Postal Realty Trust (PSTL) 12 Aug 202020 Q2 Earnings call transcript

Good afternoon. At this time, I would like to welcome everyone to the Postal Realty Trust Second Quarter Conference Call. All lines have been placed on mute to prevent any background noise. After the speaker’s remarks, there will be a question-and-answer session. I’ll now turn the call over to Mr. of and President Markets. Vice Willenborg, Business Capital Development Blaine Please conference. begin your

welcome afternoon, conference Postal Good you. to call. everyone, earnings Thank quarter and the second Realty Trust

otherwise. in Commission statements contained forward-looking Act the from assume The statements Company's in control, on for Exchange filed XX, company forward-looking provisions and a result On company update Officer. related call the as of that those our considered to effects whether of future are facts Please and its the harbor risk Chief the forward-looking, These statements use variety Company's be on any factors with that Actual Andrew and the others, President; the including, statements and or of Postal statements those results this XXXX. Reform the are negotiations COVID-XX statements may including, its forward-looking Securities safe Matt conference the note Private we does information, differ XX-K beyond XXXX, not and are on terms are among by pandemic call. obligation disclaims and forward-looking pending and status by events affected and Jeremy made the other business, forward-looking and specifically Accounting statements by our covered March Officer; this to may the contained ongoing not Service. limitation, Garber, filings. Spodek, timing Chief Securities Brandwein, our a of of acquisitions call today, any on without the Litigation include in new will Executive described the historical of have Statements

operations. such certain may this call, adjusted as from conference funds financial measures Additionally, company refer from operations and funds on to the non-GAAP

Commission. reconciliation the measures in comparable and these Exchange earnings find non-GAAP most the can tabular a in Securities and filings to measures GAAP with the You financial Company's of currently release

on Spodek, found website. will be on Andrew Additional the Postal I information Investor Executive the Realty With Chief of our may that, to page turn Officer over Relations call Trust.

for and call. Good you Trust's thank second afternoon, XXXX Postal joining earnings quarter Realty

the different would all your like phases the hope to into Postal ones and stay we and also responders you loved work to We their and since the for continue began. to commitment country As of safe. Service first begins advance reopening, pandemic hard thank employees

pleased company is team of what currently respect company each first from produce policy, an for is their we the Our maintaining members results work want our optional strong in of our home to best report I am the and as safety. to year. half

this we've As our health to well-being throughout a team, maintain been crisis. and able

not to revenue addition pandemic stable impact any In businesses’ this, on stream. had the has our

month rent we July, every receiving our Our XXX% in have rents our unchanged as IPO. collection of remain with since

we've to our by every been on As to $X.XX dividend X.X% July, able an raise our dividend share basis. a quarter. In annual result, we raised per

our within X%. Our over all for acquisition show average on leasable million continued of progress, and properties closed rate has X% approximately XXX cap range net interior stated square to in approximately having to XXX,XXX activity XXXX $XX feet,

our even for we result our pace this million a prudently $XXX and resumed credit line second the acquisition goal to our quarter the with we on opportunity activity As previously our slowdown We equity acquisition achieve and offering. are our first follow-on pipeline successfully we in the third XXXX. quarter, paused and of communicated of and the to as pandemic, completed in proactively took amend of

our model. our strength further rewarding has extremely reported new follow-on first our firsthand. thank markets, Our welcome the play of and access support. the continued thesis their shareholders ability continued us to We our business through Having for pre-IPO it in out initial our joined our facility environment see to been shareholders and highlights acquisition that and credit amend execute our four plan capital now on the quarters, current

with We the value. XXXX will are Jeremy to second The and remain aligned call XXX% growing of very cash and turn our I quarter much Board committed over now discuss deferring you. shareholder I to results. to salaries our for are

Thank you us And thank Andrew. joining evening. all you, for this

for Turning acquisition to quarter. was the which the approximately loss reported per related share. $X.XX results, $XX,XXX. our in we expenses share, net was financial a of the per includes $XXX,XXX quarter for of $X.XX approximately GAAP FFO AFFO quarter

of on June to we at had million and the XX, XXXX, Moving debt. million balance $X.X cash [$XX.X] sheet, of

to the advance credit to we eligible properties base the be from our on to During facility our XX%. the quarter, borrowing rate allow to properties additional increase amended and XX%

the We also and XX into in the for on $X.X quarter, mortgages second was during April properties. closed two first entered million

