TORONTO and GREENSBORO, N.C., Oct. 30, 2012 /PRNewswire/ -- RioCan Real Estate Investment Trust ("RioCan") (TSX: REI.UN) and Tanger Factory Outlet Centers, Inc. ("Tanger") (NYSE: SKT), through their co-ownership agreement, announced today they have waived conditions to acquire two outlet centres in the Montreal area, Les Factoreries St. Sauveur and Bromont Outlet Mall. The co-owners will purchase the properties on a 50/50 basis at an expected aggregate purchase price of $94.7 million (Canadian dollar, at 100%). RioCan will provide development and property management services and Tanger will provide leasing and marketing services. The co-owners intend to add value to the properties by implementing their operational and marketing programs and rebranding the properties under the Tanger Outlets flag.
The purchase price includes the assumption of the aggregate in place financing at Les Factoreries St. Sauveur of $18.8 million (Canadian dollar, at 100%) which carries a weighted average interest rate of 5.7% and matures in 2015 and 2020. Bromont Outlet Mall is being acquired free and clear of financing. Both transactions are scheduled to close in November 2012. The acquisition of these centres will enable the co-owners to expand beyond the Greater Toronto Area and implement their outlet centre strategy immediately, as Tanger Outlet Centers enter into another Canadian market.
Les Factoreries St. Sauveur, is located approximately 60 kms northwest of Montreal, QC adjacent to Highway 15 in the town of St. Sauveur, QC. The property was built in 1980, and expanded in 2006, and is approximately 116,000 square feet with the potential to expand to approximately 131,000 square feet on the adjacent 1.1 acres of land which will also be acquired. This well established outlet centre features many national brands such as, Nike, Tommy Hilfiger, Reebok, Guess, Jones New York, Naturalizer and Parasuco. The Saint Sauveur Valley is a first class resort destination ideal for outlet shopping that combines outdoor activities with shopping, performing arts and entertainment. The mountains provide the backdrop for great skiing and winter activities and the nearby lakes offer endless summer hiking, biking, boating and more.
Bromont Outlet Mall, is located approximately 85 kms east of Montreal, QC near the eastern townships adjacent to Highway 10 in the town of Bromont, QC. The property was built in 2004 and expanded through 2011, and is approximately 162,000 square feet with the potential to expand to approximately 251,000 square feet. This outlet centre features many national brands such as, Point Zero, Tommy Hilfiger, Guess, Puma, Mexx, and Urban Planet. Bromont is located at the base of Mont Brome. The area is a well known tourist destination for downhill skiing, mountain biking and equestrian events.
"We are very pleased to expand our co-ownership with Tanger and bring our collective expertise into a second market with two well established, well located properties that will bring the Outlet Center experience to the Montreal area," said Edward Sonshine, Chief Executive Officer of RioCan. "These sites in Montreal represent an exciting opportunity to bring Tanger Outlet Centers into a second Canadian retail market. We are also seeking to add a new centre in the Ottawa market which will provide our tenants with the opportunity to be in multiple locations across Canada."
"This opportunity allows RioCan and Tanger to build on the success of Tanger Outlets Cookstown by expanding our footprint into another thriving market," said Steven B. Tanger, President and Chief Executive Officer of Tanger. "Acquiring and rebranding these two proven outlet assets as Tanger Outlet Centers will enhance the co-owners' Canadian platform for our retail partners."
Tanger will release earnings for the third quarter of 2012 this afternoon after the market close, and will host its third quarter conference call tomorrow morning at 10:00 eastern time. RioCan's third quarter earnings release and conference call are scheduled for Tuesday, November 6, 2012.
RioCan is Canada's largest real estate investment trust with a total capitalization of approximately $13.6 billion as at June 30, 2012. It owns and manages Canada's largest portfolio of shopping centres with ownership interests in a portfolio of 336 retail properties containing an aggregate of 79.4 million square feet, including 48 grocery anchored and new format retail centres containing 12.3 million square feet in the United States through various joint venture arrangements as at June 30, 2012. RioCan's portfolio also includes 10 properties under development in Canada. For further information, please refer to RioCan's website at www.riocan.com.
About Tanger Factory Outlet Centers, Inc.
Tanger Factory Outlet Centers, Inc. (NYSE: SKT) is a publicly-traded REIT headquartered in Greensboro, North Carolina that operates and owns, or has an ownership interest in, a portfolio of 40 upscale outlet shopping centers in 25 states coast to coast and in Canada, totaling approximately 12.3 million square feet leased to over 2,600 stores operated by more than 430 different brand name companies. More than 175 million shoppers visit Tanger Factory Outlet Centers annually. For more information on Tanger Outlet Centers, call 1-800-4TANGER or visit the company's web site at www.tangeroutlet.com.
