Company Overview - Postal Realty (NYSE:PSTL) is a market leader in the post office real estate niche, owning over 1600 post office buildings leased to the USPS on 5-year or 10-year terms [1][3] - The company primarily acquires smaller properties, often for under $1 million, which are located throughout the U.S. [3][4] Property and Leasing Characteristics - The properties owned by PSTL are functional and require minimal capital expenditures, with recurring capex at approximately $253,000 quarterly, or about 1.3% of revenues [4] - PSTL enjoys high occupancy rates with a retention rate around 99%, attributed to USPS's mandate to provide consistent service [4][6] - PSTL is the largest player in a fragmented market, owning 6.2 million square feet of post office properties, which allows for negotiating power and the ability to facilitate off-market transactions [5] Growth Outlook - Postal Realty's growth is driven by three main sources: organic rental rate growth, acquisition spreads, and refinancing [7][8] - Organic rental rate growth is currently estimated at just over 3% annually, with recent lease negotiations resulting in longer terms and escalators [9][10] - Acquisition spreads are less predictable, with current debt costs just under 5% and a healthy debt to EBITDA ratio of 5.6X [12][21] - The company has completed $64 million in acquisitions for the year, targeting $90 million in total acquisitions for 2024 at a 7.5% weighted average cap rate [21][22] Financial Performance - The company's AFFO per share has remained relatively flat due to higher interest expenses, which have risen to 25% of NOI [28][30] - Future growth in AFFO/share is projected at about 6%, as interest expenses stabilize and rental rate growth becomes more pronounced [33][32] Management Assessment - Management has been assessed favorably, with a consistent strategy focused on growth within the postal real estate niche and maintaining high occupancy rates [34][36] - The timing of equity issuance has been strategic, with shares issued at prices that support accretive acquisitions [36] Valuation - The consensus AFFO implies a 13X multiple, suggesting slow growth of roughly 2% annually [39][40] - If growth can improve to closer to 6% annually, the company is believed to be significantly undervalued, with a potential valuation of 17X-18X AFFO [41][42] - The company is currently trading at 82% of its net asset value, further supporting the idea of undervaluation [43]

Summary of Postal Realty Trust (PSTL) Stock Performance - Postal Realty Trust (NYSE: PSTL) shares have shown stability over the past year, with a price increase of 5% year-over-year [1] - However, the stock has experienced a decline of 1.3% year-to-date when considering only the price return [1]

Financial Data and Key Metrics Changes - For Q3 2024, the company reported funds from operations (FFO) of $0.24 per diluted share and adjusted funds from operations (AFFO) of $0.30 per diluted share [20] - The net debt to annualized adjusted EBITDA ratio improved to 5.6 times, down from 6.1 times in Q2 [22] - The company announced a quarterly dividend of $0.24 per share, reflecting a 1.1% increase from Q3 2023 [24] Business Line Data and Key Metrics Changes - The company achieved same-store cash NOI growth projections of greater than 4% for 2023, at least 3.25% for 2024, and at least 3% for 2025 [10] - 80 fully executed leases accounted for nearly 55% of the aggregate 2023 expired rent, while 106 fully executed leases represented 78% of the aggregate 2024 expired rent [17][18] - The company acquired 35 properties for $13.3 million at a weighted average cap rate of 7.5% during Q3, adding 106,000 net leasable square feet to the portfolio [19] Market Data and Key Metrics Changes - The company completed $64 million in acquisitions for the year and placed an additional 29 properties totaling $11 million under contract [12] - The company sold two properties for a combined sale price of $6.3 million, achieving a weighted average exit cap rate of 4.9% [13] Company Strategy and Development Direction - The company is focused on expanding its portfolio while exploring asset recycling to redeploy proceeds into accretive acquisitions [15] - A multi-tiered programmatic approach has been developed in collaboration with the Postal Service to streamline the re-leasing process [7][8] - The company aims to maintain a conservative balance sheet while generating value through internal and external growth [24] Management's Comments on Operating Environment and Future Outlook - Management expressed confidence in achieving the $90 million acquisition target for 2024 despite lighter acquisition volumes in Q3 [12][40] - The company believes that political changes will not impact lease negotiations with the Postal Service [30] - Management highlighted the importance of operational efficiencies and expense management in achieving same-store growth projections [34] Other Important Information - The company amended its credit facility, adding a $50 million commitment to its term loan maturing in 2028, which will lower the weighted average interest rate [21][22] - The company continues to decrease cash G&A as a percentage of revenue on an annual basis [24] Q&A Session Summary Question: Discussion on 10-year lease duration - Management clarified that the 10-year lease term is not a default but a strategic decision based on positive rent growth and the goal of executing leases before expiration [26][27] Question: Cash or GAAP lease spreads - Management did not disclose specific leasing spreads but reiterated strong same-store growth projections of 4% for 2023 and 3.25% for 2024 [31][32] Question: Disposition cap rates and future opportunities - Management explained that the recent dispositions were reverse inquiries and expressed confidence in the potential for future capital recycling opportunities [36][37] Question: Confidence in acquisition target - Management maintained confidence in achieving the $90 million acquisition target, citing a strong pipeline and favorable cost of capital [40] Question: Cap rate environment - Management noted that there has not been a significant change in cap rates and that more sellers are considering entering the market [41]