unit to offers any additional comprised an In of and XX times $X.X capacity rate of The acquired combination of line interest XXX,XXX of our interest pay quarter the have debt $XXX additional of our a and of rate, coverage credit mature After portion in We charge only of on our and $XX.X the acquisitions the consideration the net million were weighted were we of third of our properties. completed closed estimate transactions. of offering ended, with our the of the definitive a in assets. of approximately the by down X.X the with in to million excess raise capacity X.X $X.X acquire After interior carry to currently debts quarter. a which line adjusted are close million for the at the agreements, X.XX% used equity second net square quarter, leasable interest expected The times. feet. EBITDA Both the $XX.X proceeds offering properties. million end a ratio the additional follow-on mortgages on buildings on fixed the million from XXXX. to a was June equity of are we XX first ratio average quarter, of majority XX quarter, that acquisition our second us for and fix months X.XX% all close We in end credit OP for and before of

we shared, Andrew targets reach pace are $XXX to As acquisition for this year. our million on

flows since dividend quarterly property for been a declared increase. acquisition cash XX, the to of activity per Board additional is business, our in this $X.XXX X.X% for to color wanted for our year. increase and I dividend some second our share dividend a IPO. May XXXX July XXXX, to quarterly the public have increase take second provide opportunity now provide on fifth which we as On our our fuel $X.XX annually and dividend. or Our equates This the quarter,

OP July approximately where earlier, outstanding and on As we on closed X,XXX,XXX bringing XX.X total follow-on average Andrew common first mentioned we weighted our our shares shares XX,XXX,XXX, quarter XX, units million. and equity our sold and to outstanding the to units offering, for shares,

out on update leasing. turn an me Let to

shared previously have Postal or have we that form As the new we lease rolled-out Service been negotiating.

XX XXXX with prior. new We expirations letter expirations or XX remaining the acquisitions this of in XX properties of have year. Of a on X lease intent are from

X% the diligently $X.X like these on working rental year. perspective resolved by provide We end to with to the which are million. of our from USPS additional increased get revenue, would to all quarter last We

comprised the do the a second properties This $XXX,XXX tax if tandem real X. Through quarter in that will item transactions acquired Tenant estate real mismatch rent on typically acquisitions, reimbursements tax of real in reimbursements the and approximately properties our reimbursements have of taxes. because April, been $XXX,XXX inherited taxes. of quarterly expense, was partial line closed with increase $XX,XXX require would for quarter, we’ve majority to the the tax Currently for of XX leases estate not equates our estate the reimbursement. the all reimbursement this for For provide $XXX,XXX quarter.

we where the acquire, properties there may to As are reimbursed. not taxes continue be

reimbursement. expect item. TRS. vary the these roll, item to one-time for incremental from This be As not income income quarter, income, With able via terms line of property from adjust other we comes the do to and hopeful this respect recur. the claim may are fee majority an to leases lease second management our an to insurance tax included item $XX,XXX In that line other because we

expenses G&A $X.X the for $X.X in for to to million the were quarter million million quarter. compared $X.X total the as quarter. million prior was versus Moving the quarter prior in expenses, $X.X

is G&A each. and components three of comprised think Our we to understand it important is

related call G&A includes amount to relatively for include professional what in recurring not bonuses, QX. this and our other $X.X that of incremental and QX be we does The rent, flat costs. fees first to company growth our We anticipate substantial salaries, million. was This benefits, the each for is This public portfolio. quarter

approximately We quarter of QX. $XXX,XXX anticipate our based compensation, The for for equity $XXX,XXX the approximately range approximately in of second will is QX was figure be $XXX,XXX. this the component to and each second which

of vary the can Finally, on the $XXX,XXX believe expense used from interest our in rate credit This our a approximately line non-cash interest, which our In in expenses costs that fee, appropriate of approximately to $XX,XXX. quarter, based was decrease figure XX.X% decline $XXX,XXX and those We and the and costs. for is our activity, to down due were our quarter each quarter associated purposes for last interest modeling fixed QX first the $XXX,XXX and mortgage of QX. transactional our includes Interest our with component XXXX fee. financing unused acquisitions.

to in QX, go we expect as XXXX, we properties. for acquire to CapEx increased Our up recurring it continue the more and quarter

annualized remainder We was at This this foot how believe the additional approximately the quarter detail currently framework of we $XXX,XXX more year. or for provides are per square business on for looking basis. it the refined $X.XX an a

closing Andrew update operation. back now business As as these its progresses of I may some remarks. to we second items approach it in for turn XXXX, will we of our some year

mile for as purchases, essential crisis. other medications, Service the as business. They be to a service key Postal checks deliver proving ever current security The through leading the remains delivery social necessities last and resilient and as online

