Core Viewpoint - Postal Realty Trust, Inc. will report its financial results for the period ended March 31, 2025, on April 30, 2025, after market close [1] Group 1: Financial Reporting - The financial results will be discussed in a webcast and conference call on May 1, 2025, at 9:00 A.M. Eastern Time [2] - A telephonic replay of the call will be available from May 1, 2025, at 1:00 P.M. Eastern Time until May 15, 2025, at 11:59 P.M. Eastern Time [3] Group 2: Company Overview - Postal Realty Trust, Inc. is an internally managed real estate investment trust that owns and manages over 2,100 properties leased primarily to the United States Postal Service [4]

Core Points - Postal Realty Trust, Inc. announced a quarterly dividend of $0.2425 per share, marking a 1.0% increase from the first quarter 2024 dividend [1] - The dividend will be payable on May 30, 2025, to stockholders of record as of May 1, 2025 [1] Company Overview - Postal Realty Trust, Inc. is an internally managed real estate investment trust that owns and manages over 2,100 properties primarily leased to the United States Postal Service (USPS) [2]

Financial Data and Key Metrics Changes - The company reported an AFFO per share of $1.16 for 2024, marking an increase of 8.4% year over year and exceeding the Street consensus by over 9% at the start of 2024 [7] - Funds from operations (FFO) for Q4 2024 was $0.30 per diluted share, while adjusted funds from operations (AFFO) was $0.35 per diluted share [22] - The board approved a quarterly dividend of $0.2425 per share, a 1% increase from Q4 2023, marking the seventh consecutive year of dividend increases [23] - The net debt to annualized adjusted EBITDA ratio was 5.2 times at the end of the year, reflecting a deleveraging from the end of 2023 [25] Business Line Data and Key Metrics Changes - In 2024, the company acquired 197 properties for $91 million at a weighted average cap rate of 7.6% [11] - The company updated its same-store cash NOI guidance for 2025 to be between 4% and 6%, up from prior guidance of at least 3% [9] - The total net lump sum catch-up payment received during Q4 was $1.5 million, with an additional $400,000 received in 2025 [18] Market Data and Key Metrics Changes - The company maintained a current occupancy rate of 99.8% and has averaged a 99% lease retention rate with the Postal Service over the past ten-plus years [13] - The Postal Service's lease expenses represent only 1.5% of its total operating budget, indicating a stable relationship with the company [13][34] Company Strategy and Development Direction - The company aims to drive internal growth while pursuing an acquisition-driven external growth plan [7] - The focus remains on lease execution for 2025 expirations and negotiating rents for 2026 expirations [19] - The company is well-positioned for future growth due to its strong relationship with postal property owners and the critical role of the Postal Service in the economy [16] Management's Comments on Operating Environment and Future Outlook - Management expressed confidence in the Postal Service's continued tenancy and the importance of their facilities to the logistics network [13][39] - The company anticipates acquisition volume in 2025 to be between $80 million and $90 million, targeting a weighted average cap rate at or above 7.5% [11] - Management highlighted the importance of the Postal Service's infrastructure and its role in driving commerce [14][15] Other Important Information - The company completed its first meaningful dispositions as a public company, selling two properties for total gross proceeds of $6.3 million [12] - The company has a $150 million senior unsecured revolving credit facility with $136 million undrawn, maintaining low leverage and minimizing exposure to variable rate debt [24] Q&A Session Summary Question: Impact of new postmaster general on lease agreements - Management indicated that the new postmaster general would not change existing lease documents, as lease expenses are a low priority for the Postal Service [33][34] Question: Postal Service's cost-cutting measures and facility eliminations - Management believes there will be no changes to the infrastructure related to the facilities they invest in, as the Postal Service has stated there will be no disruption to their retail network [39] Question: Same-store NOI growth and G&A expenses - Management confirmed that the anticipated same-store NOI growth for 2025 is between 4% and 6%, with G&A expenses expected to rise slightly [46][47] Question: Catch-up rent payments and revenue run rate - Management clarified that they are now caught up on leases, with a clear run rate for the upcoming year based on executed leases [55]

