Riverhead, NY Myrtle Beach, SC 9.33 ’03 ’02 ’01 GROSS LEASABLE AREA (in millions of square feet) ’00 ’99 6.19 5.44 5.28 5.25 our tenants’ stores are very profitable for them and that fact provides us with a good opportunity to successfully negotiate a large percentage of lease renewals. Our leasing team was very busy during 2003 as we executed over 1.1 million square feet of new and renewal leases and achieved an 80% reten- tion rate for tenants in their current spaces when their leases expired at the end of its term. Retaining successful existing tenants in their current space is the most efficient way to lease space and maintain high occupancy in our cen- ters. There is no lost rent, there is less leasing time involved in the process, and there is typically no or very little additional capital required to keep the existing tenants in the same space.  We also realize that our centers, and our tenant mix, must remain up to date. That is why we are very aggressive in targeting new manufacturers and brand name retailers to open stores in our centers. We are constantly looking for that hot new brand and quickly meet with their senior management team to educate them on how profitable the outlet distribution channel can be to their bottom line. This is not something new. Over the years, we have introduced many ten- ants to the outlet center industry. Tenants such as Liz Claiborne, Polo Ralph Lauren, The Gap, Ann Taylor and Brooks Brothers, just to name a few, opened their first outlet stores in a Tanger center. We are also continually investing addi- tional capital in our properties, periodically providing them with what we affec- tionately call an “extreme makeover”. These are long-term assets that must be constantly maintained in order to provide long-term value for our shareholders. During 2003, we also completed two expansions, a 35,000 square foot expansion in Sevierville, Tennessee and a 64,000 square foot expansion at our center in Myrtle Beach, South Carolina. We also acquired a 29,000 square foot, 100% leased building located contiguous to our Sevierville center in January 2003. The Sevierville center, which had 122,684 square feet when originally purchased in 1997, now contains a total of approximately 419,000 square feet. Additionally, we are underway with a 79,000 square foot third and final phase at our Myrtle Beach property. Upon completion, it will bring the total size of this center to 403,000 square feet. These types of expansions have had a positive impact on our bottom line and add incremental value to these assets which ultimately will benefit our shareholders. We begin 2004 with two proposed Tanger Outlet Centers in our pipeline. We are currently pre-leasing space for a new Tanger center in Deer Park, Long Island, New York, 35 miles east of Manhattan and a site located 25 miles southwest of Pittsburgh, Pennsylvania. As those of you who have been share- holders of Tanger for some time may know, we do not build on speculation. The demand for space from our tenants must exist in the form of signed leases before we begin construction. The demand for space from our tenants appears to be strong, and we believe the supply / demand equilibrium is cur- rently in our favor. Preliminary tenant interest in these two sites has been positive and predevelopment activities continue in conjunction with our pre- leasing activity in hopes of delivering two new Tanger centers in the near future. 12 | 2003 ANNUAL REPORT