The discussion of our results of operations reported in the unaudited, consolidated statements of operations compares the three months ended March 31, 2009 with the three months ended March 31, 2008. The following discussion should be read in conjunction with the unaudited consolidated financial statements appearing elsewhere in this report. Historical results and percentage relationships set forth in the unaudited, consolidated statements of operations, including trends which might appear, are not necessarily indicative of future operations. Unless the context indicates otherwise, the term "Company" refers to Tanger Factory Outlet Centers, Inc. and subsidiaries and the term "Operating Partnership" refers to Tanger Properties Limited Partnership and subsidiaries. The terms "we", "our" and "us" refer to the Company or the Company and the Operating Partnership together, as the text requires.

Cautionary Statements

Certain statements made below are forward-looking statements within the meaning of Section 27A of the Securities Act of 1933, as amended, and Section 21E of the Securities Exchange Act of 1934, as amended. We intend for such forward-looking statements to be covered by the safe harbor provisions for forward-looking statements contained in the Private Securities Reform Act of 1995 and included this statement for purposes of complying with these safe harbor provisions. Forward-looking statements, which are based on certain assumptions and describe our future plans, strategies and expectations, are generally identifiable by use of the words "believe", "expect", "intend", "anticipate", "estimate", "project", or similar expressions. You should not rely on forward-looking statements since they involve known and unknown risks, uncertainties and other factors which are, in some cases, beyond our control and which could materially affect our actual results, performance or achievements. Factors which may cause actual results to differ materially from current expectations include, but are not limited to, those set forth under Item 1A - "Risk Factors" in our Annual Report on Form 10-K for the year ended December 31, 2008. There have been no material changes to the risk factors listed there through March 31, 2009.

General Overview

At March 31, 2009, our consolidated portfolio included 31 wholly-owned outlet
centers in 21 states totaling 9.2 million square feet compared to 29
wholly-owned outlet centers in 21 states totaling 8.4 million square feet at
March 31, 2008. The changes in the number of centers and square feet are due to
the following events:

                                             Square
                                    No. of    Feet
                                    Centers (000's) States
As of March 31, 2008                     29   8,434     21
  New development:
    Washington, Pennsylvania              1     371    ---
  Acquisition:
    Myrtle Beach, South Carolina          1     402    ---
  Center expansions:
    Barstow, California                 ---      19    ---
  Other                                 ---     (8)    ---
As of March 31, 2009                     31   9,218     21

The following table summarizes certain information for our existing outlet centers in which we have an ownership interest as of March 31, 2009. Except as noted, all properties are fee owned.

Location                                       Square              %
Wholly-Owned Outlet Centers                    Feet             Occupied
Riverhead, New York (1)                       729,315           97
Rehoboth Beach, Delaware (1)                  568,868           97
Foley, Alabama                                557,185           91
San Marcos, Texas                             442,006           97
Myrtle Beach Hwy 501, South Carolina          426,417           86
Sevierville, Tennessee (1)                    419,038           98
Myrtle Beach Hwy 17, South Carolina (1) (2)   402,442           97
Hilton Head, South Carolina                   388,094           85
Washington, Pennsylvania                      370,525           82
Charleston, South Carolina                    352,315           91
Commerce II, Georgia                          347,025           93
Howell, Michigan                              324,631           94
Branson, Missouri                             302,992           98
Park City, Utah                               298,379           99
Locust Grove, Georgia                         293,868           95
Westbrook, Connecticut                        291,051           94
Gonzales, Louisiana                           282,403           99
Williamsburg, Iowa                            277,230           91
Lincoln City, Oregon                          270,280           94
Tuscola, Illinois                             256,514           78
Lancaster, Pennsylvania                       255,152           97
Tilton, New Hampshire                         245,563           96
Fort Myers, Florida                           198,950           95
Commerce I, Georgia                           185,750           58
Terrell, Texas                                177,800           94
Barstow, California                           171,300          100
West Branch, Michigan                         112,120           96
Blowing Rock, North Carolina                  104,235          100
Nags Head, North Carolina                      82,178           97
Kittery I, Maine                               59,694          100
Kittery II, Maine                              24,619          100

Unconsolidated Joint Ventures
Deer Park, New York (33.3% owned) (4) 684,952 78 Wisconsin Dells, Wisconsin (50% owned) 264,929 97

(1) These properties or a portion thereof are subject to a ground lease.

