Steven Tanger joined Tanger Factory Outlet Centers (NYSE:SKT), founded by his father in 1981, as the company's fourth employee. The company had grown to 13 outlet centers by 1992, and the following year became the first outlet center developer to be listed on the New York Stock Exchange as a publicly traded REIT, under ticker symbol SKT. Tanger has been president and CEO since 2009, and the company's portfolio, growing steadily, now includes more than 40 outlet centers across the U.S. and in Canada.

Shopping malls are changing, not dying, Tanger says. In this video segment he points out that malls have been around for nearly 60 years, and have had to evolve continually during that time. That doesn't mean the company never closes a shopping center; Tanger explains that the company views its portfolio of properties in much the same way an investor treats a stock portfolio.

Tom Gardner: In those outlets, all the stores are staffed by the individual brands. I look at your company -- as I said, a $3 billion market capitalization -- with less than 300 full-time employees.

Steve Tanger: That's right. We are very happy and proud of our tenant partners. We are an American business that created jobs for Americans. We're very proud of that. Every day, about 45,000 people work in Tanger centers across the country and in Canada, so we've created a lot of jobs.

The site we're opening tomorrow in National Harbor will employ about 900 people; full- and part-time jobs, created without government subsidies.

Gardner: People's association with shopping malls today is, "The occupancy rates have got to be dwindling. Who's heading out to these places, when they can just point and click and buy?"

But the occupancy rates at Tanger malls are pretty remarkable. I know there's a waiting list as well, to get into the mall. Why is that? What stands out as unique? Maybe you've just already explained it, but do you agree that shopping malls are becoming less relevant, but it's not actually affecting your business?

Tanger: I don't agree that shopping malls are becoming less relevant. I think they're changing. Some of the stores are more lifestyle-type stores; spinning, local makeup type stores for the local community, that will vest in the mall and have it as a sense of place.

They're very smart people that run the big mall companies, and we've been through many cycles since the first mall was opened in the '50s -- almost 60 years ago -- so it constantly evolves, and will continue to evolve.

Macy's, run by Terry Lundgren, is a fantastically operated department store chain, and they reported third-quarter profits are up, and their sales are up, and I think they're optimistic about the fourth quarter, as we are.

The outlets are a different channel of distribution. We are a distinct distribution channel, just like the department stores are a distinct distribution channel. As I like to say, "In good times, people like a bargain, and in tough times like these, they need a bargain," so our business model has sustained for all these 33 years.

We have the distinction of being the only national real estate company, in any property sector -- any -- that, for 33 consecutive years, has never ended the year less than 95% occupied; and that's over many cycles, stock market crashes, terrorist events, all kinds of macro events that might disturb that. But our tenants find outlet stores, and their outlet division, extremely profitable.

Gardner: What sort of tenants? Some of the big brands -- obviously, NikeMichael Kors -- what are some of the names that people... most people have been to a Tanger mall, so I'd just like to hear a couple of the anchor tenant, long-standing partners that are there.

Tanger: We really don't have any anchors. Anchors are heavyweights that drag you down and keep you stationary. We have magnet tenants; people that are so popular that our customers will drive anywhere from 25 to 50 miles to go shop.

They're the finest brand-name and designer names in the world today: Polo Ralph Lauren, Nike, Under Armour -- pick any name you want -- Michael Kors, CoachKate SpadePhillips-Van Heusen, the Gap, Old Navy, Banana Republic, J.Crew. I don't want to get in trouble, because I'm leaving out a lot...

Gardner: Can you name your favorite employees, too, at the company?

Tanger: Every one is my favorite employee!

Gardner: Every tenant, and every employee.

Tanger: And every one of our shopping centers is my favorite. I love all my children!

Gardner: Have you closed any, over time? Do you sell them off, acquire other ones -- either locations, or the actual mall?

Tanger: Sure. As in any portfolio -- and I'm sure you, in your investment advice, tell your subscribers to diversify, and to constantly review your portfolio to see which positions are no longer core positions and to dispose of those non-core positions and invest in more growth companies. Well, we do the same in our portfolio.

From 2000 to 2010, we sold 11 shopping centers, basically to entrepreneurs in the local community. These were non-core assets, and we reinvested the funds at a higher rate of return in some of our newer properties. So, from time to time we do sell assets; not often, but we do. That's just part of the process.

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