Postal Realty Trust, Inc. · NYSE:PSTL
Postal Realty Trust — Q3 2023 Earnings Presentation
23 slides from Postal Realty Trust's earnings presentation, Oct 31, 2023
Slide 1: Investing in America's Logistics Network
INVESTING IN AMERICA’S LOGISTICS NETWORK October 2023
Slide 2: Only publicly traded REIT focused on USPS-leased properties
AS THE ONLY PUBLICLY TRADED REAL ESTATE INVESTMENT TRUST FOCUSED ON PROPERTIES LEASED TO THE USPS, POSTAL REALTY TRUST (NYSE: PSTL) IS AT THE INTERSECTION OF REAL ESTATE AND CRITICAL LOGISTICS INFRASTRUCTURE. PSTL HAS THE SCALE, INDUSTRY KNOWLEDGE AND SEASONED TEAM TO CONSOLIDATE THIS HIGHLY FRAGMEN
Slide 3: PSTL Investment Overview: Reasons to Invest
PSTL INVESTMENT OVERVIEW REASONS TO INVEST Singularly positioned to consolidate and institutionalize large fragmented market Critical logistics infrastructure supporting e-commerce and last-mile delivery Strong federal government-supported credit tenant with high retention rate Attractive returns ge
Slide 4: Attractive Return Profile – Based on Proven Results
LONG-TERM INVESTMENT PROPOSITION ATTRACTIVE RETURN PROFILE – BASED ON PROVEN RESULTS Margin Expansion Accretive Organic Dividend Yield & Potential; Growing Acquisitions NOI Growth Dividend Growth Liquidity o 2023 YTD deal flow o 99% weighted o Attractive dividend o Cash G&A as a above 7.5% weighted
Slide 5: Diversified Real Estate Portfolio
PORTFOLIO DIVERSIFIED REAL ESTATE PORTFOLIO 14% 28% ANNUALIZED GROSS RENT1 35% 23% MIDWEST NORTHEAST SOUTH WEST 1,439 5.7MM 49 Properties Owned Interior Sq. Ft. States2 99.7% 32MM+ ~3 YEARS Occupancy Site Sq. Ft. Weighted Average Lease Term3 Note: Figures as of October 20, 2023, for PSTL’s owned por
Slide 6: Highly Fragmented Market, Ripe for Consolidation
MARKET OPPORTUNITY HIGHLY FRAGMENTED MARKET, RIPE FOR CONSOLIDATION PRIVATELY OWNED o PSTL’s portfolio represents ~6% 92MM SQUARE FEET of the leased market1 o Nearly 17,000 different lessors of properties leased to the USPS OWNED BY PSTL 5.7MM SQUARE FEET o Next top 20 largest portfolio owners combi
Slide 7: Opportunity to Gain Considerable Market Share
MARKET OPPORTUNITY OPPORTUNITY TO GAIN CONSIDERABLE MARKET SHARE Long-standing relationships within the industry Reputation—active buyers for 30 years, well-known as the largest owner and a trusted resource1 Experienced in-house acquisitions team generating off-market transactions LAST-MILE2 FLEX3 I
Slide 8: USPS's Irreplaceable Logistics Network
LOGISTICS NETWORK USPS’S IRREPLACEABLE LOGISTICS NETWORK CRITICAL INFRASTRUCTURE SUPPORTS E-COMMERCE AND LAST-MILE DELIVERY o Amazon, UPS, FedEx, and DHL all tap into the USPS’s logistics AS E-COMMERCE HAS network every day GROWN, THE USPS’ o USPS’s unmatched logistics network has high barriers to e
Slide 9: Favorable Lease Structure
GOVERNMENT-SUPPORTED CREDIT TENANT FAVORABLE LEASE STRUCTURE LEASE STRUCTURE: INFLATION PROTECTIONS: ✓ Most commonly five years in duration ✓ Lease duration allows the continual opportunity for renewals at market rents ✓ Various forms of modified double net leases (typical USPS responsibilities incl
Slide 10: Stable Credit Tenant with Consistently High Retention
GOVERNMENT-SUPPORTED CREDIT TENANT STABLE CREDIT TENANT WITH CONSISTENTLY HIGH RETENTION 99% 100% 100% 100% 100% 99% 99% 99% 98% 98% Historical Weighted Average Lease Retention Rate1 97% 96% Federal government-supported credit USPS operating lease payments represented only 1.7% of the USPS’s total o
Slide 11: Lease Expirations Provide Opportunity to Drive NOI Growth
ATTRACTIVE RETURN PROFILE LEASE EXPIRATIONS PROVIDE OPPORTUNITY TO DRIVE NOI GROWTH YEAR NUMBER OF LEASES SQUARE FEET ANNUAL RENT1 % OF TOTAL RENT1 2023 88 619,182 $4,077,999 7.7% 2024 102 569,571 $5,582,668 10.5% 2025 208 600,476 $7,136,054 13.4% 2026 284 1,077,539 $10,392,619 19.6% 2027 423 1,351,
