COVID-19 Pandemic

12 Months Ended

Dec. 31, 2020

The current novel COVID-19 pandemic has had, and will continue to have, repercussions across local, national and global economies and financial markets. COVID-19 has impacted all states where our tenants operate their businesses or where our properties are located and measures taken to prevent or remediate COVID-19, including “shelter-in place” or “stay-at-home” orders or other quarantine mandates issued by local, state or federal authorities, have had an adverse effect on our business and the businesses of our tenants. The full extent of the adverse impact on, among other things, our results of operations, liquidity (including our ability to access capital markets), the possibility of future impairments of long-lived assets or our investments in unconsolidated joint ventures, our compliance with debt covenants, our ability to collect rent under our existing leases, our ability to renew and re-lease our leased space, the outlook for the retail environment, bankruptcies and potential further bankruptcies or other store closings and our ability to develop, acquire, dispose or lease properties for our portfolio, is unknown and will depend on future developments, which are highly uncertain and cannot be predicted. Our results of operations, liquidity and cash flows have been and may continue to be in the future materially affected.

Although our outlet centers remained open, retailers began closing their stores in our outlet centers in mid-March and by April 6, 2020, substantially all of the stores in our portfolio were closed as a result of mandates by order of local and state authorities. By June 15, 2020, in store shopping for non-essential retail was allowed in every market in which our centers are located. Our outlet centers may experience additional short-term store closures as retailers implement additional safety protocols at specific locations impacted by increased exposure to COVID-19.

While our outlet centers have not closed throughout the pandemic, we have been operating under reduced hours since late April when the first stores began to reopen. Prior to the pandemic, our centers operated an average of 12 hours per day. Currently, our open-air centers are open an average of 10 hours per day, which was expanded from an average of 8 hours per day in early November.

A number of our tenants have requested rent deferrals, rent abatements or other types of rent relief during this pandemic. As a response, in late March 2020, we offered all tenants in our consolidated portfolio the option to defer 100% of April and May rents interest free, payable in equal installments due in January and February of 2021.

The following table sets forth information regarding the status of rents billed during the fourth, third and second quarters as of December 31, 2020 (In thousands,unaudited):


	As of December 31, 2020
	Fourth Quarter				Third Quarter				Second Quarter
Collection Status: (1)	Rents Billed		% of Rents		Rents Billed		% of Rents		Rents Billed		% of Rents
Rents collected	$	83,136	95	%	$	86,495	91	%	$	56,024	57	%
Rents expected to be collected(2)	423		—		300		—		5,519		6
Rents deferred (3)	507		1		473		1		9,361		9
Under negotiation	702		1		755		1		1,760		2
One-time rent concessions in exchange for amendments to lease structure	1,205		1		2,829		3		13,687		14
Bankruptcy related, primarily pre-petition rents	821		1		3,015		3		9,290		10
At risk due to tenant financial weakness	1,116		1		934		1		1,867		2
Total rents billed	$	87,910	100	%	$	94,801	100	%	$	97,508	100	%

(1)Excludes variable revenue which is derived from tenant sales and lease termination fees.

(2)In January 2021, we collected an additional $145,000 of the fourth quarter rents, $187,000 of third quarter rents and $5.1 million of second quarter rents.

(3)Includes rents deferred with substantially all payments due in 2021, for which the majority is due in January/February of 2021.

As a direct result of the pandemic, bankruptcies and restructurings, the Company's earnings were negatively impacted by approximately $47.3 million due to (1) write-offs related to bankruptcies and other uncollectible accounts due to financial weakness, (2) one-time concessions in exchange for landlord-favorable amendments to lease structure, (3) reserves for a portion of deferred and under negotiation billings that we expect to become uncollectible in future periods, (4) and write-offs of straight-line rents associated with the bankruptcies and uncollectible accounts.

Included in the negative impact discussed above, for the year ended December 31, 2020, we recorded a $5.3 million reserve for a portion of deferred and under negotiation billings that are expected to become uncollectible in future periods and recognized a write-off of revenue of approximately $7.2 million of straight-line rents associated with the tenant bankruptcies and uncollectible accounts. We are closely monitoring changes in the collectability assessment of our tenant receivables as a result of certain tenants suffering adverse financial consequences due to COVID-19 and should our estimates change, there could be material modifications to our revenues in future periods.

Given the economic environment as a result of COVID-19, a select number of our tenants underwent liquidity hardships and filed for Chapter 11 bankruptcy protection in the second, third and fourth quarters of 2020. Although some of these tenants intend to exit the Chapter 11 bankruptcy process and resume operations, the outcomes of such proceedings are unknown and we are currently exploring leasing alternatives for stores we expect to close. Recent Chapter 11 bankruptcy filings include, but not limited to, J. Crew Group, Inc. (filed in May 2020) and Brooks Brothers, Lucky Brand Jeans, New York and Company and Ascena Retail Group, Inc. (all filed in July 2020), Francesca's (filed in December 2020) and Christopher and Banks (filed in January 2021). Also in 2020, G-III Apparel announced a brand-wide restructuring, including its intention to close all of its Wilsons and Bass stores. Approximately 93% of the amounts included in the table above under the caption (“Bankruptcy related, primarily pre-petition rents”) that were written off during the second, third and fourth quarters as uncollectible rents as of December 31, 2020 were related to these tenants.

In March 2020, to increase liquidity, preserve financial flexibility and help meet our obligations for a sustained period of time, we drew down substantially all of the available capacity under our $600.0 million unsecured lines of credit. Beginning in June 2020 through August 2020, we repaid the entire $599.8 million outstanding balance bringing the outstanding balance to zero as of December 31, 2020.

We also took steps to reduce cash outflows, including the reduction or deferral of certain operating costs, temporary base salary reductions for our named executive officers and other employees, and the reduction of certain other general and administrative expenses.

We also deferred our Nashville pre-development-stage project and certain other planned capital expenditures. We paid the dividend that was declared in January 2020 as scheduled on May 15, 2020. Given the uncertainty related to the pandemic’s near and potential long-term impact, in May 2020 the Company’s Board of Directors temporarily suspended dividend distributions to conserve approximately $35.0 million in cash per quarter and preserve our balance sheet strength and flexibility. The dividend was reinstated in January 2021 and the Board declared a dividend of $0.1775 per share paid in February 2021. The Board continues to evaluate the potential for future dividend distributions on a quarterly basis. We were in compliance with REIT taxable income distribution requirements for the 2020 tax year.