This News Release contains forward-looking statements within the meaning of applicable securities laws. These statements include, but are not limited to, statements regarding RioCan's and Tanger's intention to acquire two outlet centres in the Montreal area, the seeking to add new centres in the Ottawa and Calgary markets, and other statements concerning each company's objectives, its strategies to achieve those objectives, as well as statements with respect to management's beliefs, plans, estimates, and intentions, and similar statements concerning anticipated future events, results, circumstances, performance or expectations that are not historical facts. Forward-looking statements generally can be identified by the use of forward-looking terminology such as "outlook", "objective", "may", "expect", "intend", "estimate", "anticipate", "believe", "should", "plan", "continue", or similar expressions suggesting future outcomes or events. Such forward-looking statements reflect management's current beliefs and are based on information currently available to management. All forward-looking statements in this News Release are qualified by these cautionary statements.
These forward-looking statements are not guarantees of future events or performance and, by their nature, are based on each company's current estimates and assumptions, which are subject to risks and uncertainties. For a list of risks and uncertainties affecting the operations of RioCan, please refer to the caption "Risks and Uncertainties" in RioCan's latest financial statements and management's discussion and analysis for the quarter ending June 30, 2012. Those risks and uncertainties, which could cause actual events or results to differ materially from the forward-looking statements contained in this News Release, include, but are not limited to, those related to: the ability of the parties to complete the transactions contemplated herein as currently intended, the ability of RioCan to liquidate its currently held shares of Cedar as currently intended, liquidity in the global marketplace associated with current economic conditions, tenant concentrations, occupancy levels, access to debt and equity capital, interest rates, joint ventures/partnerships, the relative illiquidity of real property, unexpected costs or liabilities related to acquisitions, construction, environmental matters, legal matters, reliance on key personnel, unitholder liability, income taxes, the investment in the United States of America ("US"), US currency exchange fluctuations and RioCan's qualification as a real estate investment trust for tax purposes. Material factors or assumptions that were applied in drawing a conclusion or making an estimate set out in the forward-looking information may include, but are not limited to: a more robust retail environment compared to recent years; relatively stable interest costs; a continuing trend toward land use intensification in high growth markets; access to equity and debt capital markets to fund, at acceptable costs, the future growth program to enable the Trust to refinance debts as they mature; the availability of purchase opportunities for growth in Canada and the US; and the impact of accounting principles adopted by the Trust effective January 1, 2011 under International Financial Reporting Standards ("IFRS") which includes application to the Trust's 2010 comparative financial results. Although the forward-looking information contained in this News Release is based upon what management believes are reasonable assumptions, there can be no assurance that actual results will be consistent with these forward-looking statements. Certain statements included in this News Release may be considered "financial outlook" for purposes of applicable securities laws, and such financial outlook may not be appropriate for purposes other than this News Release.
The Income Tax Act (Canada) (the "Act") contains legislation affecting the tax treatment of publicly traded trusts (the "SIFT Legislation"). The SIFT Legislation will not impose tax on a trust which qualifies under such legislation as a real estate investment trust (the "REIT Exception"). RioCan currently qualifies for the REIT Exception and intends to continue to qualify for future years. Should this not occur, certain statements contained in this News Release may need to be modified.
Except as required by applicable law, RioCan under takes no obligation to publicly update or revise any forward-looking statement, whether as a result of new information, future events or otherwise.
For a more detailed discussion of the factors that affect Tanger's operating results, interested parties should review the Tanger Factory Outlet Centers, Inc. Annual Report on Form 10-K for the fiscal year ended December 31, 2011. Such factors include, but are not limited to, the risks associated with general economic and local real estate conditions, Tanger's ability to meet its obligations on existing indebtedness or refinance existing indebtedness on favorable terms, the availability and cost of capital, Tanger's ability to lease its properties or to meet its minimum pre-leasing hurdles on proposed new developments, Tanger's inability to collect rent due to the bankruptcy or insolvency of tenants or otherwise, and competition.
For further information, contact: RioCan Real Estate Investment Trust Rags Davloor Senior Vice President & CFO (416) 642-3554
Tanger Factory Outlet Centers, Inc. Frank Marchisello Executive Vice President and CFO (336) 834-6834
SOURCE Tanger Factory Outlet Centers, Inc.