Financial Data and Key Metrics Changes - The company reported an AFFO per share of $1.16 for 2024, marking an increase of 8.4% year over year and exceeding the Street consensus by over 9% at the start of 2024 [7] - Funds from operations (FFO) for Q4 was $0.30 per diluted share, while adjusted funds from operations (AFFO) was $0.35 per diluted share [22] - The board approved a quarterly dividend of $0.2425 per share, a 1% increase from Q4 2023, marking the seventh consecutive year of dividend increases [23] - The net debt to annualized adjusted EBITDA ratio was 5.2 times at the end of the year, reflecting a deleveraging from the end of 2023 [25] Business Line Data and Key Metrics Changes - In 2024, the company acquired 197 properties for $91 million at a weighted average cap rate of 7.6% [11] - The company anticipates acquisition volume in 2025 to be between $80 million and $90 million, targeting a weighted average cap rate at or above 7.5% [11] - The total net lump sum catch-up payment received during Q4 was $1.5 million, with an additional $400,000 received in 2025 [18] Market Data and Key Metrics Changes - The company reported a current occupancy rate of 99.8% and an average lease retention rate of 99% with the Postal Service over the past ten years [13] - The Postal Service's lease expenses represent only 1.5% of its total operating budget, indicating a stable relationship with the company [13][34] Company Strategy and Development Direction - The company aims to drive internal growth while pursuing an acquisition-driven external growth plan [7] - The management emphasized the importance of maintaining strong relationships with postal property owners to expand the portfolio [16] - The company is focused on executing leases for 2025 expirations and negotiating rents for 2026 expirations [19] Management's Comments on Operating Environment and Future Outlook - Management expressed confidence in the Postal Service's continued tenancy and the stability of their lease agreements despite changes in leadership [33] - The Postal Service's recent cost-cutting measures are not expected to disrupt the company's operations or the facilities they invest in [39] - The company is optimistic about its acquisition pipeline and internal growth story, projecting AFFO for 2025 to be between $1.20 and $1.22 per share [10][27] Other Important Information - The company completed its first meaningful dispositions as a public company, selling two properties for total gross proceeds of $6.3 million [12] - The company has a $150 million senior unsecured revolving credit facility with $136 million undrawn, maintaining low leverage and minimizing exposure to variable rate debt [24] Q&A Session Summary Question: Impact of new postmaster general on lease agreements - Management indicated that the new postmaster general is not expected to change existing lease documents, as the company has a strong process in place for lease execution [33] Question: Postal Service's cost-cutting measures and facility eliminations - Management believes that the cost-cutting measures will not affect the infrastructure related to the facilities they invest in, as the Postal Service has stated there will be no disruption to their retail network [39] Question: Same-store NOI growth and G&A expenses - Management confirmed that the same-store NOI growth for 2025 is projected to be between 4% and 6%, with G&A expenses expected to increase slightly [46] Question: Catch-up rent payments in Q4 - Management clarified that the catch-up rent payments were part of the top-line revenue, and they are now caught up with the expiration schedule for leases [54]

Corporate Information & Analyst Coverage | Key Management | | | --- | --- | | Andrew Spodek | Chief Executive Officer | | Jeremy Garber | President, Treasurer & Secretary | | Robert Klein | Chief Financial Officer | | Board of Directors | Board Responsibilities | | Patrick Donahoe | Chair of the Board, Member - Audit Committee | | Andrew Spodek | Chief Executive Officer, Director | | Barry Lefkowitz | Chair of Audit Committee, Member - Corporate Governance & Compensation Committee | | Anton Feingold | Chair ...

Portfolio and Acquisitions - Postal Realty Trust, Inc. provided an update on its portfolio, collections, acquisitions, and financial position for Q4 2024[4] - The company reported significant acquisitions throughout 2024, enhancing its overall portfolio[4] Financial Position - The press release includes a detailed analysis of the company's balance sheet at year-end 2024[4]

