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Operator
Good morning and welcome to Tanger Factory Outlet Centers first quarter 2011 conference call. Please note that during this conference call some of management's comments will be forward-looking statements regarding the Company's property, operations, leasing, tenant sales trends, development, acquisitions, expansion and disposition activities, as well as their comments regarding the Company's funds from operations, funds available for distribution and dividends. These forward-looking statements are subject to numerous risks and uncertainties, and actual results could differ materially from those projected due to factors including but not limited to changes in economic and real estate conditions, the availability and cost of capital, the Company's ongoing able to lease, develop and acquire properties, as well as potential tenant's bankruptcies and competition. We direct you to the Company's filings with the Securities and Exchange Commission for a detailed discussion of the risks and uncertainties.
This call is being recorded for rebroadcast for a period of time in the future. As such, it is important to note that management's comments include time sensitive information that may be accurate only as of today's date, April 27, 2011. At this time, all participants are in listen-only mode. Following management's prepared comments, the call will be opened up for your questions. On the call today will be Steven Tanger, President and Chief Executive Officer, and Frank Marchisello Executive Vice President and Chief Financial Officer. I will now turn the all over to Steven Tanger. Please go ahead, Steve.
Steven Tanger - President, CEO
Thank you Mona, and good morning everyone. Our ability to successfully increase rental rates and occupancy resulted in strong same center net operating income growth of 6% in the first quarter of 2011. Continued positive comparable tenant sales allowed us to achieve a blended increase in rents of 25.3% in the first quarter. Our tenant comparable sales for the rolling 12 months ended March 31, 2011, increased 5.9% to $359 per square foot, while sales for the first quarter increased 4.8% compared to the first quarter of 2010.
We were pleased to announce on April 7th that our Board of Directors approved an increase in our annual cash dividend rate from $0.775 to $0.80 per share. We're very proud of the fact that we have raised our cash dividend in each of the 18 years since becoming a public Company in 1993. I will now turn the call over to Frank who will take you through our financial results for the quarter, then I will follow with a summary of our operating performance and our current expectations for the balance of 2011.
Frank Marchisello - EVP, CFO
Thank you, Steve, and good morning everyone. Total adjusted funds from operations or FFO for the quarter ended March 31, 2011, increased 2.4% to $30.3 million compared to $29.6 million last year. Adjusted FFO of $0.33 per share surpassed last year, was at the high end of our internal forecast and met the street consensus expectations.
On a consolidated basis our total market capitalization at March 31 was approximately $3.2 billion and our debt to total market capitalization was approximately 22.7%. We also maintained a strong interest coverage ratio of 3.91 times for the quarter. As of March 31, 2011, approximately 76.9% of our debt was at fixed rates with our only floating rate exposure being the $166.3 million outstanding on our $400 million in unsecured lines of credit.
Our balance sheet strategy has always been conservative with a manageable debt maturity schedule. At the end of the first quarter, our wholly owned portfolio properties was 100% unencumbered, We have no significant debt maturities on our balance sheet before November of 2013. Our FFO payout ratio for the first quarter was approximately 61% and our FAD payout ratio was 67%. At these levels, our dividend is well covered and we will generate incremental cash flow over our dividend which we plan on using to help fund our future growth. I'll now turn the call back over to Steve. Go ahead, Steve.
Steven Tanger - President, CEO
Thanks, Frank. I'm pleased to report that the positive leasing momentum for 2011 that we shared with you on our last call has continued. So far this year, we are producing significant increased rent spreads on the renewal and releasing of space throughout our entire portfolio. As of the end of March, we executed 276 leases totaling 1,268,000 square feet with a blended average increase in base rental rates of 25.3%. This compares favorably to the blended average rental spreads of 13.2% in the first quarter of 2010.
We have executed renewals and renewals in process for 1,067,000 square feet or about 62.6% of the space coming up for renewal during 2011 with an increase in average base rental rates on the executed renewals of 16%, up from the 8.8% increase of average base rental rates on lease renewals executed during the first quarter of 2010. In addition, during the first quarter we retenanted approximately 336,000 square feet, with an increase in average base rental rates of 49.9%, compared to an average retenanting spread for the first quarter of 2010 of 26.5%. Our average cost of occupancy for 2010 was 8.3% of average tenant sales, which should provide us the opportunity to continue to raise rental rates on the balance of the space expiring this year.
