Summary of Postal Realty Trust (PSTL) FY Conference Call - August 26, 2025 Company Overview - **Company**: Postal Realty Trust (PSTL) - **Industry**: Real Estate Investment Trust (REIT) focused on postal service properties Key Points and Arguments 1. **Market Size and Structure**: The postal service leases approximately 23,000 facilities, paying around $1.6 billion in rent, which constitutes only 1.5% of its operating expenses, indicating a fragmented market with significant potential for growth [6][7][8] 2. **Retention Rate**: The company has maintained a retention rate of over 99% for the past decade, showcasing the stability of its rental income despite economic fluctuations [3][23] 3. **Growth Strategy**: The company has grown its portfolio from 270 properties to over 1,850 properties since going public, acquiring 200 to 300 properties annually [15][16] 4. **Acquisition Guidance**: The company has adjusted its acquisition guidance for the year to be at or above $90 million, with a focus on properties purchased at or above a 7.5% cap rate [17] 5. **Earnings Growth**: The company reported an 8% year-over-year earnings growth and updated its earnings guidance to $1.24 to $1.26 per share, alongside same-store NOI guidance of 7% to 9% [17][18] 6. **Lease Structure**: The company has instituted 10-year leases with 3% annual escalations, which is more favorable compared to the typical 5-year fixed leases held by other owners [21][72] 7. **Off-Market Deals**: Approximately 75% of the company's deals are off-market, providing a competitive advantage in acquiring properties without broker involvement [14] 8. **Tax Efficiency**: The operating partnership units allow property owners to exchange their properties without triggering capital gains tax, making it an attractive option for sellers [10][64] 9. **Market Positioning**: The company aims to capture 8-9% of the $12-15 billion postal real estate market, with a focus on increasing its market cap and liquidity [50][52] 10. **Cost of Capital**: As the company grows, it anticipates a decrease in its cost of capital, which will enhance its acquisition capabilities [52][53] Additional Important Insights - **Demographics of Property Owners**: Many current property owners are older individuals who may not negotiate effectively, providing an opportunity for the company to acquire properties at favorable terms [32][34] - **Flexibility in Property Use**: The properties can be converted for various uses, such as medical offices or retail, which adds to their value [24][68] - **Operational Efficiencies**: The company has focused on finding efficiencies in property operations, contributing to its earnings growth [18][41] - **Long-Term Vision**: The CEO emphasizes a long-term strategy focused on sustainable growth rather than short-term monetization [15][62] This summary encapsulates the key points discussed during the conference call, highlighting the company's strategic positioning, growth potential, and operational efficiencies within the postal real estate market.