surrounding there we questions cash have articles issues. to on and provide for around our that mostly Recently, XXX% sheet numerous the all stories balance perspective can rents occupied portfolio. We Postal Service, and have these want as We main understand two received been flow such points. their news raise

millions Service to Postal work has Americans many so deliveries of norm XXX has and The the currently to million of delivering XXX,XXX the every third The of more the largest network become to to in commitment people. United facilities over far had by Service the be would difficult and new States, The it daily is delivery critical adjustment day. and the and Postal This not enable delivery people, from people Postal importance points the that and the is the stay Service. American first of the to the employing continues home. employer industry had

would purchases for backbone only to importance the both questions. to The closing, Jeremy work and of all support. of call gratitude of expenses. Postal of have ensures live. This or comfort last place have to the competitors, post With the wherever dominance accomplishments have they facilities postal small the any any of at open very team that that gross extend to their We their is in and postal this aimed accounting the all annual to offices X.X% compete receive a our service of like entire infrastructure hard delivery its our is of clearly this network second shareholders company our the for cost because may the network In the rent network Service. for our Americans shareholder business Though mail knowing value. and total to the itself. can is The is I to network in growing choose in online they none mile their is the regard. now services

we'll Stevenson with and from this [Operator At question time, of conducting question. answer with a Janney Scott. Instructions].Our question your line Please you. first Rob Thank Montgomery be comes session. the proceed

little can that by a the have million motivated changes Andrew, there, agreement? like people exchange afternoon the et -- what you rules about in being any the behind bit good pipeline guys. evening, the Any sense are $X.X under acquisition [X,XXX] cetera? Hi, or looks you potential deals talk portfolio

Rob. Sure,

$XX and of accomplish million approximately are completed our we've of well articulated, on goal million we've as to our XXXX. way today, as So for $XXX

the in We of and lion's those close have by the to LoI end approximately of we're various year. $XX share diligence stages the million of contract and hoping

elections. from been community, in of tremendous some the things, In terms a response upcoming the we've motivations, seller is and probably X,XXX which a of by sellers of lot motivated the exchange getting

to And just of deals Okay. significant now the talking or is there portion most right involving wanting you're at any OP this units cash point? people that

the it in interested specifically to various is that that that units are are of of We means of units. owners as in OP the anything constantly and communication attributable don't have the currency, families use use we with pipeline in but

expect are outs currently to for two renew everything at at any everything point then office -- this post the known that moment? assets post to And office the the Okay. that you or move the

of XXX% occupied, don't As any right we're we XXXX. for now expect vacancies

for last stuff? and one prompted the SEC what morning one on me. Jeremy, then filings was Okay, sort what this registration of --

From this morning this or afternoon?

hit SEC look from or the but I boils curious something what's what when equity this line gist see -- -- X those revolving morning was it the my on just like the it Well, ‘o'clock it's was I'm as that down offering. around to like around mean, is filings? system, it

not -- the -- turn filings. I'll I didn't comment a didn't Matt I'm flurry, let see I'll it to comment. so let to we over on Matt

aware morning, not that -- relates of filings it I'm Matt. across is this as coming any this we're Hi,

it released registration whatever, like that And around a.m. EDGAR this the was looked there mainly statements. with was, them -- Was like SEC of it SEC like dealing and X:XX so, system seemed or was it whatever, morning six on correspondence, or

that? I what So was curious just as was to prompting

that's offline. easier. follow up will If I

Yes.

Let's mind. do that if don't you

it. guys. Thanks, Okay. Appreciate

Thanks, Rob. Thanks.

Thank Instructions]. you. [Operator

of from next question. with proceed Gorman line Please BTIG. comes Michael with Our question your

have just appetites your OP maybe you from the on Andrew the evening. conversations appetite units pretty seller that price capital OP specifically deals here versus having? the unit the offering the moved Good pipeline thanks. been for the just acquisition nicely obviously follow markets stocks Yes, in about for units to the Can talk obviously choppy. up OP pretty up you're and

sale unit have shelter assets income, very OP The very their depreciable no are space. currency their or capital which the to families basis of for big of a is little So typical a trigger the in that's valuable certain and postal no and very owned decades gain. would owner

continue like. an various transactions are community quick not typically transactions an well. We would a do appetite lot involved we to appetite using as with and for units of different in they're have believe so and and owner we And and so, the complicated those everybody interest and things, seller, those members with motivations different does as But, these currencies. as efficient to have do have family

role after Okay, the deals done and bit aspect, the the sticking think existing you you footprint just you do speak how as than end the thematic acquisitions, your portfolio? Understanding interior has -- it maybe underwriting square you with look data quarter construction a to there's can or of the guys you've about gross then your at the that portfolio? of does smaller than XX in footage play the the or a closed that

