0001759774False00017597742024-02-262024-02-26

 
UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
 
FORM 8-K
 
CURRENT REPORT
 
PURSUANT TO SECTION 13 OR 15(d)
OF THE SECURITIES EXCHANGE ACT OF 1934

Date of Report (Date of earliest event reported): February 26, 2024
 
POSTAL REALTY TRUST, INC.
(Exact name of registrant as specified in its charter)
 
Maryland001-38903 83-2586114
(State or other jurisdiction of Incorporation or organization)Commission File Number (I.R.S. Employer Identification No.)
75 Columbia Avenue
Cedarhurst, NY 11516
(Address of principal executive offices and zip code)
(516) 295-7820
(Registrant’s telephone number)
Not Applicable
(Former Name or Former Address, if Changed Since Last Report)
Check the appropriate box below if the Form 8-K filing is intended to simultaneously satisfy the filing obligation of the registrant under any of the following provisions (see General Instruction A.2. below):
 
Written communications pursuant to Rule 425 under the Securities Act (17 CFR 230.425)
Soliciting material pursuant to Rule 14a-I2 under the Exchange Act (17 CFR 240.14a-12)
Pre-commencement communications pursuant to Rule 14d-2(b) under the Exchange Act (17 CFR 240.I4d-2(b))
Pre-commencement communications pursuant to Rule 13e-4(c) under the Exchange Act (17 CFR 240.13e-4(c))
Securities registered pursuant to Section 12(b) of the Act:
Title of each class Trading Symbol(s) Name of each exchange on which registered
Class A Common Stock, par value $0.01 per share PSTL New York Stock Exchange
Indicate by check mark whether the registrant is an emerging growth company as defined in Rule 405 of the Securities Act of 1933 (§230.405 of this chapter) or Rule 12b-2 of the Securities Exchange Act of 1934 (§240.12b-2 of this chapter).
Emerging growth company

If an emerging growth company, indicate by check mark if the registrant has elected not to use the extended transition period for complying with any new or revised financial accounting standards provided pursuant to Section 13(a) of the Exchange Act.



Item 2.02. Results of Operations and Financial Condition.

Postal Realty Trust, Inc. (the “Company”) issued a press release on February 26, 2024 announcing its financial results for the year ended December 31, 2023. A copy of the press release is furnished herewith and attached hereto as Exhibit 99.1.

The information in this Item 2.02 and Exhibit 99.1 attached hereto shall not be deemed “filed” for purposes of Section 18 of the Securities Exchange Act of 1934, as amended (the “Exchange Act”), or otherwise subject to the liabilities of that section and shall not be deemed incorporated by reference in any filing made by the Company under the Securities Act of 1933, as amended, or the Exchange Act except as set forth by specific reference in such filing.

Item 9.01. Financial Statements and Exhibits.
 
(d)Exhibits.
Exhibit No. Document
99.1
104 Cover Page Interactive Data File (embedded within the Inline XBRL document)



SIGNATURE
 
Pursuant to the requirements of the Securities Exchange Act of 1934, the registrant has duly caused this report to be signed on its behalf by the undersigned hereunto duly authorized.
 
Date: February 26, 2024
 
 POSTAL REALTY TRUST, INC.
   
 By:/s/ Jeremy Garber
  Name: Jeremy Garber
  Title: President and Treasurer

image.jpg
Exhibit 99.1

POSTAL REALTY TRUST, INC. REPORTS FOURTH QUARTER AND YEAR END 2023 RESULTS

- Acquired 75 USPS Properties for $20.7 Million in Fourth Quarter 2023 -
- Net Income Attributable to Common Shareholders of $0.12 and Adjusted Funds from Operations of $1.07 Per Diluted Share for the Year Ended 2023 -
- Raised Dividend Per Share for Fifth Consecutive Year -
- Collected 100% of Contractual Rents -
Cedarhurst, New York, February 26, 2024 (GLOBE NEWSWIRE) — Postal Realty Trust, Inc. (NYSE: PSTL) (the “Company”), an internally managed real estate investment trust that owns and manages over 1,900 properties leased primarily to the United States Postal Service (the “USPS”), ranging from last-mile post offices to industrial facilities, today announced results for the quarter and year ended December 31, 2023.