For the quarter ended September 2024, Postal Realty Trust (PSTL) reported revenue of $19.67 million, up 22.1% over the same period last year. EPS came in at $0.30, compared to $0.04 in the year-ago quarter.The reported revenue represents a surprise of +6.39% over the Zacks Consensus Estimate of $18.49 million. With the consensus EPS estimate being $0.26, the EPS surprise was +15.38%.While investors closely watch year-over-year changes in headline numbers -- revenue and earnings -- and how they compare to Wa ...

Postal Realty Trust (PSTL) came out with quarterly funds from operations (FFO) of $0.30 per share, beating the Zacks Consensus Estimate of $0.26 per share. This compares to FFO of $0.27 per share a year ago. These figures are adjusted for non-recurring items.This quarterly report represents an FFO surprise of 15.38%. A quarter ago, it was expected that this company would post FFO of $0.25 per share when it actually produced FFO of $0.26, delivering a surprise of 4%.Over the last four quarters, the company h ...

Portfolio and Acquisitions - As of September 30, 2024, Postal Realty Trust acquired 134 properties leased to the USPS for approximately $61.4 million, increasing its portfolio to 1,642 owned properties[155]. - The company acquired 13 properties for an aggregate of approximately $4.2 million after September 30, 2024[227]. Financial Performance - Rental income increased by $3.4 million to $18.8 million for the three months ended September 30, 2024, representing a 21.6% increase compared to $15.4 million for the same period in 2023[179]. - Total revenues for the three months ended September 30, 2024, were $19.7 million, an increase of $3.6 million or 22.1% from $16.1 million in the prior year[179]. - For the nine months ended September 30, 2024, rental income reached $52.7 million, an increase of $8.0 million or 18.0% from $44.7 million in the same period of 2023[191]. - Total revenues for the nine months ended September 30, 2024, were $55.0 million, up $8.3 million or 17.8% from $46.7 million in the prior year[190]. - Net income for the three months ended September 30, 2024, was $1.3 million, a decrease of $0.1 million or 6.1% from $1.4 million in the prior year[179]. Expenses and Costs - General and administrative expenses increased by $0.5 million to $3.9 million for the three months ended September 30, 2024, a rise of 15.9% from $3.4 million in the previous year[184]. - General and administrative expenses increased by $1.0 million to $12.1 million for the nine months ended September 30, 2024, from $11.1 million for the same period in 2023[195]. - Property operating expenses increased by $2.0 million to $7.0 million for the nine months ended September 30, 2024, reflecting a 41.4% increase from $5.0 million in the same period of 2023[194]. - Total interest expense, net, rose to $3.4 million for the three months ended September 30, 2024, compared to $2.6 million for the same period in 2023, marking a 30.5% increase[188]. - Total interest expense increased to $9.3 million for the nine months ended September 30, 2024, up from $7.3 million for the same period in 2023, primarily due to additional borrowings and increased interest rates[199]. Operational Challenges - The USPS is facing financial and operational challenges that could impact its ability to meet leasing obligations, which may adversely affect Postal Realty Trust's business[165]. - The company anticipates renewing leases that have expired, but there is no guarantee of success, which could impact occupancy