Same center NOI growth during the quarter was 6%, compared to 3.7% last quarter and .7% in the first quarter of last year. Our same center NOI growth was a result of continued increases in rental rates, as well as higher average occupancy rates in the first quarter of 2011 compared to the first quarter of 2010. Our overall occupancy rate for our wholly owned stabilized properties was 96.7% at the end of the first quarter, compared to 94.8% last year.
Reported tenant comparable sales within our wholly owned portfolio increased 5.9% for the rolling 12 months ended March, 2011 to $359 per square foot. Sales for the first quarter increased 4.8% compared to the first quarter of 2010. As consumer spending has returned, shoppers have remained value conscious, allocating a greater portion of disposable income to outlet shopping.
Percentage rents which are paid by tenants once their total sales exceed certain levels represent less than 3% of our expected total revenues during 2011. Approximately 91% of our total revenues are expected to be derived from contractual based rents and tenant expense reimbursements. No single tenant accounts for more than 8.2% of our gross leasable area or 5.1% of our base and percentage rents. Most of our tenants are publicly traded retail companies with very strong balance sheets.
As for our recent developments, our Hilton Head One center in Buford county, South Carolina celebrated its Glorious Green Grand Reopening on Thursday, March 31st. South Carolina Governor Nikki Haley and other local dignitaries were on-hand that day to cut the green ribbon that officially returned this LEED-certified center to operation. Hilton Head One was redeveloped with the area's unique natural beauty and ecology in mind. Early reactions from our tenants have been highly positive with a number of retailers remarking that the weekend opening statistics were higher than anticipated. The center currently has leases signed or out for signature on 94.3% of the leasable square footage. Hilton Head One is compromised of approximately 177,000 square feet of retail with four additional land parcels facing the highway. Panera bread, Olive Garden and Longhorn Steak House occupy three of these parcels.
Our $43 million incremental investment returns this center to the Hilton Head marketplace where it joins its sister center just down the road on Highway 278. Between the two centers, shoppers in the Hilton Head area now have over 90 centers and brand name stores to choose from, many which are new to this upscale tourist market. We are proud of this green redevelopment in Hilton Head which opened just in time for the spring break, the Heritage golf tournament and the busy summer season. We are continuing the process of billing our shadow pipeline of potential new developments in several market across the country where we intend to develop or acquire properties well-suited for outlet shopping centers. Pre-leasing activities continue for our projects in West Phoenix and Scottsdale, Arizona, along with the Houston, Texas market. These markets have received enthusiastic support from our tenant base, and each one has an excellent market potential for an outlet center.
Based upon, among other things, feedback during our due diligence, we terminated the option on a site in the West Phoenix market. Tenant interest in a Tanger outlet center in this market continues to be strong. We are actively exploring alternate sites in the market, and anticipate securing another site in the near future. When Tanger achieves the minimum pre-leasing phase one threshold of at least 50% on these projects, we will break ground and proceed with construction. Grand opening activities should take place about a year after the start of construction, which is currently anticipated to begin in late 2011.
As noted in yesterday's press release, we are actively negotiating the potential acquisition of a number of existing outlet centers in the United States. I know that you will understand that with the nature of these negotiations and the need for high level of confidentiality we are unable to give you more details today on these properties. We plan to be in a position to make a definitive announcement in the near future regarding the satisfactory completion of our due diligence work for one or more of these potential acquisitions. Based upon our current analysis, we anticipate that each of the acquisitions, should they close, will be accretive in the first year of ownership. We feel that these opportunistic acquisitions are an appropriate way to use our strong balance sheet with low leverage to create significant shareholder value. We remain excited about the growth prospects of our Company and our industry, as the tenant community continues to indicate the desire to expand into new markets in the United States and Canada.
Which leads me to an update on our joint venture with RioCan real estate investment trust to develop and lease sites across Canada for Tanger Outlet Centers. We're making great progress and in early March we brought on real estate veteran Tony Grossi as senior managing director to lead the joint venture's efforts. On March 14th, the joint venture announced its first development site in the Northwest quadrant of the greater Toronto area in Halton Hills. The site has high visibility on highway 401 at the James Snow parkway interchange. The Halton Hills project, the first of 10 to 15 that the joint venture intends to develop over the next five to seven years, is scheduled to start in the fourth quarter of 2011 and be ready for an April, 2013 opening.
