Tanger takes control of Deer Park outlet center

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Syosset-based Blumenfeld Development Group has sold half of its 66 percent stake in the Tanger Outlets in Deer Park to Tanger Factory Outlet Centers for $27.4 million in cash and stock, according to a company statement.

The Greensboro, N.C.-based Tanger now owns a controlling two-thirds interest in the 850,000-square-foot Deer Park center that BDG built in 2008. Tanger remains as property manager and will control the management, leasing, marketing and other operations of the property. BDG signed a put/call agreement that allows Tanger to acquire the entire center in the future.

Before the acquisition, Tanger and BDG refinanced the center’s debt with a $150 million, five-year mortgage. Tanger repaid the existing mortgage and mezzanine loans on the Deer Park property by borrowing $89.5 million under its unsecured lines of credit.

To increase its ownership stake, Tanger paid BDG $13.4 million in cash and 450,576 Class A common limited partnership units of Tanger Properties Limited Partnership. The deal was based on a capitalization rate of 5.6 percent.

Tanger and BDG have entered into a triple-net lease to a different wholly-owned subsidiary of Tanger that will operate the property as lessee. The property owners will receive, in proportion to their respective ownership interests, fixed annual lease payments of about $2.5 million, plus an amount necessary to pay the interest expense on debt related to the property.

“We are pleased to increase our ownership in the Deer Park property,” Steven Tanger, president and CEO said in the statement. “This well-occupied property is currently a traffic leader in our portfolio and generates sales per square foot well above our consolidated portfolio average.”

BDG can use the proceeds from the Deer Park sale towards its upcoming project: A partnership with Forest City Ratner to rebuild the Nassau Coliseum in Uniondale.

That $229 million plan calls for a modern, 13,000-seat arena, an outdoor amphitheater that converts to an ice skating rink in the winter and contains various restaurants, as well as a 2,000-seat indoor theater. A 25,000-square-foot bowling alley will sit just to the southeast of the Coliseum.

Tanger Outlets in Deer Park has 96 outlet stores, 10 restaurants and a 16-screen movie theater. Tanger owns and operates 43 outlet shopping centers in 26 states and Canada, totaling some 12.9 million square feet leased to more than 2,700 stores.