and rental income[178]. Debt and Liquidity - As of September 30, 2024, the company had approximately $278.3 million of outstanding consolidated principal indebtedness[214]. - The company had $244.0 million of aggregate principal amount outstanding under its Credit Facilities as of September 30, 2024[205]. - The company expects to meet its short-term liquidity requirements through net cash provided by operations, cash, borrowings under Credit Facilities, and potential issuance of securities[209]. - As of September 30, 2024, total indebtedness was approximately $278.3 million, with $244.0 million in variable-rate debt and $34.3 million in fixed-rate debt[230]. Cash Flow and Dividends - Net cash provided by operating activities increased by $3.0 million to $24.3 million for the nine months ended September 30, 2024, compared to $21.3 million for the same period in 2023[201]. - Cash dividends paid were $0.24 per share for Q3 2024 and $0.72 per share for the nine months ended September 30, 2024[225]. Interest Rate Management - As of September 30, 2024, the company had seven interest rate swaps with a total notional amount of $200.0 million to manage interest rate risk[208]. - If the one-month Adjusted Term SOFR changes by 1.0%, cash flows would increase or decrease by approximately $0.4 million on an annualized basis[230]. - Approximately $200.0 million of the variable-rate debt is related to Term Loans, which have been fixed through Interest Rate Swaps[230]. - The company manages market risk on variable-rate debt through interest rate swaps and may consider using interest cap agreements in the future[231]. Company Structure and Classification - The company is classified as an "emerging growth company," allowing it to take advantage of certain reporting exemptions under the JOBS Act[161]. - The company is required to pay dividends at least equal to 90% of its REIT taxable income to maintain its REIT status[225].

- Agreed to New Rents on all 2023 & 2024 Negotiated Leases -- Increased Term Loan Commitments by $50 Million -- Acquired 35 USPS Properties for $13.3 Million at a Weighted Average Capitalization Rate of 7.5% - CEDARHURST, N.Y., Nov. 04, 2024 (GLOBE NEWSWIRE) -- Postal Realty Trust, Inc. (NYSE: PSTL) (the “Company”), an internally managed real estate investment trust that owns and manages over 2,000 properties leased primarily to the United States Postal Service (the “USPS”), ranging from last-mile post offi ...

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CEDARHURST, N.Y., Oct. 24, 2024 (GLOBE NEWSWIRE) -- Postal Realty Trust, Inc. (NYSE: PSTL) (the “Company”), an internally managed real estate investment trust that owns and manages over 2,000 properties leased primarily to the United States Postal Service (the “USPS”), ranging from last-mile post offices to industrial facilities, announced today that it will report its financial results for the period ended September 30, 2024, on Monday, November 4, 2024, after market close. Webcast and Call Information: Th ...

CEDARHURST, N.Y., Oct. 22, 2024 (GLOBE NEWSWIRE) -- Postal Realty Trust, Inc. (NYSE: PSTL) (the “Company”), an internally managed real estate investment trust that owns and manages over 2,000 properties leased primarily to the United States Postal Service (the “USPS”), ranging from last-mile post offices to industrial facilities, announced today that its board of directors has approved a quarterly dividend on the Company’s Class A common stock in the amount of $0.24 per share. This represents a 1.1% increas ...