Immediately after we announced our site, another Canadian developer announced a competing site close by. This competitor has expertise in big box WalMart anchored properties. Our expertise has shown that brand name outlet tenants prefer to partner and lease space with proven developers of fashion-oriented outlet properties. The projects developed will be co-owned by Tanger and RioCan on a 50/50 basis. Tanger's top retailers are looking to Canada for growth, and we are looking forward to providing the outlet centers for them to occupy and prosper.
Based upon -- based on positive trends in the first quarter, we are increasing the bottom of our guidance range for 2011. Our current view of market conditions leads us to believe that our estimated diluted net income per share for 2011 will be between $0.54 and $0.58 per share, and our FFO for 2011 will be between $1.37 and $1.41 per share. Our 2011 guidance includes a projected increase in same center net operating income of between 3% and 4%, up from previous guidance of 2% to 3%. This guidance also assumes that the Company's general and administrative expenses will average approximately $6.5 million per quarter, tenant sales will remain stable, and year-end 2011 occupancy is budgeted at approximately 97%.
Our 2011 earnings estimates do not include any additional rent termination fees, the impact of any potential future refinancing transactions, the sale of any out parcels of land or the sale or acquisition of any properties. We have over 2,000 leases with good credit brand name tenants who provide a continuous and predictable cash flow in good times and in challenging times. We plan to continue to thoughtfully use our resources and to maintain a conservative financial position. Our solid balance sheet with no significant debt maturities until November 2013, and no mortgages encumbering our assets puts us a very strong position for 2010 -- 2011 and many years to come.
The first quarter of 2011 was a pace-setter for the balance of the year. The entire Tanger team is working extremely hard to achieve the extraordinary results the industry and our shareholders have come to expect. We will continue to reinvest in our assets, to upgrade their appearance and tenant mix. Now I would like to open the call to any questions. Operator.
Operator
(Operator Instructions). Our first question comes from the line of Craig Schmidt, Bank of America Merrill Lynch, your line is now open.
Craig Schmidt - Analyst
Great, good morning. On the one hand we see the developers wanting to increase the pace of opening outlet centers. Steve, I'm wondering if you're hearing from the manufacturers of the fashion-oriented outlet stores which in the past have exhibited very consistent and steady growth are willing to significantly increase their pace of new store openings?
Steven Tanger - President, CEO
The CEOs and Chairmans of our tenant partners still view the outlets as a significant growth opportunity for their companies. It's very profitable growth. They have plans to open several new stores, some are ramping up from zero in the last couple of years to two or three this year and some are planning to open many more. Craig, as you know, announcing an outlet development is a lot different than signing leases and actually building a shopping center.
Craig Schmidt - Analyst
Okay, thank you.
Operator
Your next question comes from Todd Thomas, KeyBanc Capital Markets. Your line is now open.
Todd Thomas - Analyst
Hi, good morning. Just a question on the development in Canada. Now that it's been announced, I was just wondering if you can provide some details on that project's expected returns and also some detail on the fee structure with RioCan for this deal.
Steven Tanger - President, CEO
We are a 50/50 partner with RioCan with regard to the expected returns we have not announced an expected return target yet, although I believe it will be consistent with our target of 10% to 11% where we target returns on domestic developments.
Todd Thomas - Analyst
Okay. Any additional detail on how the leasing fees and development fees will be split up?
Steven Tanger - President, CEO
I'm not prepared to announce any of those details today.
Todd Thomas - Analyst
Okay, thank you.
Operator
Your next question comes from Rich Moore, RBC Capital Markets. Your line is now open.
Rich Moore - Analyst
Hello, good morning, guys. Steve, you know with everybody looking for developments as you were mentioning and certainly with Macerich down in Phoenix which is a market you're targeting, Simon in Houston, and then activity in Canada, can you talk a little bit about the whole competitive environment and whether you're seeing direct competition or an increase in direct competition from these big, big potential competitors?
Steven Tanger - President, CEO
There's always going to be competitors. The good news is that the companies that you mentioned are run by very smart, sophisticated, seasoned professional managers of public real estate companies. They will build, if they build, a quality project that will be maintained and marketed appropriately, which long-term will elevate the outlet shopping experience in the mind of most consumers. This is our only business.
