Tanger Factory Outlet Centers, Inc (SKT) and RioCan Real Estate Investment Trust entered into an agreement to jointly acquire Cookstown Outlet Mall for C$62 million or $59.2 million.
Cookstown Outlet Mall is located approximately 50 km north of the Greater Toronto Area (GTA) and spans 161,000 square feet. This deal is a win-win situation for both the companies as RioCan will provide development and property management services while Tanger Outlet will offer leasing and marketing services.
This apart, RioCan and Tanger has also partnered to acquire approximately 50 acres of land in Kanata, Ontario, near Ottawa, to develop a Tanger Outlet Center. The site is located in the suburban Ottawa market of Kanata and will benefit from its access to the greater Ottawa market. The strategic location of the center and the high quality stores offer a lucrative investment opportunity. The site in Ottawa also expands their partnership beyond Toronto into other Canadian retail markets.
RioCan is Canada’s largest real estate investment trust with a total capitalization of approximately $11.9 billion as of September 30, 2011.
Headquartered in Greensboro, North Carolina, Tanger is a publicly-traded real estate investment trust (REIT). The company, through its subsidiary, Tanger Properties Limited Partnership, engages in acquiring, developing, owning, operating, and managing factory outlet shopping centers.
With the closing of this acquisition, the company will operate and own a portfolio of 38 upscale outlet shopping centers in 25 states, totaling approximately 11.7 million square feet, leased to over 2,400 stores that are operated by more than 415 different branded companies.
Tanger currently retains a Zacks #2 Rank, which translates into a short-term Buy rating. We are also maintaining our long-term Neutral recommendation on the stock. One of its competitors, General Growth Properties Inc (GGP) has a Zacks #3 Rank, which translates into a short-term Hold rating.
