have just experienced tax-free day with back-to-school shopping being the second biggest shopping holiday of the retail calendar. Our early initiative to get folks out as early as June resonated with a lot of the consumers that we're looking to who might have had some uncertainty with regard to the tariff impact or macroeconomic impact. We want to get consumers out earlier, get them shopping so they could find the brands they wanted at the best possible value. We saw tremendous traction. Some of that was attributable based on some of the social and digital initiatives that we put in front of our customers. So we're able to actually see the data in real time. And going into Q3, I think there was far less impact, particularly from a traffic point of view than we had thought. I think most of our retailer partners are well inventory. There's a lot of product in the store in our value channel. We still see pricing very compelling, incenting customers to come to shop with us. And I remind you, I think I said it in my opening comments, we continue to anniversary our every day of November is Black Friday sale this year. So keeping the selling theme in front of our core shoppers as we get into the holiday selling season.

The next question is from Greg McGinniss from Scotiabank.

I wanted to touch on this remerchandising a bit more as you bring in more differentiated tenants into your outlet centers and you've increased traffic and stay time. I'm curious how far along this remerchandising process you feel that Tanger has come? And if you could give us some context for this portfolio evolution, whether that's percent of non-apparel and footwear from a few years ago versus today and where you're expecting to go? Or any commentary with regards to what you expect to happen on the remerchandising effort long term?

Yes, sure. Look, again, I think remerchandising is a process that goes on in perpetuity. There's no end to remerchandising. There's always going to be brands that have stopped investing or just are losing a little bit of their market share to other newer brands. We've got a great leasing team that's out there every day speaking to tenants, maybe a year, 1.5 years out that haven't necessarily done deals in the outlet space. They're direct-to-consumer brands. They're specialty store brands that think 1 day, the outlet business might be something that they'd invest in. So we're constantly a year, 1.5 years out talking to brand-new retailers. I talked about Sephora with Jeff. I use that as an example because they only recently discovered the outlet business, and that's a brand that's been in business for years and years. So as we -- I guess the transition is really -- it's on us to make sure that the brands understand that there is great value in the outlets. But in addition, there's also a lot of customers that shopped over 125 million customers a year come through Tanger Centers. I think that's a lot of folks for brands to get their customers in front of. And so we'll continue to remerchandise our centers. I would say, for many, many years to come.

Just a follow up on that in the near term, have your tenants or new potential tenants I guess, become more hesitant to sign leases until the tariff situation gets maybe more resolved?

I don't think we've seen that. I think that there's a tremendous amount of activity in our space. We -- this past year, we've done more leasing than we have in almost any other year, at Tanger over 2.8 million square feet of leasing. So there's a lot of activity that's going on in our portfolio right now. I think retailers are making long-term decisions. I think the tariff uncertainty that they're facing is probably -- it's a little bit more lumpy with regard to whether -- how it's going to affect them in the near term, but long-term leasing decisions haven't been affected. And in fact, I'll go back to what I said to Jeff, not a lot of new retail development happening in the United States because of that retail space is becoming more and more valuable.

The next question is from Craig Mailman from Citi.

[indiscernible] some questions about the growth algorithm here for you guys over the next couple of years, given the success you've had kind of early on and Steve, in your tenure, I guess, well, it's almost half a decade at this point. But one of the things I noticed, OCR is still at 9.7%, but your average price -- your average sales per square foot continue to go up. That's just one metric. But can you kind of give us a sense of the organic opportunity in the portfolio from OCRs, from the mark-to- market to kind of give us a sense of what -- how are you guys more to looking at AFFO growth, same-store growth could look like relative to peer average here over the next few years?

Well, look, the guidance is in the release. I can give you some generalizations based on the question that you asked. I think if you look at our spreads, you'll see our mark-to-market. We've had 14 or 15 quarters of positive rent spreads, which speaks to the fact that we think there's a tremendous amount of upside in rent. I think as poor performing retailers get replaced by better performing retailers, retailers that are doing more than mall average sales on a per square foot basis. I think we'll see an opportunity for us to continue to push our rents forward. Anybody have anything they want to add?