Some of these companies you mentioned have various other types of retail property, none of which today appears to be a development candidate. We have 30 years of experience with most of our tenant partners, thus far our tenant partners have embraced and encouraged us to move forward. It's hard to comment on speculation until sites have actually been announced and until properties, until development has actually begun.
Rich Moore - Analyst
All right, thank you. And then I know you've talked in the past about 17 markets or so that you're reviewing for potential projects. Is there any updates behind the developments you've already announced, are you making progress, any further progress in any of those other markets?
Steven Tanger - President, CEO
The other markets we still are identifying sites, negotiating and attempting to get them under control. We anticipated announcing at least one additional new site in one new market before the end of the year.
Rich Moore - Analyst
Okay, thank you. Last thing, thank you, Steve. How would you characterize your ICFC schedule in May versus previous years as far as tenant type meetings?
Steven Tanger - President, CEO
Robust and significantly ahead of the previous two years.
Rich Moore - Analyst
Very good. Thank you.
Operator
Your next question comes from Jay Habermann, Goldman Sachs. Your line is open.
Jay Habermann - Analyst
Good morning. Steve, I know you mentioned some sensitivity around the acquisitions. I'm just curious in terms of the types of dollar volume or the amount of dollar volume you're looking at in potentially, are some of these going to remerchandising, redevelopment opportunities, or it sounds like you mentioned accretive day one, so probably pretty stable assets?
Steven Tanger - President, CEO
Yes, they will be stable assets where feel we can add value either through marketing or filling vacant space or upgrading through tendency. Right now I'm sure you will appreciate and respect the fact that we are under confidentiality agreements and at the appropriate time I would be just so delighted to tell you the details of these acquisitions once our due diligence is complete.
Jay Habermann - Analyst
And in your assumption for being accretive day one, are you assuming roughly the 50/50 mix in terms how you would fund it, 50% equity, 50% debt as you have done in the past?
Steven Tanger - President, CEO
Again please, don't try -- don't pigeon hole us in one financing structure. We have a fortress for a balance sheet which we've built over the last 30 years. This is the time and the cycle where we feel we can use that balance sheet appropriately to add significant shareholder value. When these acquisitions become a reality we will explore and study all of the different financing techniques and structures available, and hopefully come to the right conclusion.
Jay Habermann - Analyst
Okay. And just switching gears a little bit. I know Bloomingdales is looking to increase its outlet exposure. Are you in talks with them and do you see this as an opportunity for your portfolio?
Steven Tanger - President, CEO
We have a very close relationship with the senior management of Bloomingdales and a high level of respect for their retailing and merchandising skills. We have not to-date executed any leases with Bloomingdales, but we are in conversation with them about several markets.
Jay Habermann - Analyst
Okay. I know in your guidance for the year you mentioned sales to be stable. I'm just curious how you've seen the trends so far this year and can you give us any sense of maybe performance by center, whether it's high productivity versus some at the lower end?
Steven Tanger - President, CEO
We have a long track record of not identifying sales on individual properties. Sales were up nicely for the rolling 12 months and for the first quarter. As you know, Jay, we are conservative and there's a lot of external factors that may impact sales and right now our guidance is based upon stable sales If that changes the later we get in the year, we may adjust our guidance.
Jay Habermann - Analyst
Okay. And just final question from me on Deer Park, I know you're sitting at 85% leased. Any thoughts in terms of where you could push that toward as you look to year-end? Is that still 90% still your target?
Steven Tanger - President, CEO
In 2010 we attracted over 9 million shopping visits to Deer Park, which ranked number one in our portfolio. The shoppers are coming. We are attempting through aggressive marketing to create sales volume from the large numbers of people coming to the property. Obviously, the higher the sales volume of the tenant the more attractive it becomes to new tenants. We have executed leases and opened up such high quality tenants as Brooks Brothers and J Crew in the past couple of months. We are in negotiations with numerous other high quality tenants and anticipate that we will be at or above the 90% level, certainly within the next 12 months and our goal is bit end of the year.
Jay Habermann - Analyst
Great, thank you very much.
Operator
Your next question comes from Nathan Isbee, Stifel Nicolaus. Your line is open.
Nathan Isbee - Analyst
Hi, Good morning. Circling back to the competitive environment for outward center development. Have you seen any move by the retailers and by your tenants to use the competition for leverage in terms of rent negotiations to the point where you could start seeing pressure on some of your yields?
