Core Insights - Postal Realty Trust, Inc. has made significant acquisitions and leasing progress, maintaining a strong relationship with the USPS despite external challenges [4][6]. Acquisitions - In 2024, the Company acquired 197 properties leased to the USPS for approximately $91 million, totaling about 571,000 net leasable square feet at a weighted average capitalization rate of 7.6% [2][5]. - During the fourth quarter of 2024, the Company acquired 63 properties for approximately $30.7 million, comprising about 176,000 net leasable square feet at a capitalization rate of 7.5% [5]. Leasing Activity - As of December 31, 2024, the Company executed 88 new leases representing 85% of the aggregate 2023 expired rent and 118 new leases representing 95% of the aggregate 2024 expired rent [3]. - 9% of the leases in the portfolio are ten-year leases, and 27% include annual rent escalations of 3% [3][4]. Portfolio and Occupancy - The Company's portfolio was 99.6% occupied, consisting of 1,703 properties across 49 states and one territory, with approximately 6.4 million net leasable square feet [6]. - The weighted average rental rate was $10.60 per occupied leasable square foot, with $12.81 for last-mile and flex properties and $3.83 for industrial properties [6]. Financial Position - At the end of 2024, 95% of the Company's debt was at fixed rates, with a total debt weighted average interest rate of 4.35% [8]. - The Company drew $10 million on a term loan, fixing the interest rate at 5.55% through February 2028 [7]. Shareholder Activity - The Company issued 185,445 shares of common stock at an average gross sales price of $14.57 per share during the quarter [9]. - As of December 31, 2024, there were 29,924,517 fully diluted shares outstanding [10].

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]

| --- | --- | --- | --- | |-------|-------|-------|-------| | | | | | | | | | | 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]

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 ...

Exhibit 99.1 - 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, New York, November 4, 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 fro ...