Slide 12: Meaningful Growth Since IPO
ATTRACTIVE RETURN PROFILE MEANINGFUL GROWTH SINCE IPO Annual Acquisitions ($ in millions)(1) Cumulative Acquisitions ($ in millions)(1) $130 $123 $118 $517 $459 $47 $30 $335 $88 $58 $218 $65 $67 $44 $88 $35 $18 $21 $14 FY'20 FY'21 FY'22 2023 YTD 2019 Post IPO FY'20 FY'21 FY'22 2023 YTD Last-Mile Fle
Slide 13: Total Capitalization
CAPITAL STRUCTURE TOTAL CAPITALIZATION Total Capitalization o Debt outstanding currently 100% $590MM Unsecured fixed rate $200MM Term Loans bank o No notable debt maturities until 2027 facility o 92% of assets are unencumbered by Total Debt secured debt(2) $233MM $33MM Other Debt o Unsecured credit
Slide 14: Low Leverage
CONSERVATIVE BALANCE SHEET LOW LEVERAGE TARGET: BELOW 7.0x NET DEBT TO ANNUALIZED ADJUSTED EBITDA 5.6x 5.5x 5.5x 5.3x 5.1x Q3 2022 Q4 2022 Q1 2023 Q2 2023 Q3 2023 Net Debt to Annualized Adjusted EBITDA Source: Company Filings. The calculations and reconciliations of the non-GAAP financial measures a
Slide 15: Decades of Experience and Institutional Knowledge
LEADERSHIP DECADES OF EXPERIENCE AND INSTITUTIONAL KNOWLEDGE Andrew Spodek Chief Executive Officer o Founder and CEO o More than 20 years of experience focused on investing in and managing USPS properties o Serves on the board of directors of the Association of United States Postal Lessors Jeremy Ga
Slide 16: Committed to Corporate Responsibility and Sustainable Business Practices
ENVIRONMENTAL, SOCIAL & GOVERNANCE (ESG) COMMITTED TO CORPORATE RESPONSIBILITY AND SUSTAINABLE BUSINESS PRACTICES ENVIRONMENTAL SOCIAL GOVERNANCE o Multi-disciplinary ESG committee, o Focused on ensuring PSTL employee o Independent Board of Directors led including several senior executives, welfare,
Slide 17: Appendix
APPENDIX 18
Slide 18: Portfolio by Asset Class
APPENDIX PORTFOLIO BY ASSET CLASS LAST-MILE1 PROPERTIES UNDER 2,500 INTERIOR SQUARE FEET Property Count Interior Sq. Ft. Annualized Base Rent Annualized Base Rent PSF 906 1.2MM $13.4MM $10.79 FLEX2 PROPERTIES 2,500 - 50,000 INTERIOR SQUARE FEET Property Count Interior Sq. Ft. Annualized Base Rent An
Slide 19: Last-Mile
APPENDIX LAST-MILE ODESSA, DE KROTZ SPRINGS, LA o The town of Odessa is on the National Register o Located in St. Landry Parish on the banks of the of Historic Places, the colonial townscape Atchafalaya River, known for its artesian spring dates back to the 1660s and attracts history water and archi
Slide 20: Flex
APPENDIX FLEX LOGAN, UT BEND, OR o Acquired as part of a portfolio o Bend ranks 6th on the list of fastest growing cities in o The post office is just 2.5 miles northwest of the U.S. The population is projected to increase by Utah State University where over 28,000 nearly 50,000 by 2040 students are
Slide 21: Industrial
APPENDIX INDUSTRIAL WARRENDALE, PA MILWAUKEE, WI o Over 300,000 sq. ft. processing & distribution o ~575,000 sq. ft. USPS logistics hub with center strategic location in Downtown Milwaukee o Modern logistic facility approximately 14 miles along mixed-use corridor from the Pittsburgh International Ai
Slide 22: Board and Executive Team Well-Aligned with Shareholders' Interest
APPENDIX BOARD AND EXECUTIVE TEAM WELL-ALIGNED WITH SHAREHOLDERS’ INTEREST ~13% 100% of the outstanding equity interest in Postal Realty Trust owned by management of C-Suite incentive compensation elected to be received in restricted and board stock or LTIP units 23
Slide 23: Disclaimer and Definitions
APPENDIX DISCLAIMER AND DEFINITIONS This presentation regarding the Company contains “forward-looking statements.” Forward-looking statements include statements identified by words such as “could,” “may,” “might,” “will,” “likely,” “anticipates,” “intends,” “plans,” “seeks,” “believes,” “estimates,”