Postal Realty Trust, Inc. · NYSE:PSTL
Postal Realty Trust — Q2 2023 Earnings Presentation
23 slides from Postal Realty Trust's earnings presentation, Aug 9, 2023
Slide 1: Investing in America's Logistics Network
INVESTING IN AMERICA’S LOGISTICS NETWORK AUGUST 8, 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 at 7.6% weighted ave
Slide 5: Diversified Real Estate Portfolio
PORTFOLIO DIVERSIFIED REAL ESTATE PORTFOLIO 13% 28% ANNUALIZED GROSS RENT1 36% 23% MIDWEST NORTHEAST SOUTH WEST 1,375 5.6MM 49 Properties Owned Interior Sq. Ft. States2 99.7% 31MM+ ~3 YEARS Occupancy Site Sq. Ft. Weighted Average Lease Term3 Note: Figures as of August 2, 2023, for PSTL’s owned portf
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 5.6MM 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 162(2) 865,107 $7,419,431 14.5% 2024 96 539,973 $5,143,138 10.1% 2025 202 595,582 $7,036,961 13.8% 2026 275 1,066,691 $10,266,239 20.1% 2027 333 1,
Slide 12: Meaningful Growth Since IPO
ATTRACTIVE RETURN PROFILE MEANINGFUL GROWTH SINCE IPO Annual Acquisitions ($ in millions)(1) Cumulative Acquisitions ($ in millions)(1) $130 $123 $118 $497 $459 $47 $30 $335 $88 $218 $65 $67 $38 $32 $88 $35 $18 $21 $6 FY'20 FY'21 FY'22 2023 YTD 2019 Post IPO FY'20 FY'21 FY'22 2023 YTD Last-Mile Flex
Slide 13: Total Capitalization
CAPITAL STRUCTURE TOTAL CAPITALIZATION o Debt outstanding currently 100% fixed rate Total Capitalization $606MM o No notable debt maturities until 2027 Unsecured o 91% of assets are unencumbered by $190MM Term Loans bank secured debt(2) facility Total Debt o Unsecured credit facilities comprising: $
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 37.7% 35.9% 40.0% 34.6% 35.7% 33.0% 35.0% 8.0x 30.0% 6.0x 25.0% 5.6x 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 864 1.2MM $12.6MM $10.70 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 CHATEAUGAY, NY FAIRFAX, MO o Located just five miles from the U.S. – Canada o ~2,100 sq. ft. facility providing delivery routes to border, the surrounding area is known for the a tight-knit community natural beauty of its falls and lakes o Purchased as part of a portfolio from a l
Slide 20: Flex
APPENDIX FLEX PLATTE, SD BLAKESLEE, PA o Acquired as part of a six-property portfolio o Located in the Poconos, this full-time post office is from a long-time partnership, the properties minutes away from the resorts on Lake Harmony were all built in the 1990s o Residents rent a PO box in lieu of re
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,”