Highlights for the Quarter Ended December 31, 2023

Acquired 75 USPS properties for approximately $20.7 million, excluding closing costs
Net income attributable to common shareholders was $1.2 million, or $0.04 per diluted share
Funds from Operations ("FFO") was $6.6 million, or $0.24 per diluted share
Adjusted Funds from Operations ("AFFO") was $7.0 million, or $0.26 per diluted share
Subsequent to quarter end, the Company raised the quarterly dividend to $0.24 per share, a 1.1% increase over the fourth quarter 2022 dividend

Highlights for the Year Ended December 31, 2023

Acquired 223 properties for approximately $78 million in 2023, excluding closing costs
Rental income increased 20% from 2022 to 2023, reflecting internal growth and properties acquired
Net income attributable to common shareholders was $3.7 million, or $0.12 per diluted share
FFO was $24.2 million, or $0.95 per diluted share
AFFO was $27.3 million, or $1.07 per diluted share
Paid aggregate dividends of $0.95 per share for calendar year 2023
Amended credit facilities to, among other things, add a daily simple SOFR-based option as a benchmark rate
Exercised $35.0 million of term loan accordion and entered into corresponding interest rate swaps
Achieved sustainability target in 2023 to decrease the applicable margin on the credit facilities by 0.02% for 2024

“2023 was another solid year for Postal Realty, as we added 223 properties to our portfolio and increased our weighted average cap rate close to 100 basis points compared to 2022," stated Andrew Spodek, Chief Executive Officer. "In 2024, we will continue to be prudent with our deployment of capital given the volatile interest rate environment. We are positioned well
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heading into the year with high portfolio occupancy and tenant retention, a solid balance sheet with no significant near-term debt maturities and 96% of our debt set to fixed rates."

Property Portfolio & Acquisitions

The Company’s owned portfolio was 99.7% occupied, comprised of 1,509 properties across 49 states and one territory with approximately 5.9 million net leasable interior square feet and a weighted average rental rate of $9.37 per leasable square foot based on rents in place as of December 31, 2023. The weighted average rental rate consisted of $11.52 per leasable square foot on last-mile and flex properties and $3.55 on industrial properties.

During the fourth quarter, the Company acquired 75 last-mile and flex properties leased to the USPS for approximately $20.7 million, excluding closing costs, comprising approximately 153,000 net leasable interior square feet at a weighted average rental rate of $12.27 per leasable square foot based on rents in place as of December 31, 2023.

Balance Sheet & Capital Markets Activity

As of December 31, 2023, the Company had approximately $2.8 million of cash and property-related reserves, and approximately $239 million of net debt with a weighted average interest rate of 4.14%. At the end of the fourth quarter, 96% of the Company's debt outstanding was set to fixed rates (when taking into account interest rate hedges), and the Company's $150 million revolving credit facility had $141 million undrawn.

As previously disclosed, on July 24, 2023, the Company amended its credit facilities to, among other things, add a daily simple SOFR-based option as a benchmark rate. The Company further exercised $25.0 million of term loan accordion under the term loan maturing in January 2027 and, on a delayed-draw basis, $10.0 million of term loan accordion under the term loan maturing in February 2028. In connection with the accordion exercise, the Company also entered into an interest rate swap that effectively fixed the interest rate on the $25.0 million of term loan through January 2027 at a current rate of 5.736%. On September 27, 2023, the Company fixed the interest rate on the $10.0 million of term loan through February 2028 at a current rate of 6.049%.

During the year, the Company issued through its at-the-market offering program 1,861,407 shares of common stock at an average gross sales price of $14.94 per share. In 2023, the Company entered into its first forward sales transactions and, as of December 31, 2023, all shares from the transactions had been settled. In addition, the Company issued 693,648 common units in its operating partnership at an average price of $13.87 per unit during the year as part of consideration for property acquisitions.