Steven Tanger - President, CEO
The tenants are highly skilled in negotiating as you might imagine.
Nathan Isbee - Analyst
Sure.
Steven Tanger - President, CEO
But the competitive, large competitors you mentioned are also highly skilled, and I don't think any of us are going to build on speculation and I know we will not, and based on public comments I suspect that our competitors will not build unless they have get an appropriate return on their investment. So that is the balancing act and it's too early really, Nate, to announce anything until we're ready to break ground. When with we do have the signed leases necessary to break ground, we'd be happy to give you our expected return.
Nathan Isbee - Analyst
Okay, thank you. Going back to the potential acquisitions in the broadest terms. Is it safe to say that the sales productivity of the centers you're looking at are higher then your current portfolio average?
Steven Tanger - President, CEO
I would love to answer your question and all of the other questions, but please respect the fact that we're subject to confidentiality agreements and in a due diligence period on several of these acquisitions, once the due diligence has been completed and is satisfactory and we are prepared to close, we will make the appropriate public disclosures.
Nathan Isbee - Analyst
Okay, thank you.
Operator
Your next questions comes from Quentin Velleley, Citi. Your line is now open.
Quentin Velleley - Analyst
Good morning. I'm here with Michael Bilerman as well. Steve, going back to the Canadian site in Toronto and Calloway's announcement. Do you think that market can justify two outlet centers or is it your view that only one will be built as an outlet center?
Steven Tanger - President, CEO
Well, if you're defining the market between the Calloway site and the Tanger site which is only three or four miles difference, my guess is that only one center will be built and that it will be a successful center. If you're defining the market as the Greater Toronto area, Toronto as you may know is I think the fifth largest city in North America with 5 million, over 5 million people living there, so we believe that Toronto can support in various parts of Toronto more than one outlet center.
Quentin Velleley - Analyst
I guess similar with Houston. I think there's three projects out there at the moment. Do you think that Houston can justify those three or is more likely that one or two will be built?
Steven Tanger - President, CEO
We believe that the South Houston market can support one highly successful outlet center.
Quentin Velleley - Analyst
And then, thirdly, just another one from me, then I'll hand it over to Michael. Just in terms of, I think you commented the West Phoenix option on the land that you had was terminated but the demand is still very high. I'm just wondering what happened so that you terminated that option.
Steven Tanger - President, CEO
As I mentioned previously, during our due diligence among other things, we determined that the fact that we could not get leases signed was one of the determining factors on that particular site, so we terminated that site and we're exploring other options in the market that we feel the tenants will support.
Michael Bilerman - Analyst
Just in terms of the occupancy cost ratio. So you're up I think at you said 8.3%, that's almost up a hundred (inaudible) over the last five years. What's the spread between I guess the new leases that you're signing? Where are those relative to the leases that are expiring?
Steven Tanger - President, CEO
We announced that in the original presentation, that's the retenanting number that we announced, and in the first quarter it was up almost 50%. That's our mark-to-market if you willAlthough it's a small amount of space, I believe it's around 350,000 square feet, that is the amount that we actually can control and bring to market rents.
Michael Bilerman - Analyst
So what's market occupancy cost? Are you signing these things? Are you trying to get 12% or 10%?
Steven Tanger - President, CEO
We're still in -- our target is around 11%, 10.5% to 11.5% depending on the space and the particular center.
Michael Bilerman - Analyst
As you think towards 2012 and 2013, you start comping your 2007 and 2008 leases that were up almost 20%, those were very, very strong years. How does the interplay between what is growing occupancy costs, growing sales and rents that are becoming more toward that market? Just trying to understand that gap as it narrows. Obviously, the spreads this quarter were phenomenal, so I'm just trying to think how does that progress into 2012 and 2013.
Steven Tanger - President, CEO
We're not in the business of looking out two and three years on speculating on rent spreads. I think that we'd all be very delighted to have that continue, which is a reflection of increasing tenant sales. If our tenant sales do continue to increase and we are and we remain the low cost provider, we have the opportunity to continue to raise rents, while our tenants continue to prosper and find this a profitable distribution channel. It has to be a win-win. Michael, your question is too speculative and too far out.
