When the COVID-19 pandemic started, Tanger Factory Outlet Centers (SKT -1.01%) was one of the hardest-hit stocks in the real estate sector. But things have changed. In this Fool Live video, recorded on June 15, Millionacres real estate analyst Matt Frankel, CFP, and editor Deidre Woollard discuss why Tanger could be such an interesting opportunity as the U.S. gets back to normal life. 

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Deidre Woollard: We have a question. "Assuming that Simon Property Group (SPG -0.63%) is the No. 1 mall REIT what would you say is No. 2?" Would that be Tanger for you?

Matt Frankel: Yeah. I guess, you'd call outlet centers malls.

Woollard: Yeah.

Frankel: In Simon, remember, they're the biggest player in the outlet space. They're not just malls, they're a big outlet REIT too. Premium Outlets is much bigger than Tanger. So I'd say probably Simon. I would have said Taubman, but Simon bought it.

Woollard: Yes.

Frankel: It's definitely not Washington Prime.

Woollard: No. Macerich?

Frankel: Yeah, maybe Macerich. There really aren't that many good options.

Woollard: Yeah.

Frankel: No, I'd have to say Tanger. If we consider that a mall REIT, I would have to go with Tanger. The one that I think has the most potential is, I'd probably say Seritage (SRG -1.50%). I think that has the most potential. I'm not going to go into a big discussion about Seritage because we've heard me do that many times in the past. But Seritage it's a sub-$1 billion company. If we knew that Seritage was going to be able to successfully redevelop all of its properties, if we knew that, it will be a $5 billion stock.

Woollard: Oh, yeah.

Frankel: We don't know that. It's probably the highest-risk, highest-reward mall operator that I know about. But if you would just have me name a No. 2, it would probably be Tanger, I can talk more about Tanger if you want.

Woollard: Yeah, sure.

Frankel: Tanger is probably my favorite retail play right now. I mentioned their stock has tripled in a year, and rightfully so, they have done an absolutely fantastic job of not only adapting to the pandemic, but trying to right the ship. Tanger's biggest problem over the past year is that some of their biggest tenants have gone bankrupt. Ascena Brands, which is the parent company of Loft. Then you have all the ones that Simon bought, like J. Crew and Brooks Brothers, those were big Tanger tenants. Their occupancy rate went from 97% to less than 92% in the course of a year. To make it worse, a lot of the spots being vacant were big stores, so they were left with a lot of big spots to fill. They made a couple of really brilliant moves. One, they started targeting companies that don't normally have outlets, that just need a lot of square footage. They recently opened the first Dick's Sporting Goods outlet at one of their properties. If you've been into Dick's Sporting Goods, it's a big store, so their outlet is going to be a big store. They did that, and they just recently added WeWork's CEO to their board, which I think is a really interesting move, to really look at some outside the box ways to fill space in their centers. You mentioned that a lot of the malls are bringing experiences into their portfolio. The outlet industry really hasn't done that too much yet.

Woollard: True.

Frankel: We're just bringing built-in sources of traffic, like hotels, and in this case co-working. I could see that being a win-win for WeWork and Tanger. I'm not about to buy stock in WeWork but I definitely think that they could be a big help to Tanger's vacancy problem. They raised capital at this new elevated share price, a lot of companies we cover were selling shares at fire sale prices last year. They waited, they did a great job, they reduced some debt, they raised over $136 million at elevated share prices about what it's trading at now actually. They have a ton of liquidity, they're about to get back into growth mode. Outlet shopping is less than 1% of all retail space. This is a very young and small industry. A lot of people don't realize that. If you live in one of the coastal towns with a lot of outlets, you might not realize that. If you live in Myrtle Beach, for example, you think that outlets are the only type of retail. If you live in a normal city, you know that they're not everywhere. There is a lot of underserved markets. Nashville doesn't really have the big outlet presence. That's Tanger's next expansion market, they're currently looking into. They've done such a great job, only 36 locations so far. Especially if you live near one, you think it's a big company. It's really not that huge yet. Deidre mentioned that overall, retail is collecting a little over 90% of rent right now, which is great compared to what it was. Tanger is at 95%. Their tending quality is great, it's a great value proposition for retailers, outlet space. It's lower start-up costs, lower rent, higher profit margins. It's a win-win. It gives them another point of contact for consumers, so it adds to the omni-channel model, too. I think Tanger has got a very bright future ahead. It's not quite the no-brainer it was when it was $5 a share last year, but it's still a great value, I think.