Yes, Craig, I mean, look, when we think about the value creation and driving ultimately cash flow is driven by the internal growth and our external growth activities and continuing to invest in our asset base and intensify and activate our peripheral land, and that's wrapped in a balance sheet that is in the best position relative to our industry at 5x debt to EBITDA with a significant amount of free cash flow. So our job is there's enough levers that we have to drive NOI, leverage our balance sheet to create long-term growth for our stakeholders.

Okay. That's helpful. And then I noticed there was an article about some additional leasing at Huntsville. Could you just run through maybe where that asset could be leased by year-end and maybe the economic uptick from some of those leases?

Craig, it's Justin. And I Appreciate you calling out our full price assets. Yes. So last week, we announced -- I mean, in addition to announcing early in the year, the Apple expansion and the Warby deal, Starbucks opened earlier this year. And late last week, we announced that [ Madewell ] will be joining us in Huntsville. LL Bean will be coming taking a significant portion of the old [ Bed Bath & Beyond ] box. [ Rowan ] will be joining us and Crocs just open. Additionally, at Pine Crust, we opened up a great new food and beverage tenant called Toastique that opened up about 2 weeks ago and Tecovas will be opening up later this year. So we have a lot of activity in our full-price assets. We're really bullish on it. As these tenants open up later this year, they'll annualize then in '26, and that's where we're going to see the financial impact of those brands.

Awesome. Can I slip one third one in there, it's quick. On your occupancy, you guys have Deer Park in there, but Main Event doesn't really commence for a few more months. Is the occupancy number, just to clarify, is that a leased occupancy or commenced occupancy the 96.6%?

Craig, it's Doug. We quote physical occupancy. So when a tenant takes possession of the space, they're in physical occupancy and Main Event has possession, they're building out their space right now. They'll open in the first quarter, but they're in our physical occupancy right now.

The next question is from Michael Griffin from Evercore ISI.

It seems like the national retailer concepts probably have maybe more certainty or clarity around their footprint needs despite the tariff uncertainty. But Steve, maybe you can give some context around the demand you're seeing from those regional and local tenants. I imagine that tariffs could crunch the mom-and-pop budget a little bit more than the bigger guys. So maybe talk a little bit about the demand from that cohort within your portfolio.

First of all, I understand it's a very small population of retailers that you're talking about and very, very even smaller population of our NOI. Again, it's still a very important part of our business. I think local retailers, particularly in some of our full-price lifestyle shopping centers are really important to the communities that they serve, drove great traffic from that local population. As far as my visits to shopping centers, which have been -- I've spent the last couple of weeks out visiting our centers. I haven't seen any impact to shelves. There's lots of inventory and a lot of supply. So I think a lot of the retailers or manufacturer distributors, I would suppose that the third quarter and fourth quarter inventory is really already cleared in the warehouse and sitting here in the United States for distribution. So I can't really report much issue as it relates to that group of tenants in our portfolio.

Appreciate the color there. And you've highlighted the continued resilience of the consumer at your centers. I'm curious if you've seen maybe a shift in customer demo have -- do you have any sense if consumers who may have traditionally shopped at full price retailers are trying to find a value at your centers? Just trying to get a sense about what the kind of customer profile looks like these days?

I would say anecdotally that people are actually -- we're seeing new customers to the outlet centers. And I think part of the reason why is because of the localization of those centers. So we built Nashville only 9 miles away from downtown Nashville. But a lot of our other centers have seen significant population shift where secondary homes or second homes have become primary residences. A lot of that driven by just the people moving out of cities and moving into different markets post-COVID. So what we've decided from a merchandising point of view is the more uses we can bring into one of our shopping centers, the better chance we have getting a car to park in one of our parking lots. And whether that's a customer or our core customer that's coming to shop value every day or it's a new customer that might be coming for the restaurant, the grocery store, the health club, the service or the amenities that we offer on center. If we can bring them in for one of those uses and get them to stay for the shopping, I think we're winning a new customer every day.

The next question is from Caitlin Burrows from Goldman Sachs.

Maybe just in the press release, you guys went through how you've renewed about 65% of the space set to expire in 2025. So I was wondering if you could comment on your latest thoughts on renewals versus retenanting and then what the status is of that other 35% of '25 expirations?