(2) Property serves as collateral on a $35.8 million non-recourse mortgage with an interest rate of LIBOR + 1.40%.

(3) Excludes the occupancy rate at our Washington, Pennsylvania outlet center which opened during the third quarter of 2008 and has not yet stabilized.

(4) Includes a 29,253 square foot warehouse adjacent to the property utilized to support the operations of the retail tenants.

RESULTS OF OPERATIONS

Comparison of the three months ended March 31, 2009 to the three months ended March 31, 2008

Base rentals increased $5.7 million, or 15%, in the 2009 period compared to the 2008 period. Approximately $3.8 million of the increase related to our new outlet center in Washington, Pennsylvania which opened in August 2008 and our acquisition in January 2009 of the remaining 50% interest in the joint venture that held the Myrtle Beach Hwy 17, South Carolina center. The Myrtle Beach Hwy 17 outlet center is now wholly-owned and has been consolidated in our 2009 period results. Also, our base rental income increased $1.4 million due to increases in rental rates on lease renewals and incremental rents from re-tenanting vacant space. During the 2009 period, we executed 213 leases totaling 1.0 million square feet at an average increase of 20.4%. This compares to our execution of 239 leases totaling 1.1 million square feet at an average increase of 24.1% during the 2008 period.

In addition, the amount of termination fees recognized in the 2009 period was approximately $400,000 higher when compared to the 2008 period due to several tenants terminating leases early. Payments received from the early termination of leases are recognized as revenue from the time the payment is receivable until the tenant vacates the space.

Also, included in base rentals is the amortization from the value of the above and below market leases recorded as a result of our property acquisitions as either an increase (in the case of below market leases) or a decrease (in the case of above market leases) to rental income over the remaining term of the associated lease. If a tenant vacates its space prior to the contractual termination of the lease and no rental payments are being made on the lease, any unamortized balance of the related above or below market lease value will be written off and could materially impact our net income positively or negatively. At March 31, 2009, the net liability representing the amount of unrecognized below market lease values totaled approximately $3.0 million.

Percentage rentals, which represent revenues based on a percentage of tenants' sales volume above predetermined levels (the "breakpoint"), increased $130,000 or 11%. The entire increase is due the addition of the Washington, PA and Myrtle Beach Hwy 17, SC centers to the wholly-owned portfolio. Reported same-space sales per square foot for the rolling twelve months ended March 31, 2009 were $338 per square foot. Same-space sales is defined as the weighted average sales per square foot reported in space open for the full duration of each comparison period.

Expense reimbursements, which represent the contractual recovery from tenants of certain common area maintenance, insurance, property tax, promotional, advertising and management expenses generally fluctuates consistently with the reimbursable property operating expenses to which it relates. Expense reimbursements, expressed as a percentage of property operating expenses, were 88% and 91% in the 2009 and 2008 periods, respectively. This decrease is primarily a function of our lower average occupancy rates for the portfolio during the 2009 period.

Other income increased $316,000 or 23%, due to management and leasing fees earned from services provided to the Deer Park joint venture which opened in October 2008. This increase in fees was offset by a decrease in fees from service provided to the Myrtle Beach Hwy 17 joint venture which became wholly-owned in January 2009.

Property operating expenses increased $2.5 million, or 13%, in the 2009 period as compared to the 2008 period. The increase is due primarily to the $2.2 million of incremental operating costs from our new Washington, PA outlet center and the now wholly-owned Myrtle Beach Hwy 17, SC outlet center. In addition in the first quarter of 2009, we incurred an increase of approximately $400,000 in snow removal costs at several other properties within our portfolio compared to the 2008 period.

