Outlet king and South Beach regular Steve Tanger puts “sale” signs up all across America—and that’s a good thing for our economy.
Steve Tanger at his condo at the Continuum South Beach.
Anyone who wants to keep his or her finger on the pulse of the economy needs to know what’s happening in retail. American consumers traditionally have served as the engine of economic growth, and their discretionary spending accounts are the largest contributor to the country’s gross domestic product.
And who better to ask for a read on the health of consumers than Steve Tanger, president and CEO of Tanger Factory Outlet Centers. The company, founded by Tanger’s father in 1981, became the first outlet mall business to be listed on the New York Stock Exchange in 1993. “We’ve been doing this for 33 years, and have never ended the year with an outlet center less than 95 percent occupied,” says Tanger, a resident of South Beach.
As 2014 drew to a close, the economists were in a bind as to how to interpret trends. Black Friday sales were disappointing; consumer confidence numbers unexpectedly retreated. On the other hand, overall retail sales remained relatively buoyant. And Tanger, eyeing results at the hundreds of top brand-name retailers that sign leases at his company’s malls, was taking the rosier view. “Our traffic is up,” he says. “We’re opening three new shopping centers.”
Each of those, Tanger says, is now on track to open with occupancy rates of 90 percent or higher in the new regions—Grand Rapids, Michigan; Savannah, Georgia; and the Foxwoods Resort casino in Connecticut—bringing the number of Tanger-owned malls to 47 in the United States and Canada, capping a $500 million expansion program that began in January 2014 that Tanger describes as “the largest building boom we have had in our history.”
Tanger’s confidence in the future of retail—and the value of the company’s underlying real estate assets—lies in his view of the broader economy. “It’s doing a lot better than people had anticipated,” he says. “People are seeing the value of their investments [climb] substantially, followed by the value of their homes.”
Tanger has made a home base for himself in Miami Beach, close to favorite hangouts Zuma and Cipriani (“I love the atmosphere at Casa Tua!”), and he plays golf at Indian Creek (where he quips that “my handicap is my swing”), but he hasn’t been able to open a Tanger outlet mall nearby. Not that Miami is short of alluring retail. “There are other great malls; there is the Design District, which will expand and thrive,” he says. “It has been fascinating to watch it all develop: Five years ago, Lincoln Road was nowhere. Having attractive shopping experiences is simply part of life’s collage.”