Caitlin, it's Doug. So we quote the renewed percentage that 65%. If you layer in the space that we've already re-tenanted or certain tenants that are relocating, we're at about 80% of the expiring population is addressed. And with the remaining 20%, we have active conversations and think that a majority of that space is going to renew.

Got it. Okay. And then maybe just on the acquisition side. So I feel like we continue to hear that the competition for acquisition deals is high. So wondering if you guys could comment on maybe the volume of deals you looked at in either 2Q or the first half and more broadly, how hard it's gotten to be the winning bidder on a deal? Or are you able to identify off-market or lightly marketed deals?

Thanks, Caitlin. We've been extraordinarily active across both of those fronts in terms of marketed transactions as well as negotiated off-market transactions. We feel where we're going to lean in is where we can really add value to what we buy. And I think that has been evidenced through Pine Crest, Little Rock, Asheville and Huntsville. And we're pretty unique and differentiated being able to look at both outlets as well as open-air lifestyle centers. And given our geographical footprint and boots on the ground at every one of our assets, we feel that, that gives us a competitive advantage in looking at the entire marketplace. And we have deals when we close them. The balance sheet is sitting in really good shape to be able to execute, running at 5x debt-to-EBITDA today and still having the $70 million of forward equity that we issued late last year.

The next question is from Todd Thomas from KeyBanc Capital Markets.

You touched on the increase in occupancy during the quarter, but same-store base rent growth was higher by only 1.8% year-over- year. And I heard the comments about Main Event. But I was wondering if you could comment on the portfolio signed, not occupied pipeline in total. What that looks like today? Or whether there was anything you can share regarding the timing of some of the lease signings in the quarter that was reflected in the occupancy metric, but that was not rent-paying during the quarter? Just trying to get a sense of the trajectory of base rent growth throughout the remainder of the year.

Thanks, Todd. So one part of it is when we are signing new leases, we're getting both an increase on the base and we're getting our share fixed CAM. And so depending on the type of activity, we're looking to grow our total rent. And so when you look at the P&L, you really have to look at both of those line items to be able to think about our total revenue growth, which is leading to NOI growth with our expense load. In terms of signed not open given the fact that our portfolio is pretty small tenant, we've talked about our average tenant size is 4,700 square feet across 3,000 stores, and the speed at which a tenant when we turn over to open is pretty short, we don't have a large signed not open pipeline. In fact, Main Event is probably the biggest component right now about 30 basis points that's been turned over that's not cash paying today that will become open next year. And then the rest is pretty small between quarter-to-quarter just given the short time frame 60 to 90 days between turning over and the store opening.

Okay. And then I noticed that the straight-line rent in the quarter was up significantly. I was wondering if there was any onetime or nonrecurring impact either related to the leasing or otherwise that we should consider moving into the third quarter?

Sure. Our straight line typically gets a little bit higher in the second and third quarters. It relates partly to the cadence of our occupancy. We've talked about troughing in the first quarter, building back up throughout the year, peaking in the fourth quarter. When tenants take over, and Michael talked about the 60 to 90 day build-out period, the straight line occurs when they take possession, the cash rent starts when they open. And so there's a little bit more straight line rent typically in the second and third quarters of the year, and we would expect that again this year.

Okay. Got it. So that will burn off a little bit moving throughout the balance of the year. And one more, if I could. Steve, you talked a little bit about the centers that you consider primary or that sort of fit into that localization bucket and have been benefiting from a broader use of tenants. And I was wondering how many of your centers do you consider to be in that bucket, if you will? What percentage of ABR or GLA or just number of centers, would you consider to fit that criteria? And then looking out longer term, are the centers that do not have that support from a primary population or that local market impact that you're discussing, would they be considered noncore?

I think where we are right now, all the centers in our portfolio are definitely core centers. It's just we address them differently. So we have a shopping center in Somerville, Tennessee, actually home of Dollywood, which was voted the #1 amusement park in the United States this month. That shopping center benefits from tourist traffic, 100% is one of our top producing assets. So it's really hard to sort of rationalize which ones do better from local trade, which ones do better from that tourist trade. We definitely market our centers a little bit differently. We have a far wider catchment as it relates to those centers that rely a little bit more on tourist destination or tourist population. The shopping centers positioned closer to the casinos, things of that nature, I think, definitely benefit from more tourist-driven traffic. But when Myrtle Beach and Hilton Head and Daytona were built 10, 15, 20 years ago, they were built for tourism and now are some of the fastest growing permanent population markets in the country. So the shift is happening rapidly. We're embracing the shift, but we'll continue to remerchandise our centers accordingly as that shift takes place.