General and administrative expenses increased $664,000, or 13%, in the 2009 period as compared to the 2008 period. The increase is due to a number of factors including: higher expenses related to reserves for doubtful accounts and bankruptcies; higher legal and professional fees and full quarter effect of the restricted shares issued in late February 2008 and additional restricted shares issued in late February 2009. As a percentage of total revenues, general and administrative expenses were 9% for both the 2009 and 2008 periods.

Interest expense increased $1.0 million, or 10%, in the 2009 period compared to the 2008 period. Since the 2008 period, we completed the construction of the Washington, PA outlet center, acquired the remaining 50% interest in the Myrtle Beach Hwy 17 joint venture and completed several major renovations at various centers across our portfolio. These projects increased our debt levels significantly during that time which has resulted in higher interest expense. However, this increase in interest expense was partially offset by lower interest rates that were achieved through the refinancing of certain of our fixed rate debt and the overall decrease in rates on our existing unsecured lines of credit. The average interest rate, including loan cost amortization, on average debt outstanding for the three months ended March 31, 2009 and 2008 was 4.93% and 6.07%, respectively.

Equity in earnings (losses) of unconsolidated joint ventures decreased $1.3 million in the 2009 period compared to the 2008 period. The decrease is due mainly to our equity in the losses incurred by the Deer Park property, which opened during October 2008, totaling $1.1 million due to depreciation charges and leverage on the project. We expect results to improve during the stabilization of the property in its first year of operation. In addition, the 2009 period does not include any equity in earnings from the Myrtle Beach Hwy 17 joint venture as we acquired the remaining 50% interest in January 2009.

On January 5, 2009, we purchased the remaining 50% interest in the Myrtle Beach Hwy 17 joint venture for a cash price of $32.0 million which was net of the assumption of the existing mortgage loan of $35.8 million. The acquisition was funded by amounts available under our unsecured lines of credit. We had owned a 50% interest in the Myrtle Beach Hwy 17 joint venture since its formation in 2001 and accounted for it under the equity method. The joint venture is now 100% owned by us and is consolidated in 2009. The acquisition was accounted for under the provisions of FAS 141R which was effective January 1, 2009. Under these provisions we recorded a gain of $31.5 million which represented the difference between the fair market value of our previously owned interest and its cost basis.

LIQUIDITY AND CAPITAL RESOURCES

Operating Activities

Property rental income represents our primary source of net cash provided by operating activities. Rental and occupancy rates are the primary factors that influence property rental income levels. Since the 2008 period, we have added two outlet centers to our wholly-owned portfolio thus increasing our cash provided by operations. In addition, our rental rates upon renewal and re-tenanting have increased in each of the periods between the 2008 period and the 2009 period. These two factors have more than offset the slight decrease in overall portfolio occupancy on a comparative basis between the periods.

Investing Activities

During the 2009 period, we completed the acquisition of the remaining 50% interest in the joint venture that held the Myrtle Beach Hwy 17, South Carolina center at a cash purchase price of $32.0 million. This increase in cash used in investing activities was offset by a decrease in our additions to rental property. Additions to rental property during 2008 period were significantly higher than the 2009 period due to the expenditures related to our Washington, PA outlet center which opened in August 2008 and two major renovation projects which were on-going during most of that period. There are no significant renovation projects planned during 2009.

As noted in investing activities above, during the 2009 period we completed the acquisition of the remaining 50% interest in the joint venture that held the Myrtle Beach Hwy 17, SC center funding the majority of the cash purchase price with amounts available under our unsecured lines of credit facilities. This increase in cash provided by financing activities was offset by a decrease in additions to rental property as our development pipeline has decreased when compared to the 2008 period. The 2008 period included significant expenditures to complete the construction of the Washington, PA outlet center which eventually opened in August 2008 and the two major renovation projects discussed above.

Current Developments and Dispositions

We intend to continue to grow our portfolio by developing, expanding or acquiring additional outlet centers. In the section below, we describe the new developments that are either currently planned, underway or recently completed. However, you should note that any developments or expansions that we, or a joint venture that we are involved in, have planned or anticipated may not be started or completed as scheduled, or may not result in accretive net income or funds from operations. In addition, we regularly evaluate acquisition or disposition proposals and engage from time to time in negotiations for acquisitions or dispositions of properties. We may also enter into letters of intent for the purchase or sale of properties. Any prospective acquisition or disposition that is being evaluated or which is subject to a letter of intent may not be consummated, or if consummated, may not result in an increase in net income or funds from operations.