Real Estate Investments - As of December 31, 2024, the company had net investments of approximately $606.0 million in 1,703 real estate properties, with an occupancy rate of 99.6%[24] - In 2024, the company acquired 197 properties leased primarily to the USPS for approximately $90.8 million, totaling about 560,895 net leasable interior square feet[27] - The company sold two real estate properties for net proceeds of $6.0 million, recording a net gain of $2.4 million[27] - The company manages an additional 360 properties owned by its CEO and affiliates, with a right of first offer to purchase 214 of these properties[24] - As of December 31, 2024, the company owned a portfolio of 1,703 properties across 49 states and one territory, totaling approximately 6.4 million net leasable interior square feet[209] Financial Performance - The quarterly dividend increased from $0.2375 for Q4 2023 to $0.2425 for Q4 2024, continuing a pattern of annual increases since the IPO[28] - The company issued 1,420,791 shares of Class A common stock under its ATM Program during 2024, raising approximately $20.4 million in gross proceeds[27] - The company may incur significant maintenance and capital expenses under its leases, which could reduce cash available for distribution and impact financial performance[78] - The ability to pay dividends may be adversely affected by various factors, including financial performance and economic conditions[132] - The company must distribute at least 90% of its REIT taxable income annually to maintain its REIT qualification, which may limit its ability to fund future capital needs[106] USPS Dependency and Risks - The company is substantially dependent on the demand for leased postal properties, with nearly all revenue derived from properties leased to the USPS[49] - The USPS has been implementing operational reforms and cost reduction measures under its Ten-Year Plan, which may lead to facility consolidations and affect lease renewals[49] - The USPS has significant outstanding debt obligations and is subject to rising expenses, which could impact its ability to meet financial obligations and affect lease agreements[54][57] - The Postal Service Reform Act has alleviated some obligations for the USPS, but significant underfunded liabilities remain, particularly regarding retiree health benefits[55] - The company may experience adverse effects if the USPS becomes unable to meet its lease payments or defaults on its obligations[62] Competition and Market Conditions - Competition from package delivery service providers like FedEx, Amazon, and UPS is increasing, potentially diverting volume away from the USPS and impacting demand for leased properties[61] - The company faces significant competition for USPS-leased properties, which may hinder its ability to acquire desired properties at competitive prices[71] - The USPS's operational changes and potential litigation could lead to reputational harm and reduced demand for USPS services, adversely affecting the company's business[68] - Rising property taxes due to rate changes or reassessments could negatively impact the company's financial condition and ability to make distributions to stockholders[85] - An increase in USPS or U.S. government-owned real estate could lead to challenges in renewing leases and expanding the company's portfolio[84] Regulatory and Compliance Risks - Changes in U.S. federal government policies or USPS restructuring could materially affect lease renewal opportunities and overall business operations[59] - The company must comply with various covenants in its debt instruments, and failure to do so could result in defaults that adversely affect its financial condition and liquidity[91] - The company is required to monitor its investments in TRS to ensure compliance with ownership limitations[173] - Compliance with various federal, state, and local laws may incur significant costs and affect the timing and cost of future developments[119] - The company may incur additional costs to bring properties into compliance with the ADA and FHAA, which could adversely impact financial condition and cash flow[120] Economic and Market Risks - Inflation has significantly increased, impacting operating expenses, interest expenses, and real estate acquisition costs, which could adversely affect financial performance[186] - Rising interest rates may lead to decreased real estate valuations and negatively impact the company's market capitalization and trading price[187] - The company may face increased costs and reduced cash flow if it has to fund distributions from working capital or asset sales due to insufficient cash from operations[195] - An increase in market interest rates may adversely affect the market price of the company's Class A common stock, as investors may seek higher dividend yields[185] - The company may be forced to borrow funds during unfavorable market conditions to meet its distribution requirements, potentially affecting its financial condition[180] Cybersecurity and Technology Risks - The company may face risks related to cybersecurity and environmental, social, and governance factors that could affect its operations and market perception[60] - Cybersecurity risks pose a threat to the company's operations and financial condition, with potential disruptions and increased costs for protection measures[197] - The Audit Committee oversees cybersecurity and information technology risk exposures, holding quarterly meetings and receiving periodic reports from management and the managed service provider (MSP)[205] - The company employs a multidisciplinary Technology Committee to assess and manage cybersecurity threats and risks, meeting at least quarterly[205] - The company has not identified any material cybersecurity risks that have affected or are likely to affect its business, financial condition, or results of operations[204] Management and Governance - The company relies on key personnel for its growth strategies, and the loss of these individuals could negatively impact its business and market perception[96] - The company’s Board of Directors can change strategies and policies without stockholder approval, increasing the risk of default under debt obligations[153] - The company is classified as a "smaller reporting company," allowing it to rely on reduced disclosure requirements, which may affect investor perception of its common stock[152] - The company may issue additional OP Units to third parties without stockholder consent, which could dilute ownership and affect distributions to stockholders[156] - Certain provisions in the partnership agreement may delay or prevent unsolicited acquisitions, which could discourage potential offers[148] Environmental and Social Risks - Environmental liabilities could result in significant costs, including investigation and remediation of hazardous substances, which may exceed the value of the properties[109] - The company is exposed to risks from natural disasters and climate change, which could result in physical damage to properties and increased operational costs[113] - The company may face reputational damage and additional costs related to environmental, social, and governance (ESG) expectations from investors[199] - Increased use of AI and automation by tenants may lead to unforeseen changes in space requirements, potentially impacting revenues and operating margins[124] - The company may struggle to compete effectively in a rapidly changing marketplace due to competitors' access to advanced technology[129]

