According to the Atlanta-Journal Constitution, Simon Property Group (SPG -1.67%) plans to build a mixed-use project in the high-end Atlanta suburb of Buckhead. The multi-purpose development will consist of retail, residential (320 units) and hotel (164 rooms) components planned near Phipps Plaza mall, another Simon-owned property.

The new project is to follow a major renovation of Phipps Plaza which is across from Lenox Square mall and the Ritz-Carlton Buckhead. The work at Phipps, which will begin this summer and be completed by the holiday season, will be the 45-year-old mall's first major renovation since 1992.The three-level Phipps mall, which has more than 100 stores, will remain open during the renovation as Simon expects to add more retailers this year.

I've personally been to Phipps Plaza mall many times and I consider this property to be one the finest malls in the southeast. Simon acquired the mall in 1998 (was built in 1968) and the tenant mix includes AMC, Belk, and other high well-known branded shopping.

Simon, with a total market cap of $85.4 billion, is the largest retail REIT in the U.S. with over 597 properties. The Indianapolis-based REIT owns hundreds of Class A malls like Phipps Plaza and the quality of assets are reflected in the quality of earnings. Simon has built an impressive record of paying and increasing dividends and as evidenced below, the market has responded. Simon shares are trading at $169.86 (the black line) with a Price to Funds from Operations (P/FFO) multiple of 17.7x.

Although I like shopping at Phipps, I also like bargains. Besides, there's not much I can do with a 2.94% dividend. I'm going to wait on a more attractive entry point for Simon. I like shopping like I'm an "intelligent investor" and my buy-target is $125.

Bottom Fishing at CBL
CBL & Associates Properties (CBLQ) owns a mall close to my home. It's not my favorite mall (like Phipps) but it's convenient. The problem with this CBL mall though is it's a dud.

Like many other CBL-owned properties (owns 136), this mall has weak anchors like J.C. Penney and Sears, and the shops are moderately occupied (71% leased). As I walked through the un-exciting space this week, I spotted several vacant stores and many of the local shops are month-to-month payers.

CBL is trying to do something about its business model. Earlier this week, CBL & Associates Properties laid out a 2-3 year plan to recycle its portfolio from lower tier (Class C) and non-core assets into higher performing malls (Class A & B). CBL's plan is subject to significant execution risk given the limited demand for malls with sales under $300 per square foot (i.e. there aren't buyers who want to owns duds).

At the very least, CBL & Associates Properties' proposed portfolio transformation (if successful) will take several years and result in considerable Funds from Operation (or FFO) dilution.

Withstanding the "long road to recovery risk," CBL is also going against the herd by attempting to operate in the riskiest retail sector where there's heated competition from the Internet and big box retailers. Owning B & C malls is becoming increasingly risky and the lower productivity malls (like the one in my town) are highly speculative.

CBL & Associates Properties said it plans to sell $1.0-$1.25 billion (15% of NOI) of "C" quality assets over the next 24-36 months and reinvest proceeds in redevelopment, debt reduction, and acquisitions. Estimated annual FFO dilution is $0.18-.23 per share, based on the reinvestment of proceeds at 6.0-8% yields.

I'm glad I sold my CBL & Associates Properties shares last year. You've heard the saying, "you get what you pay for". With CBL, trading at $17.90, you get a cheap REIT with a bargain P/FFO multiple of 8 times. However, you also get a questionable earnings model with a likely dilution to future FFO. CBL does have a higher dividend yield of 5.53% but given the uncertain execution risk, I would avoid this REIT.

Tanger – An Everlasting Model of Repeatability
As I said, I like bargains; it's just part of my DNA.

That's also the value proposition for Tanger Factory Outlet Centers (SKT -0.37%). In the new age of retailing, it's becoming quite clear that the most sustainable companies have to be experts in all business lines -- that is, full price, discount, and e-commerce. By linking together all channels, the strongest players will benefit and provide the most lasting differentiation.

Tanger Factory Outlet Centers is that link.

Over the last 33 years, Tanger's portfolio has continued to expand, and today includes 44 outlet centers in 26 states coast-to-coast and in Canada. The Greensboro-based REIT has a robust pipeline of growth planned for delivery in the next 2 years, including new centers at Foxwood Resort & Casino in CT, in Charlotte, NC, Grand Rapids, MI, Columbus, OH, Ottawa, Canada, and Cookstown (Canada), with expansion planned in Glendale, AZ, Branson, MO, Park City, UT, and Sevierville, TN.

In 2013, Tanger's FFO increased 19% to $1.94 per share. As a result of the company's highly consistent earnings model, Tanger achieved "Dividend Aristocrat" status (last year) -- an extraordinary accomplishment of paying and increasing dividends for over 20 years in a row. Tanger is the only mall-REIT that paid an increased dividend throughout the Great Recession.

Share of Tanger Factory Outlet Centers are trading at $36.11 with a dividend yield of 2.70%. That's not a bargain; however, when you compare Tanger's track record as a "blue chip" REIT, there's an added measure of safety that one should factor into the investment decision.

I'm adding Tanger to my shopping basket with a "sleep well at night" buy price of $32.00. I really like the outlet model, and I consider Tanger to be one of the true gems in the mall sector. I believe that the primary value in owning Tanger is the fact that the company has distinguished itself for its ability to control risk, while also generating strong returns.