Postal Realty Trust, Inc. · NYSE:PSTL
Postal Realty Trust — Investor Presentation (March 2023)
26 slides from Postal Realty Trust's investor presentation, Mar 1, 2023
Slide 1: Investing in America's Logistics Network
INVESTING IN AMERICA’S LOGISTICS NETWORK MARCH 1, 2023
Slide 2: Only publicly traded REIT focused on properties leased to the USPS
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 Current deal flow o 99% weighted o Attractive o Cash G&A as a within 6% - 8% average lease d
Slide 5: Diversified Real Estate Portfolio
PORTFOLIO DIVERSIFIED REAL ESTATE PORTFOLIO 13% 28% ANNUALIZED GROSS RENT1 35% 24% MIDWEST NORTHEAST SOUTH WEST 1,307 5.4MM 49 Properties Owned Interior Sq. Ft. States2 99.7% 30.1MM ~3 YEARS Occupancy Site Sq. Ft. Weighted Average Lease Term3 Note: Figures as of February 21, 2023, for PSTL’s owned p
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 5.4MM 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
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 include real ✓ Tenant res
Slide 10: Stable Credit Tenant with Consistently High Retention
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 operating expenses in
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 177 902,908 $7,636,000 15.8% (2) 2024 97 541,889 $5,188,086 10.7% 2025 199 601,063 $7,175,678 14.9% 2026 259 1,009,849 $9,563,367 19.8% 2027 306 98
Slide 12: Meaningful Growth Since IPO
ATTRACTIVE RETURN PROFILE MEANINGFUL GROWTH SINCE IPO Annual Acquisitions ($ in millions)(1) Cumulative Acquisitions ($ in millions)(1) $130 $459 $118 $123 $47 $30 $335 $88 $218 $65 $67 $88 $35 $18 $21 FY'20 FY'21 FY'22 2019 Post IPO FY'20 FY'21 FY'22 Last-Mile Flex Industrial AFFO ($ in thousands)
Slide 13: Total Capitalization
CAPITAL STRUCTURE TOTAL CAPITALIZATION $12 Total Capitalization Revolver o 91% of assets are unencumbered $578MM Unsecured by secured debt(2) bank o 94% of all debt currently fixed rate $165 Term Loans facilities o Unsecured credit facilities Total Debt comprising: $210MM • $150MM revolving credit $
Slide 14: Low Leverage
CONSERVATIVE BALANCE SHEET LOW LEVERAGE TARGETS: BELOW 40% NET DEBT TO ENTERPRISE VALUE BELOW 7.0x NET DEBT TO ANNUALIZED ADJUSTED EBITDA Net Debt to Enterprise Value Net Debt to Annualized Adjusted EBITDA 12.0x 50.0% 45.0% 10.0x 40.0% 34.6% 35.7% 33.0% 35.0% 8.0x 30.0% 6.0x 23.0% 25.0% 16.7% 5.5x 2
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 823 1.1MM $12.0MM $10.68 FLEX2 PROPERTIES 2,500 - 50,000 INTERIOR SQUARE FEET Property Count Interior Sq. Ft. Annualized Base Rent An
Slide 19: Select Last-Mile
APPENDIX SELECT LAST-MILE STOCKBRIDGE, MA WILMORE, KY o Facility located in historical New England town o ~2,200 sq. ft. facility with 5 mail delivery routes and is a tourist attraction in the region o Facility provides passport service o ~2,200 sq. ft. facility that has over 1,000 P.O. boxes rented
Slide 20: Select Flex
APPENDIX SELECT FLEX GRAND ISLAND, FL FABENS, TX o ~2,800 sq. ft. facility, located outside Orlando, o ~8,300 sq. ft. facility located near the U.S. – Mexico FL border o Purchased as part of a 10-property portfolio o Purchased from a long-time owner of postal from a long-time owner of postal propert
Slide 21: Select Industrial
APPENDIX SELECT INDUSTRIAL WARRENDALE, PA MILWAUKEE, WI o One of only 12 privately-owned processing & o ~575,000 sq. ft. USPS logistics hub with distribution centers sized over 300,000 sq. ft. in strategic location in Downtown Milwaukee the United States along mixed-use corridor o Modern logistic fa
Slide 22: Board and Executive Team Well-Aligned with Shareholders' Interest
APPENDIX BOARD AND EXECUTIVE TEAM WELL-ALIGNED WITH SHAREHOLDERS’ INTEREST ~14% 100% of the outstanding equity interest in Postal Realty Trust owned by management of C-Suite incentive compensation elected to be received in restricted and board stock or LTIP units 23
Slide 23: Disclaimer and Forward-Looking Statements
APPENDIX DISCLAIMER AND FORWARD-LOOKING STATEMENTS This presentation regarding Postal Realty Trust, Inc. (the “Company”) contains “forward-looking statements.” Forward-looking statements include statements identified by words such as “could,” “may,” “might,” “will,” “likely,” “anticipates,” “intends
Slide 24: Debt Statistics
APPENDIX DEBT STATISTICS Debt Statistics ($ in thousands) Q4 2022 Q3 2022 Q2 2022 Q1 2022 Q4 2021 Market Capitalization Debt Principal $198,093 $189,097 $176,101 $123,105 $96,193 Cash 1,495 4,570 4,569 5,958 5,857 Escrow & Reserves 446 283 1,272 1,261 1,077 Net Debt 196,152 184,244 170,260 115,886 8
Slide 25: Adjusted EBITDA Reconciliation
APPENDIX ADJUSTED EBITDA RECONCILIATION EBITDA ($ in thousands) Q4 2022 Q3 2022 Q2 2022 Q1 2022 Q4 2021 Net income $1,708 $1,150 $1,165 $721 $933 Contractual interest expense 1,913 1,670 1,111 686 739 Write-off and amortization of deferred financing fees 156 156 155 129 129 Income tax (benefit) expe
Slide 26: Definitions
APPENDIX DEFINITIONS Earnings before Interest Tax and Depreciation and Amortization (EBITDA) and Adjusted EBITDA The Company computes EBITDA as earnings before interest, income taxes, depreciation and amortization. The Company presents EBITDA as it is a measure commonly used in its industry and the
Postal Realty Trust — Investor Presentation (March 2023) on 6ix