What happened

Shares of Tanger Factory Outlet Centers (NYSE:SKT), a real estate investment trust (REIT), fell roughly 10% in early trading on Thursday. The drop coincided with a market swoon on economic concerns and broader declines within the mall REIT space. But Tanger's fall was quicker and steeper than its closest peers, and there's material information in that move for investors.

So what

Tanger is unique among mall REITs in that it only owns factory outlets. It has been facing material pressure for several years because of the shift toward online shopping, which has been particularly hard on fashion retailers. That segment is sizable within Tanger's portfolio.

Facing vacancies, Tanger has long held that it just needs time to find new tenants. In a normal economic environment, that would likely be true. But these are not normal times, with the impact of COVID-19 already pushing a number of debt-heavy retailers into bankruptcy. Unfortunately, Tanger's ability to find new tenants in a timely manner is even more up in the air now than it was when the year started.

Two women in the front seat of a roller coaster

How Tanger investors are feeling right about now. Image source: Getty Images

Worse, as the U.S. economy appears likely to fall into a recession because of the efforts to contain the spread of COVID-19, there's yet another concern to deal with. Investors are clearly worried that Tanger, which just announced weak first-quarter earnings and suspended its dividend, won't be able to navigate the current slate of headwinds in a way comparable to previous experience. In fact, investor concerns have shown up multiple times in recent days as Tanger's shares have fallen faster and often further than peers. That was the case again this morning, as economic concerns drove markets lower. All of the mall REITs fell, but Tanger fell more quickly and further before recovering along with the broader market and its mall REIT peers. 

Now what

By the lunch hour on Wall Street, the market had pared its losses and Tanger was back to roughly breakeven. In fact, it even popped into positive territory for a little bit. Which exposes the volatility that investors should expect here. While today's roller coaster action will impact all of the mall REITs, it looks like Tanger, for right or wrong, is being more heavily affected by negative news. That's unlikely to change for the immediate future, so this is not a stock for the faint of heart.