Group 1 - Postal Realty Trust (PSTL) reported quarterly funds from operations (FFO) of $0.35 per share, exceeding the Zacks Consensus Estimate of $0.27 per share, and up from $0.26 per share a year ago, representing a 29.63% surprise [1] - The company achieved revenues of $21.37 million for the quarter ended December 2024, surpassing the Zacks Consensus Estimate by 11.98%, compared to $17 million in the same quarter last year [2] - Over the last four quarters, Postal Realty Trust has exceeded consensus FFO estimates three times and revenue estimates three times [2] Group 2 - The stock has underperformed, losing about 4.1% since the beginning of the year, while the S&P 500 has gained 1.3% [3] - The current consensus FFO estimate for the upcoming quarter is $0.27 on revenues of $19.56 million, and for the current fiscal year, it is $1.08 on revenues of $81.19 million [7] - The Zacks Industry Rank for REIT and Equity Trust - Other is in the bottom 46% of over 250 Zacks industries, indicating potential challenges for the sector [8]

Core Insights - Postal Realty Trust, Inc. announced a strong operational year for 2024, with an AFFO of $1.16 per share, representing an 8.4% increase from 2023, and provided 2025 AFFO guidance of $1.20 to $1.22 per diluted share [4][15] Financial Performance - For the year ended December 31, 2024, total revenues increased to $76.4 million from $63.7 million in 2023, driven by a 20% increase in rental income [28] - Net income attributable to common shareholders for 2024 was $6.6 million, or $0.21 per diluted share, compared to $3.7 million, or $0.12 per diluted share in 2023 [28] - The Company raised its quarterly dividend to $0.2425 per share, marking the seventh consecutive year of dividend increases [12] Property Portfolio & Acquisitions - The Company's portfolio was 99.6% occupied, consisting of 1,703 properties across 49 states and one territory, with a weighted average rental rate of $10.60 per leasable square foot [5] - In 2024, the Company acquired 197 properties for approximately $91 million at an average capitalization rate of 7.6% [6][7] Leasing Activity - As of February 14, 2025, the Company executed 89 new leases representing 95% of the aggregate 2023 expired rent and 119 new leases representing 99% of the aggregate 2024 expired rent, all subject to 3% annual rent escalations [7][8] Balance Sheet & Capital Markets - As of December 31, 2024, the Company had approximately $2.4 million in cash and property-related reserves, with net debt of approximately $296 million at a weighted average interest rate of 4.35% [9] - The Company amended its credit facilities to add $50 million in commitments to a term loan maturing in February 2028 [10] Subsequent Events - Subsequent to the quarter end, the Company acquired 18 properties for approximately $8.4 million and had another 14 properties under definitive contracts totaling approximately $8.9 million [13]

Core Viewpoint - Postal Realty Trust, Inc. will report its financial results for the period ended December 31, 2024, on February 26, 2025, after market close [1] Group 1: Financial Reporting - The company will host a webcast and conference call to discuss the fourth quarter 2024 financial results on February 27, 2025, at 9:00 A.M. Eastern Time [2] - A telephonic replay of the call will be available starting at 1:00 P.M. Eastern Time on February 27, 2025, through March 13, 2025 [3] Group 2: Company Overview - Postal Realty Trust, Inc. is an internally managed real estate investment trust that owns and manages over 2,000 properties leased primarily to the USPS [4]