August 9, 2017

Tanger CEO Promises New Stores in Atlantic City As Occupancy Falls At The Walk

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The company that manages the retail outlets at The Walk in Atlantic City is working on bringing in new tenants after occupancy dropped to a more than five-year low earlier this summer.

The Walk, which has received just shy of $60 million* in funding from the Casino Reinvestment Development Authority since 2000, was a keystone of efforts to help diversify the city’s economy. But like malls and big-box retail, outlet stores have struggled to win over still cash-strapped consumers amid competition from online retail.

Tanger Outlets reported last week that occupancy at The Walk, which has about 100 stores, dropped to 87 percent in the second quarter of this year from 89 percent in the first quarter. That is the lowest occupancy rate since Tanger acquired the property in 2011. But the company said it was optimistic it would find new tenants.

“We’re also talking to several very exciting tenants about expanding in Atlantic City and adding to our group in Atlantic City,” Chief Executive Steven Tanger told analysts and investors on the quarterly results call. “It’s basically three tenants that closed.”

The Melting Pot on Atlantic between Arkansas and Missouri closed in May, citing the ongoing “economy shift.” There were already several empty storefronts on that block.

Tanger’s Chief Operating Officer Tom McDonough said on the call that a designer accessory retailer is working with the company to open six new stores in Tanger outlets this year. McDonough said most of the national retail companies that have announced store closures this year are not Tanger tenants. A spokeswoman for the company did not respond to questions about which stores could open in Atlantic City.

The occupancy rate at The Walk is the second lowest of any development in Tanger’s portfolio, behind its Ocean City, Maryland project which it acquired at the same time as The Walk.

Atlantic City receives a controversial Payment In Lieu of Taxes (PILOT) from The Walk, which has a tax-exempt lease on the land through 2101.

*This figure does not include money spent on other projects in this area, such as the $38.4 million Wave garage or the $1 million relocation of the laser lighthouse.

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