WHOLLY OWNED CURRENT DEVELOPMENTS

Expansions at Existing Centers

During the first quarter of 2009 we continued construction activities on a 23,000 square foot expansion at our Commerce II, Georgia outlet center. We expect tenants to begin opening during the second quarter of 2009.

Commitments to complete construction of our expansions and renovations, and other capital expenditure requirements amounted to approximately $3.5 million at March 31, 2009. Commitments for construction represent only those costs contractually required to be paid by us.

Potential Future Developments

We currently have an option for a new development site located in Mebane, North Carolina on the highly traveled Interstate 40/85 corridor, which sees over 83,000 cars daily. The site is located halfway between the Research Triangle Park area of Raleigh, Durham, and Chapel Hill, and the Triad area of Greensboro, High Point and Winston-Salem. During the option period we will be analyzing the viability of the site and determining whether to proceed with the development of a center at this location.

We currently have an option for a new development site located in Irving, Texas, which would be our third in the state. The site is strategically located west of Dallas at the North West quadrant of busy State Highway 114 and Loop 12 and will be the first major project planned for the Texas Stadium Redevelopment Area. It is also adjacent to the upcoming DART light rail line (and station stop) connecting downtown Dallas to the Las Colinas Urban Center, the Irving Convention Center and the Dallas/Fort Worth Airport.

At this time, we are in the initial study period on these potential new locations. As such, there can be no assurance that either of these sites will ultimately be developed. These projects, if realized, would be primarily funded by amounts available under our unsecured lines of credit but could also be funded by other sources of capital such as collateralized construction loans, public debt or equity offerings as necessary or available.

At March 31, 2009, approximately 96% of our outstanding debt represented unsecured borrowings and approximately 95% of the gross book value of our real estate portfolio was unencumbered. We maintain unsecured, revolving lines of credit that provided for unsecured borrowings of up to $325.0 million. Five of our six lines of credit, representing $300.0 million, have maturity dates of June 2011 or later. The remaining line of credit, which provides for borrowings of up to $25.0 million, matures in June 2009 and had no amounts outstanding as of March 31, 2009.

In May 2009, Exchangeable Notes of the Operating Partnership in the principal amount of $142.3 million were exchanged for Company common shares, representing approximately 95.2% of the total outstanding prior to the exchange offer. In the aggregate, the exchange offer resulted in the issuance of approximately 4.9 million Company common shares and the payment of approximately $1.2 million in cash for accrued and unpaid interest and in lieu of fractional shares. Following settlement of the exchange offer, approximately $7.2 million of Exchangeable Notes remained outstanding.

We intend to retain the ability to raise additional capital, including public debt or equity, to pursue attractive investment opportunities that may arise and to otherwise act in a manner that we believe to be in our shareholders' best interests. We have no significant debt maturities until 2011. We are a well-known seasoned issuer with a shelf registration that allows us to register unspecified amounts of different classes of securities on Form S-3. We intend to update our shelf registration during the second quarter of 2009. To generate capital to reinvest into other attractive investment opportunities, we may also consider the use of additional operational and developmental joint ventures, the sale or lease of outparcels on our existing properties and the sale of certain properties that do not meet our long-term investment criteria. Based on cash provided by operations, existing credit facilities, ongoing negotiations with certain financial institutions and our ability to sell debt or issue equity subject to market conditions, we believe that we have access to the necessary financing to fund the planned capital expenditures during 2009.

We anticipate that adequate cash will be available to fund our operating and administrative expenses, regular debt service obligations, and the payment of dividends in accordance with Real Estate Investment Trust, or REIT, requirements in both the short and long-term. Although we receive most of our rental payments on a monthly basis, distributions to shareholders are made quarterly and interest payments on the senior, unsecured notes are made semi-annually. Amounts accumulated for such payments will be used in the interim to reduce the outstanding borrowings under our existing lines of credit or invested in short-term money market or other suitable instruments.

