What happened

The stock market was having an all-around strong day on Tuesday, and real estate investment trusts, or REITs, were among the strongest performers.

Tanger Factory Outlet Centers (SKT -0.07%) was having an exceptionally strong day, with shares up by nearly 10% at 12:30 p.m. EDT.

Person with shopping bags walking toward a store entrance.

Image source: Getty Images.

So what

On Monday afternoon, Tanger provided an update on its business that seemed to make investors smile. The company said it collected 85% of its billed rent in August, an improvement from its 81% rent collection rate in July. And for the second quarter (when Tanger allowed most of its tenants to defer April and May rent), the company has now collected 40% of billed rent, up from the 33% it had collected at the end of July.

Furthermore, and more importantly, Tanger reported that it had returned to positive cash flow in August and has repaid all of its credit lines. The company now has $606.6 million in liquidity, including its untapped credit line, which creates a ton of financial flexibility going forward. For context, this is more than Tanger's entire $580 million market cap.

Now what

Tanger's stock price is still down by 58% in 2020, but this update shows that Tanger's future could be significantly brighter than investors had feared. The fact that Tanger is generating positive cash flow is very encouraging, and if its rent collection rate continues to improve, Tanger could choose to reimplement its suspended dividend sooner rather than later.