In a recent transaction, Ben Carter Enterprises acquired full ownership of the 56 acres of outparcels surrounding Tanger Outlets Savannah, including the existing Applebee’s and Panda Express sites. Simultaneously, the firm had its stake in the upscale, 420,000-square-foot designer outlet center in Pooler, Georgia, located adjacent to the Savannah International Airport, redeemed by Outlet Mall of Savannah LLC. 

As the sole owner of the outlet center mall site, Tanger Outlets will continue progress on the Phase III expansion to accommodate retailer demand and welcome new restaurants: Texas Roadhouse, Rise Pies and Metro Diner. At 99 percent occupation, the development is poised for continued success. 

“We are proud of the high quality outlet design and fashion retailers we brought to the market,” said Ben Carter, founder and chairman of BCE. “Our team did a great job delivering the project and vision we promised.”

BCE’s plans for outparcel development are continuing as envisioned. The new ownership structure will allow BCE to develop the outparcels in a more streamlined process.

With Quito Anderson and Bennett Rudder at the helm, the BCE team will focus on finishing the next 500,000 square feet of retail, restaurants, hotels and auto dealers  surrounding the outlet mall. Outparcel development plans include a Holiday Inn and Suites hotel and Vaden Chevrolet of Pooler, which encompasses a car dealership, car wash, maintenance shop and seven-acre car lot. The hotel and dealership will open in 2017. 

Peripheral development plans also include a 151,000-square-foot shopping center, which will feature Dick’s Sporting Goods, Hobby Lobby, Home Goods and Ulta Beauty. The BCE team is actively negotiating a number of restaurant deals that will join Applebee’s and Panda Express. Additional for sale and for lease site opportunities remain available for restaurants, hotel, entertainment, medical and retail uses. 

“Tanger Outlets Savannah would not have happened without the city of Pooler's support and confidence in our team,” said Anderson, CEO of BCE. “Tanger Outlets Savannah is a place for families to shop, eat and be with friends. Creating places for people to enjoy is one of the greatest pleasures in the development business.”

Tanger Factory Outlet Centers, Inc., now owns 100% of Tanger Outlets Savannah after the redemption of its partner's ownership interest on August 12, 2016.  Serving the greater Savannah market since April 2015, Tanger Outlets Savannah is an upscale 420,000 square foot outlet shopping destination featuring more than 90 brand name and designer outlet stores, located in Pooler, Georgia adjacent to the Savannah International Airport. 

"We are pleased to add Tanger Outlets Savannah to our wholly-owned portfolio. The center is currently 99% occupied and is now undergoing a second expansion to accommodate retailer demand for space," said Steven B. Tanger, President and Chief Executive Officer. 

The joint venture distributed all outparcels along with $15 million in cash consideration to the other partner in exchange for the partner's ownership interest. Tanger paid a capitalization rate of approximately 5.9% based on a valuation of $197 million for the outlet center and the Company's forecasted 2017 property level net operating income (excluding termination fees and non-cash adjustments including straight-line rent and net above and below market rent amortization). The property is subject to a mortgage loan with the ability to borrow up to $100.9 million, of which $96.9 million was outstanding as of August 12, 2016. The loan bears interest at 165 basis points over LIBOR. The loan initially matures in May 2017 and can be extended to May 2019 at the borrower's option. Tanger contributed the $15 million in cash consideration to the joint venture with borrowings under its unsecured lines of credit. 

The joint venture is now wholly-owned and will be consolidated in the Company's financial results as of the acquisition date.  Prior to this transaction, Tanger owned a 50% legal interest in the joint venture since its formation and accounted for it under the equity method of accounting. However, due to preferred equity contributions Tanger made to the joint venture, and the returns earned on those contributions, Tanger's estimated economic interest in the book value of the assets was approximately 98%.Therefore, substantially all of the earnings of the joint venture were recognized by Tanger as equity in earnings of unconsolidated joint ventures. The Company plans to provide more details on the expected impact on earnings per share, including the gain to be recognized on its previously held interest, in connection with its third quarter earnings release once the acquisition accounting required by generally accepted accounting principles is completed. Tanger expects the transaction to be approximately neutral to 2016 funds from operations per share, excluding acquisition costs, based on in-place financing.