We believe our current balance sheet position is financially sound; however, due to the current weakness in and unpredictability of the capital and credit markets, we can give no assurance that affordable access to capital will exist between now and 2011 when our next debt maturities occur. As a result, our current primary focus is to strengthen our capital and liquidity position by controlling and reducing construction and overhead costs, generating positive cash flows from operations to cover our dividend and reducing outstanding debt.

On April 9, 2009, our Board of Directors declared a $.3825 cash dividend per common share payable on May 15, 2009 to each shareholder of record on April 30, 2009, and caused a $.7650 per Operating Partnership unit cash distribution to be paid to the Operating Partnership's noncontrolling interest. The Board of Directors also declared a $.46875 cash dividend per 7.5% Class C Cumulative Preferred Share payable on May 15, 2009 to holders of record on April 30, 2009.

Off-Balance Sheet Arrangements

The following table details certain information as of March 31, 2009 about
various unconsolidated real estate joint ventures in which we have an ownership
interest:

                                                        Carrying Value  Total Joint
                             Opening  Ownership Square  of Investment  Venture Debt
   Joint Venture    Center     Date       %      Feet   (in millions)  (in millions)
                   Location
                  Deer Park,
                     Long
     Deer Park    Island, NY   2008     33.3%   684,952      $4.2         $262.9

                  Wisconsin
                    Dells,

We may issue guarantees for the debt of a joint venture in order for the joint venture to obtain funding or to obtain funding at a lower cost than could be obtained otherwise. We are party to a joint and several guarantee with respect to the construction loan obtained by the Wisconsin Dells joint venture during the first quarter of 2006, which currently has a balance of $25.3 million. We are also party to a joint and several guarantee with respect to the loans obtained by the Deer Park joint venture which currently have a balance of $262.9 million.

Each of the above ventures contains provisions where a venture partner can trigger certain provisions and force the other partners to either buy or sell their investment in the joint venture. Should this occur, we may be required to sell the property to the venture partner or incur a significant cash outflow in order to maintain ownership of these outlet centers.

The following table details our share of the debt maturities of the unconsolidated joint ventures as of March 31, 2009 (in thousands):

Joint Venture     Our Portion of   Maturity Date   Interest
                Joint Venture Debt                   Rate
Deer Park            $87,640         5/17/2011     Libor +
                                                 1.375-3.50%
Wisconsin Dells      $12,625         2/24/2010     Libor +
                                                    1.30%

Critical Accounting Policies and Estimates

Refer to our 2008 Annual Report on Form 10-K for a discussion of our critical accounting policies which include principles of consolidation, acquisition of real estate, cost capitalization, impairment of long-lived assets and revenue recognition. There have been no material changes to these policies in 2009.

Related Party Transactions

As noted above in "Off-Balance Sheet Arrangements", we are 50% owners of the
Wisconsin Dells joint venture and a 33.3% owner in the Deer Park joint venture
currently and were a 50% owner of Myrtle Beach Hwy 17 during 2008. These joint
ventures pay us management, leasing, marketing and development fees, which we
believe approximate current market rates, for services provided to the joint
ventures. During the three months ended March 31, 2009 and 2008, respectively,
we recognized the following fees (in thousands):

                                                       Three months ended
                                                             March 31,
                                                   2009               2008
          Fee:
            Management and leasing                $ 471              $ 228
            Marketing                                39                 34
          Total Fees                              $ 510              $ 262

Tanger Family Limited Partnership is a related party which holds a limited partnership interest in, and is the noncontrolling interest in the Operating Partnership. Stanley K. Tanger, the Company's Chairman of the Board, is the sole general partner of Tanger Family Limited Partnership. The only material related party transaction with Tanger Family Limited Partnership is the payment of quarterly distributions of earnings which were $2.3 million and $2.2 million for the three months ended March 31, 2009 and 2008, respectively.

Recently Issued Accounting Pronouncements . . .