deal for each deal has every we and speak very, And to specifically. very underwrite itself. So evaluate

than to And different so, we I that don't terribly was think relates that anything it this as the closed quarter there quarters portfolio's prior. the

may a were at that's there's general by owner the a were because our particular they or where when concentration you the similar based. in state a be group that by overall, if or of owned family nature, size or fall particular parameters. owners have But a within it look built they just Sometimes buildings in

two Okay, mortgages, the the in June? great. then or in done anything the one that between on the any one of And there in rate, terms mortgages April quarter, in Jeremy different were interest both [LTVs] other and last at the maybe differences the one the equivalent same one were

so No, consistent. they're are with all the same provider, terms

Great, very much. thank you

Thank you.

you. Thank

from Frank BMO your Lee Markets. proceed Capital next question. line Our question comes with Please with of

afternoon, guys. good Andrew. Hey, Hi,

any in OP versus the in compared deals? were the and closed units deals the fund how quarter, about the talk done prior pandemic, to acquisition year you can the if to Thanks. help issued early third the For they've pricing

fell parameters Thanks, within Frank. that at. The pricing we the look

drastic. vary that parameters every try nothing that X So to really pandemic. Again, every deal in at really X way. that but changes, the to some for -- pricing prior in cap those and see are We don't rate we the still They we transaction deals slight to range. specific did look their drastically do

the And have we the the unique we the we so closed prior. ones that terribly the pipeline about versus in there's closed quarter that ones ones nothing versus

then second how [proper] has, facility, to help that the and completed you've cemented now should growth your level mortgages the credit question we using think Okay, and plans? about follow-on fund

to So efficient on execute our way for utilizing the plan. environment time line rate compelling being, we're most mostly it's of growth be our it's going a and and The the credit. interest easiest very, such that very to is rates

continue continue we the down road As to properties. acquiring and be

undertaking properties, we're We or are mortgages properties now. this that on specific something but looking either of right at not is pools putting

I have. all you. that's Thank Okay,

Thank you.

Thank you. Instructions]. [Operator

comes Craig Please question. Securities. Wunderlich proceed with with question next Kucera of Our from line your

evening, on sort negotiated sort of and I Yes. in work to back circle the like Hi, had the Do of a you to the commentary language just month-to-month USPS. those, it was leases think with is guys. think through current with guess a leases. you on I good still I sense the to the and June, XX are sort X,XXX,XXX about LoI what rent being that mentioned an want were, I have late that of was basis, XX sounds XX of on? on you

documentation clarify to process to on you dollar lease we're we processing in before those leases. amounts, terms and of Jeremy the have and So just agreed just gives turning the around

there rent, have year. notification that the renew happening, no is vacancies we being of been arrears. no for to there any While And are or are not paid has our reason any

anything of an So administrative this been has more than processing paperwork else.

same the place? then quarter where language were ago of still a the as far we from process are the where improve or in as -- so sort Did we

the that just to matter agency. government execute to So the a now fully -- a processing have Service of all is things documentation it's leases. the still It's agreed Postal we've language improved still them is new would control it a for relatively us like so to. so doesn't and as happen as quickly process ends quality all this there's and in we This and on for just

while have a Friday a And -- let go, currently guess thoughts wait Okay. on the the [massacre] do level where thoughts you of occurred sort in of officials the of for on? senior is number office what's we your Friday Jeremy. any on I at post that last going guess I what's terms night were

business. I in, the to typically So operate their in and needs new postal I thoughts ideas What Postmaster changes. is comes and a believe, way employment General on on be not own into and tried translates the they have their do changed they to that general, apply when what that that service

it sector than to in has hopefully I'm as very he once speak American be service and the postal So will the the changes hopeful to I to at point person a logistics confident the particular that to let service. looking the the people. and experience will advantage a new try go from comes were. can't they applies private why be and that it that General people business better and or He's business post the the helpful for Postmaster More effectuate that make were

my last Jeremy. question, Okay, that's

you don't If have evening. circle this it, I to can back

right. Yes. All I do.

the is around holdover currently leases of So million. the in value $X.X

Thanks Okay, guys. great.

In annual rent.

Right.

to any our comments. floor I'll gentlemen, answer you. Thank final turn and for and that back Ladies session. question concludes Mr. Spodek the

healthy us want Thank Realty hope we everyone you joining during unprecedented On for times. to Trust you behalf there and and the myself is Jeremy today. We safe very just these much. team, out entire and of thank Postal

This concludes conference. today's you. Thank

participation. You time. for this your may Thank your disconnect lines you at