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]

| --- | --- | --- | --- | |-------|-------|-------|-------| | | | | | | | | | | Corporate Information & Analyst Coverage 48 49 146 192 0 0 167 167 168 80 80 82 217 119 109 0 76 84 151 152 200 110 2 5 0 151 159 Key Management Andrew Spodek Chief Executive Officer Jeremy Garber President, Treasurer & Secretary Robert Klein Chief Financial Officer Jane Gural-Senders Member - Corporate Governance & Compensation Committee Board of Directors Patrick Donahoe Andrew Spodek Barry Lefkowitz Anton Feingold | --- | --- ...

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]

Core Insights - Postal Realty Trust (PSTL) reported a revenue of $19.67 million for the quarter ended September 2024, reflecting a year-over-year increase of 22.1% and a surprise of +6.39% over the Zacks Consensus Estimate of $18.49 million [1] - The earnings per share (EPS) for the quarter was $0.30, significantly higher than the $0.04 reported in the same quarter last year, and exceeded the consensus EPS estimate of $0.26 by +15.38% [1] Revenue Breakdown - Rental income for Postal Realty Trust was $18.77 million, surpassing the three-analyst average estimate of $18.40 million, with a year-over-year change of +21.6% [3] - Fee and other revenues amounted to $0.90 million, exceeding the three-analyst average estimate of $0.68 million, representing a year-over-year increase of +34% [3] Stock Performance - Over the past month, shares of Postal Realty Trust have returned -0.3%, while the Zacks S&P 500 composite has seen a +0.4% change [4] - The stock currently holds a Zacks Rank 2 (Buy), indicating potential for outperformance against the broader market in the near term [4]

Core Viewpoint - Postal Realty Trust (PSTL) reported quarterly funds from operations (FFO) of $0.30 per share, exceeding the Zacks Consensus Estimate of $0.26 per share, and up from $0.27 per share a year ago, indicating a 15.38% surprise [1] Financial Performance - The company posted revenues of $19.67 million for the quarter ended September 2024, surpassing the Zacks Consensus Estimate by 6.39%, compared to $16.11 million in the same quarter last year [2] - Over the last four quarters, Postal Realty Trust has exceeded consensus FFO estimates three times [2] Stock Performance and Outlook - Postal Realty Trust shares have declined approximately 1.7% year-to-date, while the S&P 500 has gained 20.1% [3] - The future stock price movement will largely depend on management's commentary during the earnings call [3] Estimate Revisions and Market Position - The current consensus FFO estimate for the upcoming quarter is $0.25 on revenues of $18.73 million, and for the current fiscal year, it is $1.02 on revenues of $72.21 million [7] - The estimate revisions trend for Postal Realty Trust is favorable, resulting in a Zacks Rank 2 (Buy), indicating expected outperformance in the near future [6] Industry Context - The REIT and Equity Trust - Other industry is currently ranked in the top 27% of over 250 Zacks industries, suggesting a positive outlook for stocks within this sector [8]

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].

Core Viewpoint - Postal Realty Trust, Inc. reported solid financial results for the quarter ended September 30, 2024, with significant growth in revenues and strategic acquisitions, while also enhancing its capital structure through increased term loan commitments and new lease agreements with the USPS [1][2]. Financial Performance - Revenues grew by 22% from Q3 2023 to Q3 2024, reaching $19.67 million [2]. - Net income attributable to common shareholders was $1.1 million, or $0.03 per diluted share [2]. - Funds from Operations (FFO) totaled $7.1 million, or $0.24 per diluted share, while Adjusted Funds from Operations (AFFO) were $8.8 million, or $0.30 per diluted share [2]. Property Portfolio & Acquisitions - The company acquired 35 USPS properties for approximately $13.3 million at a weighted average capitalization rate of 7.5% [1][2]. - The owned portfolio was 99.6% occupied, consisting of 1,642 properties across 49 states and one territory, with a total of approximately 6.3 million net leasable square feet [3]. Leasing Activity - As of October 21, 2024, the company executed 80 new leases for 2023 and 106 new leases for 2024, representing 55% and 78% of the respective expired rents [5]. - All new leases include 3% annual rent escalations, marking a shift from historically flat rents [2][5]. Balance Sheet & Capital Markets - As of September 30, 2024, the company had approximately $1.4 million in cash and property-related reserves, with net debt of approximately $277 million and a weighted average interest rate of 4.51% [6]. - The company increased term loan commitments by $50 million, with $40 million drawn to pay down the revolving credit facility [2][11]. Dividend Declaration - The company declared a quarterly dividend of $0.24 per share, equating to an annualized rate of $0.96 per share, payable on November 29, 2024 [8]. Subsequent Events - Subsequent to the quarter end, the company acquired 13 additional properties for approximately $4.2 million and had another 29 properties under contract totaling approximately $10.6 million [9]. - The company sold two properties for a combined price of $6.3 million, achieving a weighted average exit cap rate of 4.9% [10].

Investment Strategy - The investment approach focuses on long-term wealth building, with a typical holding period of 10 years or more [1] - Emphasis is placed on reinvesting dividends from well-managed organizations to compound wealth over time [1] - The strategy includes balancing current income with sustainable growth and seeking opportunities with substantial margin of safety and a wide moat [1] Asset Management - The management of personal and family assets has been ongoing for 15 years, targeting growth across various industries including Media, Marketing, Travel, and Software as a Service [1] - The best investment ideas have been identified in REITs and dividend growth stocks, utilizing fundamental analysis and reasonable future cash flow expectations [1] Investment Accounts - A general rule for asset location involves holding dividend growth stocks in a taxable brokerage account while utilizing a Roth IRA for REIT and BDC investments [1]

Core Viewpoint - Postal Realty Trust, Inc. is set to report its financial results for the third quarter of 2024 on November 4, 2024, after market close, highlighting its ongoing operations and management of properties leased primarily to the USPS [1]. Group 1: Financial Reporting - The financial results for the period ended September 30, 2024, will be announced on November 4, 2024 [1]. - A conference call to discuss these results will take place on November 5, 2024, at 9:00 A.M. Eastern Time [2]. - A telephonic replay of the conference call will be available from November 5, 2024, at 1:00 P.M. Eastern Time until November 19, 2024 [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]. - The properties range from last-mile post offices to industrial facilities, indicating a diverse portfolio focused on postal services [4]. Group 3: Contact Information - For investor relations and media inquiries, the company can be contacted via email at Investorrelations@postalrealtytrust.com or by phone at (516) 232-8900 [5].

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 ...