The next question is from Hong

I guess my first question is just on thinking about same-store NOI growth in the second half of the year. You were 3.8% year-to-date, and it seems like the guidance implies some deceleration at the midpoint. Just wondering what's driving that?

Thanks, Hong. We are very pleased to be able to increase our full year guidance, bringing up the low end to 2.5%. And we think about the back half of the year, we still have a certain amount of uncertainty related to the macroeconomic environment, and the credit, sales environment, our operational expense cadence. So there's nothing specific in the second half relative to the first half, and that's why we have a range that's still producing a very healthy same-center NOI forecast for the year with a midpoint at 3.25%.

Got it. And I guess I think you still have around $70 million of forward equity to settle for the remainder of the year. I guess I'm curious what you would use the proceeds for if acquisition doesn't shake out?

Yes. We have time on that forward equity. We don't need to pull it down right away. And so we have that there to be able to fund any of our internal or external investments in addition to the balance sheet capacity that we have being at 5x levered.

The next question is from Floris Van Dijkum from Ladenburg Thalmann.

I guess could you maybe talk a little bit about the internal growth prospects regarding your 10% -- estimated 10% temp tenancy? And also, how much more fixed CAM can you increase your portfolio by over the next, call it, 6 quarters?

Floris, I'll take the second one first. I wouldn't be focused just on the expense reimbursement side because when we're negotiating with a tenant, like to drive total rent. If that means higher fixed CAM at the expense of base, we'll just do that because we're driving our total NOI growth at the end of the day. So there's not a specific formula to look at, and there's a wide variety of types of leases as well, some that don't pay us fixed CAM. So it really depends on the leasing activity that we're doing. In relation to the temp tendency, that's one part of the NOI growth that we could see over time, whether that's driving rents on our existing permanent base and continuing to re-tenant, but also continuing to use the temp business as a strategy because the consumers that come shop with us they don't know the difference between a temp tenant and a permanent tenant, but they do know the difference between an open store and a closed store. And so we want to keep our assets vibrant and be able to continue to drive NOI over the long term, and that's one source of potential upside that we could see over time.

Just to make sure that I understand correct, Michael. Because I don't -- obviously, the temp tenants don't pay fixed CAM. What is your fixed CAM percentage today on your overall tenancy. Where do you think you can push that? And then do you expect as the retailer demand continues to be really strong. I think historically, your temp percentage was closer to 5%. Do you think -- how quickly do you think that 10% goes back to the historical norms? I guess, that was what I was getting at in my question.

Yes. I wouldn't focus too much on the fact that temp doesn't give us fixed CAM. I look at it more. We look at it more what is the total rent that we can get for that space from a permanent tenant relative to the temp tenant. We talked about anywhere from 2 to 3 to 4x the rent. In terms of the cadence of that, you are right. Historically, we've operated in the 500 to 600 basis point range in terms of temp tenancy. We are higher than that today. But we don't have a time that we want to bring it down. We're trying to drive our total NOI growth and continue to diversify and remerchandise our centers and it provides us a pool of leases that we think that there's upside, and we'll continue to see that upside over the next few years.

And maybe the second question I have is maybe more of a Steve question. But Steve, you talked about bringing new retailers to the outlets. Can you talk -- you mentioned Sephora. How are those discussions going? Are you seeing increased demand from retailers for the outlet space, in particular? And how much growth do you think you could get over the next couple of years from new retailers to the outlet format?