Michael Bilerman - Analyst
Well I guess if you were to break down the portfolio today, if you're at 8.3% occupancy cost how much of the portfolio today is all ready at that 10.5%, 11% target versus something lower just so we start to think about the amount of space that gets renewed every year versus the amount of space that gets released.
Steven Tanger - President, CEO
Let us get back to you on that.
Michael Bilerman - Analyst
Okay. And then in terms of the Toronto site, will Canada follow the same sort of philosophy that you won't close on the land until you get 50% leased?
Steven Tanger - President, CEO
That's exactly right. The RioCan management team has also maintained a conservative development position, an we have agreed that we will not start construction and close on the property until we have 50% of the leases signed.
Michael Bilerman - Analyst
So that's not where you are today? This is still an option on the land at this point?
Steven Tanger - President, CEO
That's correct.
Michael Bilerman - Analyst
And in terms of just lastly on Houston so the three sites, probably only one will win. Where do you stand in terms of your site and whether if you see where Simon and Taubman are in their process?
Steven Tanger - President, CEO
Michael, we'll only know that when one of the three announces they're beginning construction.
Michael Bilerman - Analyst
But I guess, as you're thinking about the other sites, do you start thinking about, does it make sense -- I assume the retailers are probably telling you, look, don't make us choose, you guys figure it out and see where you go?
Steven Tanger - President, CEO
The retailers are exploring their options with I'm sure the three of us and when one of the three decides they're ready to break ground, the other two will have to explore their options and decide what to do.
Michael Bilerman - Analyst
How much money do you have invested as we think about the costs that maybe written off similar to Phoenix?
Steven Tanger - President, CEO
Frank, do you have that number?
Frank Marchisello - EVP, CFO
I believe it's no more than a few hundred thousand dollars.
Michael Bilerman - Analyst
Okay, great, thank you.
Operator
Your next question comes from Cedrik Lachance, Green Street Advisors, your line is now open.
Cedrik Lachance - Analyst
Thank you. Just going back to the retenanted space where you've achieved about 60% releasing spreads. Were there any particular leases that drove that number? In addition to that, what were the level of TA or level of TA packages that were provided in association with those leases?
Steven Tanger - President, CEO
Well, we don't report tenant allowance on individual leases or in aggregate. There are reported in aggregate under second generation tenant or capital expenses, but with regard to any one single tenant, there's 335,000 square feet, it's spread amongst a number of tenants.
Cedrik Lachance - Analyst
So there wasn't many unusual event per se?
Steven Tanger - President, CEO
It's a small sample and each quarter the sample varies and we are working with tenants on retenanting space for the balance of the year, but there's not an extraordinary one or two tenant or one or two spaces that may have affected it.
Cedrik Lachance - Analyst
Okay. And moving back to Deer Park. In terms of the refinancing, the loan has got a one-year option and it can be exercised in May. What are the prospects to exercise that option and alternatively where are you at in terms of renegotiating or negotiating for permanent financing there, and will that require some equity infusion on your part?
Steven Tanger - President, CEO
We're in the process right now of negotiating with the banks and are not prepared to make a definitive announcement yet.
Cedrik Lachance - Analyst
Okay, thank you.
Operator
Your next question comes from Carol Kemple, Hilliard Lyons. Your line is now open.
Carol Kemple - Analyst
Good morning. On your outlet development have you received calls from any of the other publicly traded REITs to talk about joint-venturing those centers or are you looking to go on our own?
Steven Tanger - President, CEO
Which properties are you talking about Carol?
Carol Kemple - Analyst
Your development ones. I know one of the publicly traded REITs has commented that they're interested in one of your markets and might consider possibly maybe joint-venturingHave you received calls from any of them, any of the public REITs?
Steven Tanger - President, CEO
As always, we explore every opportunity available to us and right now nothing's definitive.
Carol Kemple - Analyst
Okay. And with the new leases you signed, are you seeing any kind of trend in what kind of retailers are coming into the outlet centers, any different than typical?
Steven Tanger - President, CEO
No, it's still heavily weighed towards apparel and footwear.
Carol Kemple - Analyst
Okay
Steven Tanger - President, CEO
We unfortunately don't have the luxury of Apple stores, although we would love to have their sales dramatically increasing the average sales in our portfolio. But to date they have not. Consumer electronics remains a void in our business. But other than that it's a similar co-tendency as in the past.
Carol Kemple - Analyst
Okay, great, thank you.
