Adjusted Funds From Operations Increase 10.2%

GREENSBORO, N.C., July 29 /PRNewswire-FirstCall/ -- Tanger Factory Outlet Centers, Inc. (NYSE: SKT) today reported funds from operations available to common shareholders ('FFO'), a widely accepted measure of REIT performance, for the three months ended June 30, 2008 of $15.1 million, or $0.40 per share, as compared to FFO of $22.1 million, or $0.59 per share, for the three months ended June 30, 2007. For the six months ended June 30, 2008, FFO was $37.9 million, or $1.01 per share, as compared to FFO of $43.5 million, or $1.16 per share, for the six months ended June 30, 2007.

FFO for the three and six months ended June 30, 2008 was impacted by a previously announced $8.9 million charge relating to the settlement of $200 million in 10 year US Treasury locks, as well as a $406,000 prepayment premium associated with the early extinguishment of debt. Excluding these two non- recurring charges, FFO for the second quarter and six months ended June 30, 2008 would have been $0.65 and $1.26 per share respectively, representing an increase of 10.2% for the three months ended June 30, 2008 and an increase of 8.6% for the six months ended June 30, 2008.

Net income available to common shareholders for the six months ended June 30, 2008 was $5.4 million or $0.17 per share, as compared to net income available to common shareholders of $6.9 million, or $0.22 per share, for the six months ended June 30, 2007. For the three months ended June 30, 2008, the company reported a net loss available to common shareholders of $119,000, or zero earnings per share, compared to net income of $5.0 million, or $0.16 per share, for the second quarter of 2007. Net income available to common shareholders for the three months and six months ended June 30, 2008 was also impacted by the non-recurring charges described above.

Net income and FFO per share amounts above are on a diluted basis. FFO is a supplemental non-GAAP financial measure used as a standard in the real estate industry to measure and compare the operating performance of real estate companies. A complete reconciliation containing adjustments from GAAP net income to FFO is included in this press release.

Second Quarter Highlights

-- Closed on a $235.0 million unsecured three year term loan with a rate of 160 basis points over LIBOR

-- Repaid last remaining mortgage loan with a principal balance of $170.7 million

-- 19.8% average increase in base rental rates on 184,000 square feet of signed renewals during the second quarter of 2008, 18.3% increase year to date compared to 13.6% year to date in 2007

-- 46.1% average increase in base rental rates on 124,000 square feet of re-leased space during the second quarter of 2008, 43.1% increase year to date compared to 40.1% year to date in 2007

-- 96.2% occupancy rate for wholly-owned properties, up 1.0% from March 31, 2008

-- $340 per square foot in reported same-space tenant sales for the rolling twelve months ended June 30, 2008

-- 3.9% increase in same center net operating income, 4.8% increase year to date

-- 34.8% debt-to-total market capitalization ratio, compared to 31.7% last year

-- 3.56 times interest coverage ratio for the three months ended June 30, 2008 compared to 3.24 times last year

Stanley K. Tanger, Chairman of the Board and Chief Executive Officer, commented, 'Our results for the second quarter of 2008 were outstanding. Our adjusted funds from operations per share increased 10.2%, while same center net operating income increased almost 4% during the second quarter.'

Portfolio Operating Results

During the second quarter of 2008, Tanger executed 79 leases, totaling 308,000 square feet within its wholly-owned properties. Lease renewals during the second quarter of 2008 accounted for 184,000 square feet and generated a 19.8% increase in average base rental rates on a straight-line basis. Base rental increases on re-tenanted space during the second quarter averaged 46.1% on a straight-line basis and accounted for the remaining 124,000 square feet. For the first six months of 2008, 984,000 square feet of renewals generated an 18.3% increase in average straight-line base rental rates, and represented approximately 73% of the square feet originally scheduled to expire during 2008. Re-tenanted space during the first six months totaled 403,000 square feet and generated a 43.1% increase in average base rental rates on a straight-line basis.

Same center net operating income increased 3.9% for the second quarter of 2008 compared to an increase of 2.3% during the second quarter of 2007 and increased 4.8% for the first six months of 2008 compared to 2.7% for the first six months of 2007. Reported tenant comparable sales per square foot for the rolling twelve months ended June 30, 2008 were $340 per square foot, up less than one percent compared to the twelve months ended June 30, 2007. Sales for the three months ended June 30, 2008 were down 3.8% and were impacted by the shift in the Easter holiday season to the first quarter, the general weakness in the U.S. economy, as well as severe weather and flooding in the Midwestern United States during the second quarter of the year.

Investment and Other Activities

Tanger continues the development, construction and leasing of two previously announced sites located in Washington County, south of Pittsburgh, Pennsylvania and in Deer Park (Long Island), New York. The first phase of the Washington County center will total 370,000 square feet, with leases for approximately 81% of the first phase signed and an additional 5% under negotiation or out for signature. The grand opening of this center is scheduled to occur on August 29, 2008. The Washington County center is wholly owned by Tanger.

The company currently expects the Deer Park center will contain over 800,000 square feet upon final build-out. Site work and construction continues on an initial phase of approximately 682,000 square feet. The company has approximately 69% of the space in the initial phase signed and an additional 9% under negotiation or out for signature. A grand opening celebration is currently scheduled for October 23, 2008. The Deer Park property is owned through a joint venture of which Tanger and two venture partners each own a one-third interest.

Tanger has entered into purchase options on new development sites located in Mebane, North Carolina; Port St. Lucie, Florida; Irving, Texas and most recently in Phoenix, Arizona. Tenant interest in these new locations remains high and Tanger is continuing with its predevelopment work at all four locations.

Financing Activities and Balance Sheet Summary

On June 11, 2008, Tanger closed on a $235.0 million unsecured three year term loan facility. The facility bears interest at a spread over LIBOR of 160 basis points, with the spread adjusting over time, based upon the debt ratings of the company. Tanger currently maintains investment grade ratings with Moody's Investors Service (Baa3 stable) and Standard and Poor's Ratings Services (BBB- positive).

In conjunction with the closing of the unsecured term loan facility discussed above, we settled interest rate lock protection agreements which were intended to fix the US Treasury index at an average rate of 4.62% for an aggregate amount of $200 million of new debt for 10 years from July 2008. We originally entered into these agreements in 2005 in anticipation of a public debt offering during 2008, based on the 10 year US Treasury rate. Upon the closing of the LIBOR based unsecured term loan facility, we determined the likelihood of such a US Treasury based debt offering to be not probable.