Look, we're out in front of retailers all day, every day. So we have a team just thinking about new business and their sole mission is to go out and speak to brands that just haven't discovered us yet. And there's plenty of those brands enough to keep a couple of people occupied a full-time job. So it's exciting when new brands want to enter. We just recently did our first Mark Jacobs deals in the outlet space. And their performance has been amazing. They're drawing a customer. They've got fans of that brand. There's a lot of things that new brands do for us. Aside from the fact that we get great productivity, they pay market rents. They also draw their own customer base to our centers. So as these new brands are discovering our product, so are some of the customers that are loyal to that brand. I think that's just a great win-win for us. It's hard for me to sort of guide to how big that business can be. But if you go back 30 years, I've been in this business leasing outlets for a really long time. An outlet center of 30 years ago looks completely different than the outlet center of today because there's been constant evolution of brands discovering and replacing brands that have sort of performed, I guess, less than to their capabilities. So we're going to continue to grow newness. We're going to continue to bring in new brands, new uses, types of tenants. And food and beverage, you can say, in the last 5 years is relatively new to the outlet space. But as that customer becomes a little bit more localized, those are the things that they're demanding when they want to come and shop with us. And we think it's really smart for us to play into the expanded consumer base [indiscernible] drive traffic into our centers.

The next question is from Rich Hightower from Barclays.

I think maybe just to put a little bit finer point on some of the occupancy questions so far on the call. I think we understand Deer Park, we understand Huntsville. But maybe in the context of the guidance and the different swing factors, are there any other known move- outs, move-ins, cash versus straight line? Any other elements you'd like to sort of call out that we should be aware of over the next couple of quarters?

The big one was Forever 21. But we absorbed Forever 21. We've been able to place where we've got 5 of the design Forever 21s already leased, and we'll probably have the rest leased by the end of the year. So I think that speaks to high demand that retailers have the space in our shopping centers. It also speaks to the fact that we're going to be -- we're going to curate. We're not going after just retailers just to fill space. We're looking for retailers that really to bring a little bit more to the party. We want to drive customers. We want to be interesting. We want to be the shopping center of choice in the geographies that we serve. And because of that, we're going to be real smart about how we curate centers and make sure that we're bringing in not only retailers that can pay the best rents, but also retailers that will do the best volume and draw the most amount of shoppers to our centers.

Okay. So I appreciate that. Just to be clear, so Forever 21 would probably be the biggest swing factor to call out for the second half in that regard? Just to clarify?

I would say yes.

Okay. Great. And then more broadly, and I think you addressed this maybe from a different angle before. But just as far as the double- digit leasing spreads for the past many quarters and obviously, a very overt remerchandising strategy that I think you've articulated very well. Is there a natural runway for that given sort of existing tenancy that's probably not leaving the center in the next several years? Is it -- I mean, can it go on for years and years? I mean, how would you sort of think about that runway going forward?

Look, again, as I mentioned earlier, we're creating our own demand. And I think demand is sort of a virtuous cycle in that the better retailers bring into the center, the better sales performance they execute to and then the more rents that we can ultimately charge. But as centers become more popular as sales continue to grow, more retailers take note and want to be part of that. So in this environment right now with very little new retail coming online, retailers are looking for places where they can do business. They're looking for voids in the market where they have distribution. Look, a lot of these brands, we could be competing with a department store business that may be contracting where retailers are looking for places to put their freestanding stores so they could execute and get their product in front of a customer. That -- I don't see an end to that in the foreseeable future. And as I mentioned earlier, with a team of people that are out of 18, 24 months looking at new brands to bring in. There's a lot of interest in being part of what we're doing over here at Tanger.

Next question is from Tayo Okusanya from Deutsche Bank.

Solid results here. Wanted to follow up on Hong's question around guidance. Again, the low end of same-store NOI raised to 2.5%. Curious if what's driving that is really more occupancy as you've kind of discussed some of the occupancy gains? Or whether there's an OpEx component to it, if there's a bad debt component to it?

Thanks, Tayo. I mean, like the range, both at the high and the low end, has got a variety of assumptions around a lot of the variables that impact those revenues and expenses. And so we give a range that we feel comfortable with. We are pleased at the midway through the year to be able to lift our FFO guidance as well as with our same-center guidance. And at both ends of the range, there's varying assumptions around occupancy, tenant credit, sales environment, our variable operating expenses, the downtime, the spread. So there's -- and all of that goes into it to a range that we feel comfortable and. As part is in 90 days, we get to report again and see where our results are and update guidance again at that point.

