Postal Realty Trust, Inc. · NYSE:PSTL
Postal Realty Trust — Q2 2024 Earnings Presentation
22 slides from Postal Realty Trust's earnings presentation, Aug 6, 2024
Slide 1: Investing in America's Logistics Network
INVESTING IN AMERICA’S LOGISTICS NETWORK August 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: 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: Long-Term Investment Proposition: Attractive Return Profile
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 Acquired properties in o 99% weighted o Attractive dividend o Cash G&A as a 2024 YTD at 7.6%
Slide 5: Diversified Real Estate Portfolio
PORTFOLIO DIVERSIFIED REAL ESTATE PORTFOLIO 15% 27% ANNUALIZED GROSS RENT1 35% 23% MIDWEST NORTHEAST SOUTH WEST 1,616 6.2MM 49 Properties Owned Interior Sq. Ft. States2 99.6% 35MM+ ~3 YEARS Occupancy Site Sq. Ft. Weighted Average Lease Term3 Note: Figures as of July 29, 2024, for PSTL’s owned portfo
Slide 6: Highly Fragmented Market, Ripe for Consolidation
MARKET OPPORTUNITY 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 6.2MM 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 daily GROWN, THE USPS’ o USPS’s unmatched logistics network has high barriers to entry
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% 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
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 2024 156(2) 1,002,081 $7,840,673 13.0% 2025 241 659,722 7,688,232 12.8% 2026 321 1,146,226 11,462,346 19.1% 2027 440 1,407,988 14,673,793 24.4% 2028 169
Slide 12: Meaningful Growth Since IPO
ATTRACTIVE RETURN PROFILE MEANINGFUL GROWTH SINCE IPO Annual Acquisitions ($ in millions)(1) Cumulative Acquisitions ($ in millions)(1) $130 $118 $123 $587 $537 $47 $30 $459 $87 $78 $336 $67 $56 $50 $218 $65 $37 $88 $36 $18 $21 $22 $13 FY'20 FY'21 FY'22 FY'23 2024 YTD 2019 Post IPO FY'20 FY'21 FY'22
Slide 13: Well Capitalized Balance Sheet
CONSERVATIVE BALANCE SHEET WELL CAPITALIZED BALANCE SHEET $39.0MM DEBT MATURITY SCHEDULE $125.0MM $200.0MM TOTAL $75.0MM CAPITALIZATION $707.0MM $32.9MM Limited Near-term Debt Maturities $39.0MM $435.1MM $32.8MM $0.1MM 2024 2025 2026 2027 2028 Thereafter Unsecured Term Loans Other Debt Market Value
Slide 14: 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 15: 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 16: Appendix
APPENDIX 17
Slide 17: Acquisition Summary – Right of First Offer Portfolio
EXTERNAL GROWTH ACQUISITION SUMMARY – RIGHT OF FIRST OFFER PORTFOLIO INVESTMENT HIGHLIGHTS • High-quality, fully occupied portfolio consisting of 28 Last- Mile & 8 Flex facilities • Well-maintained properties with limited deferred maintenance • PSTL (and predecessor entities) have been managing the
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 1,025 1.4MM $15.7MM $11.24 FLEX2 PROPERTIES 2,500 - 50,000 INTERIOR SQUARE FEET Property Count Interior Sq. Ft. Annualized Base Rent
Slide 19: Last-Mile
APPENDIX LAST-MILE CRYSTAL BEACH, FL MASCOT, TN o Acquired as part of a portfolio, the post office o Located outside of Knoxville, TN, this post office serves a growing community on the west coast services a fast-growing community of over 3,000 of Florida residents o This 1,500 sq. ft. well-utilized
Slide 20: Flex
APPENDIX FLEX LEE, MA OLD SAYBROOK, CT o This 4,000 sq. ft. facility services a distinct o Located in a historical coastal town, this post office community of over 5,700 residents services a growing community of over 8,000 residents o The post office has 13 employees, six routes, o This ~7,700 sq. f
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 located approximately along mixed-use corridor 14 miles from the Pittsburgh Internat
Slide 22: 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,”