Postal Realty Trust, Inc. · NYSE:PSTL
Postal Realty Trust — Q3 2024 Earnings Presentation
21 slides from Postal Realty Trust's earnings presentation, Nov 5, 2024
Slide 1: Investing in America's Logistics Network
INVESTING IN AMERICA’S LOGISTICS NETWORK November 2024
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: Reasons to Invest
REASONS TO INVEST Attractive returns driven by annual organic NOI growth and strategic acquisitions Consistent dividend with annual increases demonstrating financial stability and strong cash flow Singularly positioned to consolidate and institutionalize large fragmented market Strong federal govern
Slide 4: Attractive Return Profile – Based on Proven Results
ATTRACTIVE RETURN PROFILE – BASED ON PROVEN RESULTS Margin Expansion Organic Accretive Dividend Yield & Potential; Growing NOI Growth Acquisitions Dividend Growth Liquidity o Same-store cash NOI o Uniquely positioned o Attractive dividend o Post acquisition, PSTL growth greater than to consolidate a
Slide 5: Lease Benefits from Duration Mix, Driving Annual NOI Growth
LEASE BENEFITS FROM DURATION MIX, DRIVING ANNUAL NOI GROWTH Lease Expirations (By % of Annualized Rent) Over 50% of current leases 23.5% expire over next 3 years ✓ 21% of portfolio now includes annual rent 17.7% 18.8% escalations of which the majority are 3.0% 13.1% 12.2% ✓ Lease duration is a mix o
Slide 6: Diversified Real Estate Portfolio
DIVERSIFIED REAL ESTATE PORTFOLIO $13.9MM ABR 22% of total 15% 27% $9.4MM ABR $17.6MM ABR 27% of total 15% of total ANNUALIZED GROSS RENT1 $23.0MM ABR 36% 36% of total 22% MIDWEST NORTHEAST SOUTH WEST 1,653 6.3MM 49 Properties Owned Interior Sq. Ft. States2 99.6% 36MM+ ~3 YEARS Occupancy Site Sq. Ft
Slide 7: Highly Fragmented Market, Ripe for Consolidation
HIGHLY FRAGMENTED MARKET, RIPE FOR CONSOLIDATION PRIVATELY OWNED o PSTL’s portfolio represents ~7% of 92MM SQUARE FEET the leased market1 o Nearly 17,000 different lessors of properties leased to the USPS OWNED BY PSTL 6.3MM SQUARE FEET o Next top 20 largest portfolio owners combined only own ~11% o
Slide 8: Opportunity to Gain Considerable Market Share
OPPORTUNITY TO GAIN CONSIDERABLE MARKET SHARE Long-standing relationships within the industry Reputation—active buyers for 30 years, well-known as the largest owner and a trusted resource1 Experienced in-house acquisitions team generating off-market transactions LAST-MILE2 FLEX3 INDUSTRIAL 24% < 2,5
Slide 9: USPS's Irreplaceable Logistics Network
USPS’S IRREPLACEABLE LOGISTICS NETWORK CRITICAL INFRASTRUCTURE SUPPORTS E-COMMERCE AND LAST-MILE DELIVERY o Amazon, UPS, FedEx, and DHL all tap into the USPS’s logistics AS E-COMMERCE HAS network daily GROWN, THE USPS’ o USPS’s unmatched logistics network has high barriers to entry due to the time a
Slide 10: Stable Credit Tenant with Consistently High Retention
STABLE CREDIT TENANT WITH CONSISTENTLY HIGH RETENTION 99% 100% 100% 100% 100% 100% 99% 99% 99% 98% 98% Historical Weighted Average Lease Retention Rate1 96% Federal government-supported credit USPS operating lease payments represented only 1.5% of the USPS’s total operating expenses in fiscal year 2
Slide 11: Meaningful Growth Since IPO
MEANINGFUL GROWTH SINCE IPO Annual Acquisitions ($ in millions)(1) Cumulative Acquisitions ($ in millions)(1) $130 $118 $123 $601 $537 $47 $30 $459 $87 $78 $64 $336 $65 $67 $56 $218 $47 $88 $36 $18 $21 $22 $17 FY'20 FY'21 FY'22 FY'23 2024 YTD 2019 Post IPO FY'20 FY'21 FY'22 FY'23 2024 YTD Last-Mile
Slide 12: Well Capitalized Balance Sheet
WELL CAPITALIZED BALANCE SHEET $7.0MM DEBT MATURITY SCHEDULE $165.0MM $240.0MM TOTAL CAPITALIZATION $75.0MM $427.5MM $708.8MM Limited Near-term Debt Maturities $34.3MM $34.2MM $7.0MM $0.1MM 2024 2025 2026 2027 2028 Thereafter Unsecured Term Loans Other Debt Market Value of Equity 1 Unsecured Revolvi
Slide 13: Decades of Experience and Institutional Knowledge
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 Garber Presid
Slide 14: Committed to Corporate Responsibility and Sustainable Business Practices
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, health and development in the by former
Slide 15: Appendix
APPENDIX 16
Slide 16: Portfolio by Asset Class
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 1,048 1.4MM $17.0MM $11.87 FLEX2 PROPERTIES 2,500 - 50,000 INTERIOR SQUARE FEET Property Count Interior Sq. Ft. Annualized Base Rent Annualize
Slide 17: Lease Expirations Provide Opportunity to Drive NOI Growth
LEASE EXPIRATIONS PROVIDE OPPORTUNITY TO DRIVE NOI GROWTH YEAR NUMBER OF LEASES SQUARE FEET ANNUAL RENT1 % OF TOTAL RENT1 2024 24(2) 550,599 $2,978,052 4.7% 2025 245 675,670 7,788,611 12.2% 2026 324 1,149,674 11,320,333 17.7% 2027 449 1,431,635 15,041,006 23.5% 2028 198 565,121 8,364,104 13.1% 2029
Slide 18: Last-Mile
LAST-MILE MOKELUMNE HILL, CA MORRISVILLE, NY o Located southeast of Sacramento, this facility o Acquired from a long-term portfolio owner, this serves a distinct community of over 800 post office serves a growing community near residents Syracuse with over 2,000 residents o This 1,600 sq. ft. facili
Slide 19: Flex
FLEX LOS ALAMOS , NM – WHITE ROCK ANNEX BROOKSVILLE, FL – AVIATION BRANCH o This facility serves the city and community built o Located in a high-barrier-to-enter industrial cluster right around the Los Alamos National Laboratory, outside the Brooksville – Tampa Bay Regional Airport. best known for
Slide 20: Industrial
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 located approximately along mixed-use corridor 14 miles from the Pittsburgh International o S
Slide 21: Disclaimer and Definitions
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,” “expects