Dividend

On February 2, 2024, the Company declared a quarterly dividend of $0.24 per share of Class A common stock. The dividend equates to $0.96 per share on an annualized basis. The dividend will be paid on February 29, 2024 to stockholders of record as of the close of business on February 16, 2024.
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Subsequent Events

Subsequent to quarter end and through February 23, 2024, the Company acquired eight properties comprising approximately 33,000 net leasable interior square feet for approximately $4.5 million, excluding closing costs. The Company had another 20 properties totaling approximately $13.9 million under definitive contracts.

During the same period, the Company issued 483,341 shares of common stock through its at-the-market equity offering program for total gross proceeds of approximately $6.9 million at an average gross price of $14.26 per share.

Webcast and Conference Call Details

The Company will host a webcast and conference call to discuss the fourth quarter 2023 financial results on Tuesday, February 27, 2024, at 9:00 A.M. Eastern Time. A live audio webcast of the conference call will be available on the Company’s investor website at https://investor.postalrealtytrust.com/Investors/events-and-presentations/default.aspx. To participate in the conference call, callers from the United States and Canada should dial-in ten minutes prior to the scheduled call time at 1-877-407-9208. International callers should dial 1-201-493-6784.

Replay

A telephonic replay of the call will be available starting at 1:00 P.M. Eastern Time on Tuesday, February 27, 2024, through 11:59 P.M. Eastern Time on Tuesday, March 12, 2024, by dialing 1-844-512-2921 in the United States and Canada or 1-412-317-6671 internationally. The passcode for the replay is 13742002.


Non-GAAP Supplemental Financial Information

An explanation of certain non-GAAP financial measures used in this press release, including, FFO, AFFO and net debt, as well as reconciliations of those non-GAAP financial measures, to the most directly comparable GAAP financial measure, is included below.

The Company calculates FFO in accordance with the current National Association of Real Estate Investment Trusts (“NAREIT”) definition. NAREIT currently defines FFO as follows: net income (loss) (computed in accordance with GAAP) excluding depreciation and amortization related to real estate, gains and losses from the sale of certain real estate assets, gains and losses from change in control, and impairment write-downs of certain real estate assets and investments in entities when the impairment is directly attributable to decreases in the value of depreciable real estate held by an entity. Other REITs may not define FFO in accordance with the NAREIT definition or may interpret the current NAREIT definition differently than the
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Company does and therefore the Company’s computation of FFO may not be comparable to such other REITs.

The Company calculates AFFO by starting with FFO and adjusting for recurring capital expenditures (defined as all capital expenditures and leasing costs that are recurring in nature, excluding expenditures that (i) are for items identified or existing at the time a property was acquired or contributed (including through the Company’s formation transactions), (ii) are part of a strategic plan intended to increase the value or revenue-generating ability of a property, (iii) are considered infrequent or extraordinary in nature, or (iv) for casualty damage), acquisition-related expenses (defined as expenses that are incurred for investment purposes and business acquisitions and do not correlate with the ongoing operations of the Company’s existing portfolio, including due diligence costs for acquisitions not consummated and certain professional fees incurred that were directly related to completed acquisitions or dispositions and integration of acquired business) that are not capitalized, and certain other non-recurring expenses and then adding back non-cash items including: write-off and amortization of deferred financing fees, straight-line rent and other adjustments (including lump sum catch up amounts for increased rents, net of any lease incentives), fair value lease adjustments, income on insurance recoveries from casualties, non-real estate depreciation and amortization and non-cash components of compensation expense. AFFO is a non-GAAP financial measure and should not be viewed as an alternative to net income calculated in accordance with GAAP as a measurement of the Company’s operating performance. The Company believes that AFFO is widely used by other REITs and is helpful to investors as a meaningful additional measure of the Company’s ability to make capital investments. Other REITs may not define AFFO in the same manner as the Company does and therefore the Company’s calculation of AFFO may not be comparable to such other REITs.