Operator
Your next question comes from Ben Yang, Keefe, Bruyette and WoodsYour line is open.
Ben Yang - Analyst
Hi, good morning. Steven, last quarter you indicated you knew of only one outlet center marketed for sale, and now you indicated a number of acquisition opportunities. While I don't expect to you identify the centers, I am a little curious about what's changed in just the past two months. Is that there's more product for sale? Has your acquisition criteria changed in any way? Are you being more proactive maybe approaching some owners that you think might be willing to sell? How are you sourcing these opportunities?
Steven Tanger - President, CEO
When we had our last call and responded to your question there was one publicly market asset on the market for sale. The other properties we're talking about are under contract with people that we contacted directly or contacted us directly and did not go through a public process.
Ben Yang - Analyst
So when you say under contract, you're doing the due diligence at this point and I think you mentioned only one. You think you expect to close before the year-end?
Frank Marchisello - EVP, CFO
No. I said one or more.
Ben Yang - Analyst
Great, thank you.
Operator
Your next question comes from Tayo Okusanya from Jefferies & Company. Your line is open.
Tayo Okusanya - Analyst
Good morning. Just a couple of questions. Steven, the 30% target, pre-leasing target, for the three projects before you break ground, could you just give a sense of, you know, past projects you did versus leased projects how you're feeling about hitting that 50% number? Does it seem like it's taking a little bit of a longer time this time around or do you feel the pace is on, the interest is the same as you have experienced in the past?
Steven Tanger - President, CEO
The interest and the pace are similar to what we've experienced in the past.
Tayo Okusanya - Analyst
Okay. So you feel pretty good that at some point you should be able to break ground on these projects ?
Steven Tanger - President, CEO
We feel pretty good about it.
Tayo Okusanya - Analyst
Okay, that's helpful. And then the Calloway project in Canada that at least that project already has zoning versus your (Inaudible) project, you are still going through the final zoning approvals. Could you talk a little bit about do you feel that puts you behind the eight ball a little bit? Do you feel zoning in that market is kind of easy to do so it's not really a big issue?
Steven Tanger - President, CEO
Zoning is not easy to do and it is an issue. Our site though is located in a major commercial node in the market with several successful retailers all ready in place and doing business. We are entitled and the land is assembled and could build 230,000 square feet as of right today. We are and have assembled more land and are working with the local communities get the appropriate entitlements to build up to 350,000 to 400,000 feet.
Tayo Okusanya - Analyst
That's helpful. Then the last question. (Inaudible) NOI growth this quarter 6% guidance for the year is between 3% to 4%. Just kind of wondering why guidance is so much lower versus what you're currently tracking to? Is that something unique to the first quarter that you don't expect to get replicated in the rest of the year?
Steven Tanger - President, CEO
In the first quarter compared to last year our occupancy is up significantly and I think the first quarter NOI growth in part includes some of the additional occupancy of tenants.
Tayo Okusanya - Analyst
Okay.
Steven Tanger - President, CEO
At current occupancy there's not a lot of room to fill space because there's not a lot of space to fill, and we're -- our guidance was raised from 2% to 3% to 3% to 4%. If the current pace continues, we'll revisit our guidance, but right now that's where we're comfortable with.
Tayo Okusanya - Analyst
Great, sounds good. Thank you.
Operator
Your next question comes from Christy McElroy UBS. Your line is open.
Ross Nussbaum - Analyst
Steve hey, it's Ross Nussbaum here with Christy. The leases that are expiring this year, how old are they? Are these primarily 10--year-old leases?
Steven Tanger - President, CEO
Ross, most of our leases are five years in duration and some of them have one five-year option, so we can do a study for you, but I would suspect they're five to ten years depending on the mix.
Ross Nussbaum - Analyst
So some are five years and some are five years, then the five-year option kicked in and then those are coming due?
Steven Tanger - President, CEO
That's right.
Ross Nussbaum - Analyst
Okay. In term, and I assume the new leases that you're signing are similar five plus five?
Steven Tanger - President, CEO
Well, they're five years and we are reluctant to give options.
Ross Nussbaum - Analyst
So the majority are option-less?
Steven Tanger - President, CEO
I don't want to give you a number, but right now our target is five-year leases with no options.
Ross Nussbaum - Analyst
Okay. In terms of the rent bumps that are going into those five-year new terms. What's the standard annual rent bump that you're seeing right now?