Got it. And then a quick follow-up as it pertains to tenant credit. Could you just talk a little bit about your exposure to like Torrid that I believe kind of recently filed bankruptcy. Again a lot of talks about [indiscernible] may also do something. So how you're kind of thinking about some of those names and maybe possibly some other watchlist tenants?

So let's just a step back from it overall. Our watch list remains at pretty manageable levels. In regards to the tenants we talked about, they're not top 25 tenants for us. I'd say the store size, specifically on the [indiscernible], it's pretty small. And so while there may be a number of stores, it's a relatively smaller part of our base rent.

If I could add, I've said this on past calls, I'll say it again, outlet stores have tended to be very profitable for brands. And some of the last stores that brands will close in a restructuring. So even though a brand may be declare bankruptcy, I guess, in the case of [indiscernible] or the brand that you mentioned, do I think that as they work through their population of stores they're going to keep and stores are going to reject, I guess, is very few what happened in the outlet space.

The next question is from Vince Tibone from Green Street.

Could you help quantify the near-term outparcel opportunity in the portfolio in terms of how many you expect to be actionable and monetizable over the next 1 to 2 years? And then also, kind of what do you anticipate being the most common structure here, whether it's selling the dirt, doing the ground lease, or doing a full development that a tenant would ultimately release? Just trying to get a sense of how much capital will be committed here, and then how much NOI ultimately generated too over the near term?

We've said in the past that the value of our outparcel business is probably equivalent to one of our top shopping centers. I think that number continues to grow as we buy more shopping centers that give us more outparcel capacity. What's interesting from a capital allocation point of view as it relates to an outparcel deal. We're not looking to sell outparcels. We're looking to lease them. But typically, the investment that we're going to make in an outparcel, whether it's a build-to-suit or a ground lease deal. We don't make the investment until after the lease is executed. So it's a -- there's typically high teens to low double-digit returns, but we have already had those deals executed before we commit the capital from a risk profile.

No, that's super helpful. Maybe just -- like, I mean, how many of these have you completed over the last, I don't know, 1 to 2 years? And is that -- I'm just trying to get a sense of how many of these is this going to move the NOI needle?

Yes, Vince, this is Justin. So say, over the last 1 to 2 years, we've had a handfull come online and start rent paying, but we really pinned our ears back and focused on this business. And what we can share with you is we have deals coming online over the next 12 to 18 months with brands like Portillo's and Seven Brews. We opened up a [indiscernible] Ottawa. Shake Shack is opening up more stores with us on the peripheral land. We're doing deals with First Watch and 151 coffee. So we have a lot in the pipeline. We have a lot that are going to be coming and monetizing and cash flowing over the next year, 1.5 years, and we're really excited about the prospects of this business.

Thank you for all that detail, that's helpful. And then last question for me. Could you just discuss high level about the re-tenanting economics and Ultimately NOI upside from the former 21 spaces? I know you comment in terms of how many were already leased? I'm not sure if those are all permanent or temp deals. But I just know they paid so little rent prior to bankruptcy. I would imagine there's a pretty sizable mark-to-market opportunity there, but not sure that compares to the suite size and if you have to demise in certain cases? So I'd just love to kind of hear how you view the opportunity there with those boxes.

Temp leasing those boxes quickly was a great trade for us because the rents being as cheap as they were. We were able to at least maintain or grow the rents on a near-term basis as we're making those decisions that you just talked about. Do we replace the complete box? Or based on the positioning in the shopping center, do we break them in half and redemise them. We'll make those decisions based on the ability to generate rent and get exciting tenants into the space. We're working with a number of tenants and a lot of deals currently. I think there's a lot more rent that you can get from smaller -- to lease smaller spaces. So where that makes sense, we'll make that trade. So I think we're in a pretty good position. I've said it a couple of times on the call, I'll repeat it again. I think our real estate becomes more valuable every day as there's less new space being added to the market. And as there's retailer demand continues to increase to be in our portfolio, we're going to make sure not only that we choose the best retailers to fill the space. We're going to make sure that they're going to be the most productive retailers, and we're going to bring in retailers that are going to draw up new traffic and new shoppers to our centers. I think all of those things together, all ships rise. And ultimately, that's how we're going to grow our value and NOI over time.