The Company calculates its net debt as total debt less cash and property-related reserves. Net debt as of December 31, 2023 is calculated as total debt of approximately $242 million less cash and property-related reserves of approximately $2.8 million.

These metrics are non-GAAP financial measures and should not be viewed as an alternative measurement of the Company’s operating performance to net income. Management believes that accounting for real estate assets in accordance with GAAP implicitly assumes that the value of real estate assets diminishes predictably over time. Since real estate values have historically risen or fallen with market conditions, many industry investors and analysts have considered the presentation of operating results for real estate companies that use historical cost accounting to be insufficient by themselves. As a result, the Company believes that the additive use of FFO and AFFO, together with the required GAAP presentation, is widely-used by the Company’s competitors and other REITs and provides a more complete understanding of the Company’s performance and a more informed and appropriate basis on which to make investment decisions.

Forward-Looking and Cautionary Statements

This press release 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,” “continues,” “projects” and similar
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references to future periods, or by the inclusion of forecasts or projections. Forward-looking statements, including, among others, statements regarding the Company’s anticipated growth and ability to obtain financing and close on pending transactions on the terms or timing it expects, if at all, are based on the Company’s current expectations and assumptions regarding capital market conditions, the Company’s business, the economy and other future conditions. Because forward-looking statements relate to the future, by their nature, they are subject to inherent uncertainties, risks and changes in circumstances that are difficult to predict. As a result, the Company’s actual results may differ materially from those contemplated by the forward-looking statements. Important factors that could cause actual results to differ materially from those in the forward-looking statements include the USPS’s terminations or non-renewals of leases, changes in demand for postal services delivered by the USPS, the solvency and financial health of the USPS, competitive, financial market and regulatory conditions, disruption in market, general real estate market conditions, the Company’s competitive environment and other factors set forth under “Risk Factors” in the Company’s filings with the Securities and Exchange Commission. Any forward-looking statement made in this press release speaks only as of the date on which it is made. The Company undertakes no obligation to publicly update or revise any forward-looking statement, whether as a result of new information, future developments or otherwise.

About Postal Realty Trust, Inc.

Postal Realty Trust, Inc. is an internally managed real estate investment trust that owns and manages over 1,900 properties leased primarily to the USPS. More information is available at postalrealtytrust.com.

Contact:
Investor Relations and Media Relations
Email: Investorrelations@postalrealtytrust.com
Phone: 516-232-8900
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Postal Realty Trust, Inc.
Consolidated Statements of Operations
(in thousands, except per share data)

For the Three Months Ended December 31,For the Twelve Months Ended December 31,
2023202220232022
Revenues:
Rental income$16,271 $14,211 $60,970 $50,876 
Fee and other730 689 2,742 2,454 
Total revenues17,001 14,900 63,712 53,330 
Operating expenses:
Real estate taxes2,448 2,037 8,549 7,168 
Property operating expenses1,870 1,519 6,825 5,625 
General and administrative3,533 3,119 14,654 13,110 
Depreciation and amortization5,151 4,761 19,688 17,727 
Total operating expenses13,002 11,436 49,716 43,630 
Income from operations3,999 3,464 13,996 9,700 
Other income 195 311 679 1,029 
Interest expense, net:
Contractual interest expense(2,546)(1,913)(9,339)(5,378)
Write-off and amortization of deferred financing fees(182)(156)(686)(596)
Interest income
Total interest expense, net(2,724)(2,068)(10,020)(5,973)
Income before income tax (expense) benefit1,470 1,707 4,655 4,756 
Income tax (expense) benefit(16)(72)(12)
Net income1,454 1,708 4,583 4,744 
Net income attributable to operating partnership unitholders’ non-controlling interests(270)(333)(874)(890)
Net income attributable to common stockholders$1,184 $1,375 $3,709 $3,854 
Net income per share:
Basic and Diluted$0.04 $0.06 $0.12 $0.15 
Weighted average common shares outstanding:
Basic and Diluted21,396,955 18,857,445 20,145,151 18,545,494 