Steven Tanger - President, CEO
There is no standard. I think they range anywhere from, I don't know, they're a range. For competitive reasons, I don't want to announce the range, but we're comfortable that we will be well ahead of inflation.
Ross Nussbaum - Analyst
Are you structuring those with primary fixed bumps or are you doing more CPI escalator?
Steven Tanger - President, CEO
We try to get away from CPI escalators and have a fixed annual increase which makes the accounting much easier.
Ross Nussbaum - Analyst
Thank you very much.
Operator
Your next question comes from David Leibowitz from Horizon. Your line is now open.
David Leibowitz - Analyst
Thank you. A few unrelated questions if I may. At present, do you have any tenants in bankruptcy?
Steven Tanger - President, CEO
David, there's three small tenants in bankruptcy. The only one of any note is Harry and David, which represents less than 1% of our GLA and substantially less than 1% of our income.
David Leibowitz - Analyst
And the properties that these three tenants occupy, would you be able to rent them at a meaningfully higher rental fee were they to finally give up the ghost?
Steven Tanger - President, CEO
In bankruptcy, because the outlet stores are very profitable and they dispose of excess inventory, the trustees are reluctant to give up the space, but it would be our plan obviously and our goal is to release them as significant spread. With regard to Harry and David, we have 19 leases totaling 50,000 square feet. About a third of that space scheduled to naturally expire in the next 12 months, so we're already in the process, and the bankruptcy court does not control that, we're already in the process of releasing that space.
David Leibowitz - Analyst
Very good. Second question. Given that you have a potential opening in Canada that you may be making some acquisitions, are you fully staffed to accomplish that or are you going to have to add further to the employee count?
Steven Tanger - President, CEO
We have over the past year in anticipation of our growth added several seasoned, highly skilled executives, both at a senior level and at a staff level. With we don't anticipate any significant increase in our census. We feel that right now we're appropriately staffed and looking forward to executing.
David Leibowitz - Analyst
And the last question. In a big picture issue, would a resurgence of inflation be helpful to Tanger over the next 12-24 months?
Steven Tanger - President, CEO
It depends on the impact of interest rates. If inflation heats up and the federal reserve tightens or LIBOR, whatever index you want, goes up and the consumer has to pay more in interest, that may negatively impact. From a macro prospective, I like being in hard assets with low leverage in times of inflation.
David Leibowitz - Analyst
Let me say thank you very much based on that response.
Operator
Your next question comes from Michael O'Dell with AIG Asset Management. Your line is open.
Michael O'Dell - Analyst
Thanks, guys, good morning. Just a quick question on the RioCan (Inaudible) That you have been in discussions with RioCan for a few months now, how you plan to finance at the JV level specifically, whether you plan to guarantee your proportion share of debt, and whether you're in discussions with agencies on the strategy?
Steven Tanger - President, CEO
When we are prepared to break ground and implement financing, we will explore with our partners all the options you mentioned, but right now it's premature.
Michael O'Dell - Analyst
Okay, thanks.
Operator
(Operator Instructions). Your next question comes from Mike Mueller, JPMorgan. Your line is open.
Mike Muller - Analyst
Hey, Steve, I think I missed this when you were talking about the domestic sites in West Phoenix, Scottsdale and Houston. Did you say you expected to start at least one later this year or one later this year and opening up a year later?
Steven Tanger - President, CEO
It is our plan to break ground on at least one of the three by the end of this year.
Mike Muller - Analyst
Got it, that was it. Thank you.
Operator
(Operator Instructions). There are no further questions. I turn the call back to you, sir.
Steven Tanger - President, CEO
Thank you all for participating today and for your interest in our Company. Tanger is the only public REIT with a pure outlet portfolio. We have a conservatively structured balance sheet, high brand recognition, and a tenured senior management team. Tanger has always had and will continue to maintain a disciplined development approach. We currently have a strong portfolio of operating properties across the United States, providing significant returns for our shareholders.
Our pipeline of opportunities for outlet development in the United States and Canada is enviable. For 30 years we have successfully grown our company on a consistent basis and are proud of our track record of delivering long-term increasing value for our stake-holders. Frank and I are always available to answer any questions you may have. Thank you again and have a great day. Think outlets, think Tanger. Good-bye.
Operator
This concludes today's conference. You may now disconnect.