Postal Realty Trust(PSTL) - 2025 Q1 - Quarterly Report

Property Acquisitions - In the three months ended March 31, 2025, the company acquired 36 properties leased to the USPS for approximately $16.3 million, including closing costs [150]. - The company acquired 25 properties for an aggregate of approximately$12.7 million subsequent to March 31, 2025 [202]. - The company continuously evaluates possible acquisitions of postal properties, which depend on market conditions and lease terms with USPS [193]. Portfolio Overview - As of March 31, 2025, the company's portfolio consists of 1,738 properties located in 49 states and one territory, comprising approximately 6.5 million net leasable interior square feet [152]. - As of March 31, 2025, properties leased to tenants had an average remaining lease term of approximately 4.0 years [161]. Financial Performance - Rental income increased by $4.9 million to$21.5 million for the three months ended March 31, 2025, representing a 29.4% increase compared to $16.6 million for the same period in 2024 [172]. - Total revenues rose by$4.9 million to $22.2 million for the three months ended March 31, 2025, reflecting a 28.1$17.3 million in the prior year [172]. - Income from operations surged by 106.7% to $6.3 million for the three months ended March 31, 2025, compared to$3.0 million for the same period in 2024 [172]. - Net income reached $2.7 million for the three months ended March 31, 2025, a significant increase of 937.1$0.3 million in the same period of 2024 [172]. - Cash flows from operating activities increased by $4.4 million to$10.8 million for the three months ended March 31, 2025, compared to $6.4 million for the same period in 2024 [182]. Debt and Liquidity - The company has a$150.0 million senior unsecured revolving credit facility and a $75.0 million senior unsecured term loan facility, among other credit facilities [167]. - As of March 31, 2025, the company had$274.0 million of aggregate principal amount outstanding under its Credit Facilities [187]. - The company had approximately $0.6 million of cash and$0.9 million of escrows and reserves as of March 31, 2025 [185]. - 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 [191]. - The company incurred $0.06 million of unused facility fees related to the Revolving Credit Facility during the three months ended March 31, 2025 [196]. Interest Rate Management - The company had nine interest rate swaps with a total notional amount of$250.0 million to manage interest rate risk [190]. - Approximately $274.0 million of the company's indebtedness was variable-rate debt as of March 31, 2025, with$250.0 million related to Term Loans fixed through Interest Rate Swaps [204]. - The company manages market risk on variable-rate debt through interest rate swaps, aiming to reduce floating rate exposure [205]. Dividends and Share Repurchase - The company paid cash dividends of $0.2425 per share during the three months ended March 31, 2025, with a first quarter 2025 common stock dividend declared on April 21, 2025 [199]. - The company has a Share Repurchase Program authorized for up to$25.0 million of Class A common stock, with no shares repurchased as of March 31, 2025 [201]. Operational Considerations - The USPS's financial and operational stability is critical to the company's business, as any decline in USPS's revenue could adversely affect the demand for leasing postal properties [159]. - General and administrative expenses are expected to rise as the portfolio grows, but as a percentage of revenues, these expenses are expected to decrease over time due to efficiencies [165]. - The company operates primarily through modified double-net leases, where the tenant is responsible for utilities and certain maintenance obligations [162]. - To maintain REIT qualification, the company must distribute at least 90% of its REIT taxable income, limiting reliance on retained earnings [194].