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Postal Realty Trust, Inc.
Consolidated Balance Sheets
(In thousands, except par value and share data)
December 31, 2023December 31, 2022
Assets
Investments:
Real estate properties, at cost:
Land$106,074 $90,020 
Building and improvements443,470 378,596 
Tenant improvements6,977 6,375 
Total real estate properties, at cost556,521 474,991 
Less: Accumulated depreciation(43,791)(31,257)
Total real estate properties, net512,730 443,734 
Investment in financing leases, net16,042 16,130 
Total real estate investments, net528,772 459,864 
Cash2,235 1,495 
Escrow and reserves632 547 
Rent and other receivables4,750 4,613 
Prepaid expenses and other assets, net13,369 15,968 
Goodwill1,536 1,536 
Deferred rent receivable1,542 1,194 
In-place lease intangibles, net14,154 15,687 
Above market leases, net355 399 
Total Assets$567,345 $501,303 
Liabilities and Equity
Liabilities:
Term loans, net$198,801 $163,753 
Revolving credit facility9,000 — 
Secured borrowings, net32,823 32,909 
Accounts payable, accrued expenses and other, net11,996 9,109 
Below market leases, net13,100 11,821 
Total Liabilities265,720 217,592 
Commitments and Contingencies
Equity:
Class A common stock, par value $0.01 per share; 500,000,000 shares authorized, 21,933,005 and 19,528,066 shares issued and outstanding as of December 31, 2023 and December 31, 2022, respectively219 195 
Class B common stock, par value $0.01 per share; 27,206 shares authorized, 27,206 shares issued and outstanding as of December 31, 2023 and December 31, 2022— — 
Additional paid-in capital287,268 254,107 
Accumulated other comprehensive income4,621 7,486 
Accumulated deficit(48,546)(32,557)
Total Stockholders’ Equity243,562 229,231 
Operating partnership unitholders’ non-controlling interests58,063 54,480 
Total Equity301,625 283,711 
Total Liabilities and Equity$567,345 $501,303 

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Postal Realty Trust, Inc.
Reconciliation of Net Income to FFO and AFFO
(Unaudited)
(In thousands, except share data)
For the Three Months Ended December 31, 2023For the Twelve Months Ended December 31, 2023
Net income$1,454 $4,583 
Depreciation and amortization of real estate assets5,125 19,584 
FFO$6,579 $— $24,167 
Recurring capital expenditures(211)(508)
Write-off and amortization of deferred financing fees182 686
Straight-line rent and other adjustments(125)(374)
Fair value lease adjustments (695)(2,551)
Acquisition-related and other expenses105 624 
Income on insurance recoveries from casualties(195)(679)
Non-real estate depreciation and amortization 26 104 
Non-cash components of compensation expense1,305 5,833 
AFFO$6,971 $27,302 
FFO per common share and common unit outstanding$0.24 $0.95 
AFFO per common share and common unit outstanding$0.26 $1.07 
Weighted average common shares and common units outstanding, basic and diluted26,903,777 25,542,680 
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v3.24.0.1
Cover
Feb. 26, 2024
Cover [Abstract]  
Document Type 8-K
Document Period End Date Feb. 26, 2024
Entity Registrant Name POSTAL REALTY TRUST, INC.
Entity Incorporation, State or Country Code MD
Entity File Number 001-38903
Entity Tax Identification Number 83-2586114
Entity Address, Address Line One 75 Columbia Avenue
Entity Address, City or Town Cedarhurst
Entity Address, State or Province NY
Entity Address, Postal Zip Code 11516
City Area Code 516
Local Phone Number 295-7820
Written Communications false
Soliciting Material false
Pre-commencement Tender Offer false
Pre-commencement Issuer Tender Offer false
Title of 12(b) Security Class A Common Stock, par value $0.01 per share
Trading Symbol PSTL
Security Exchange Name NYSE
Entity Emerging Growth Company true
Entity Ex Transition Period false
Entity Central Index Key 0001759774
Amendment Flag false

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