Postal Realty Trust (PSTL) 11 Aug 212021 Q2 Earnings call transcript

Greetings and welcome to Postal Realty Trust Incorporated Second Quarter 2021 Earnings Call. At this time, all participants are in a listen-only mode. A question-and-answer session will follow the formal presentation. [Operator Instructions].

As a reminder, this conference is being recorded. to Vice conference Markets. President like host, to now Cooperstein, Jordan of would turn over the your I FP&A, Capital

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

On on results not the may those risks Matt without by Officer; Klein, Reform call Garber, Executive Spodek, in the and include Jeremy forward-looking variety control, Accounting a the provisions this Chief any on differ historical today events Officer. described filed does affected the specifically new will beyond Actual a of conference limitation, future and Officer; and of and the Securities otherwise. President; and contained on any are company forward-looking and covered facts assume Securities may the Act considered that are from for not statements use The other made disclaims Commission are result in company's be the These that its filings. to we materially statements, Exchange company's whether forward-looking. of Litigation Statements company the update Private call Financial contained statements forward-looking are Andrew Chief have information, statements forward-looking Chief Harbor Brandwein, Robert call. as XX-K in by of those forward-looking including, and XX, Please or this note obligation by statements statements factors March XXXX. XXXX Safe

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

call most comparable that, the measures release in supplemental Trust. Officer company's measures the now of to to With reconciliation You can GAAP Andrew Spodek, tabular Executive find these Realty of will over Chief materials. currently Postal and turn earnings the I non-GAAP a financial

cash flows thank with another activity. and to happy stable and quarter once robust us joining you you afternoon, again share of acquisition Good for today. Very

to favorable execute the our are our plan on through in-place the and We platform. reflect second income continued growth ongoing our enhancements flexibility business will company's of the our business, delivering provide characteristics our and continue accretive during including acquisitions, balance strong achieved results and delivering of the acquisition We our rents we several to quarter rental XXXX support second growth, sheet, executing to robust growth. quarter, which consistency milestones financial the

for million, Postal the to $XX of costs. During acquisitions the we an X, properties all approximately acquisition closed $XX and on total quarter, excluding million, half of properties through additional properties XX closing million, first for excluding costs. completed we XXX for August to year for the bringing end Subsequent XX $XX closing the quarter

of has approximately XX target million of included million We definitive which totaling this as confident contracts. remain year. operating part on company properties The $XXX Some of another consideration. of partnership will the units we $X.X exceed our acquisitions

in dividend per in company's Demonstrating $X.XX we another dividend Board that raised our IPO our our reflecting to flexibility note achieved annualized an share. pricing quarter acquisition and rate of term cap as This across the is weighted end, and credit cap the will provides consecutive between to a the we increase I'm our X%. to and including estate again which anticipate grow that new as flow X% we and consistently lower sectors, since for real we strong results XXXX. continue revolving strengthened our Directors Given to structure unsecured be XXXX targets, quarter. pleased our to growth, milestone our entered average rate most we upside capital loan cash eighth further our platform. senior facility additional the into growth, Subsequent facility, range compression

Russell offer the report creating as we to pleased performance partnership and are expect proposition sellers tremendous in of to continue the potential multiple Index, benchmarks from units, XXXX for of demonstrate consideration, were sources June, included value see companies. widely are Service. as interest the With emerging We We our one natural Postal that capacity the most to we of followed in we operating including leased we consolidate industry. financial ability to buyer our be this the to assets we

supports Garber, experienced our properties proven and a cash own Postal's and team, results turn operate We a flows, now of have to an more operating robust incremental and to provide stakeholders. all I'll value create President activity. the to on over details for to stable which effectively Jeremy secure our ability confidence pipeline, our and call portfolio

Andrew. second quarter In rental the year. the acquisitions quarter internal our XXXX, produced from we completed you, the in of of over income past second and growth Thank reflecting growth XXXX, XX%

Included As and quarter in to second the approximately to acquired feet acquisition all the owned of Hawaii, during portfolio, square net geographic Andrew XX achieved mentioned, our our properties in XX we properties. our select reach the milestones is quarter, XX first of expands during managed interior adding leasable XX last and XXX,XXX property the mile which inclusive states.

to again As XXX,XXX leases to properties end, anticipate $X.X four of The and of July that XXX% to feet, in of anticipated, X% X%. representing rents. our leases LOI we will Subsequent signed annualized in were interior NOI leases XXXX, renewals in had renewals an excluding XX or were for increases quarter expired these we annual collected approximately million that expire on for scheduled LOI leasable yield square rent. acquired in net XXXX. includes June, once We

profile return ahead, As remains we positioned. look our well total

renewal tenant to lease improvement creditworthiness stable historical flows. long a have history cash contributing rate and of a XX% We

our facilities USPS sheet us balance industrial Robert and results capacity allow by second robust turn providing increased walk that call further position. flexibility over I'll well-positioned pipeline to CFO will a have to capital Klein, and new execute facilities. we our our last unsecured enhanced and on flex Additionally, to mile credit quarter the our now through of

consolidating to on right our And our comments joining fragmented everyone Jeremy. focused you, consistency today's I for want our industry executing position. grow Andrew's to and strengthen this in continuing structure. We call. plans taking while steps are the on thank Thank you, to growth reiterate capital remain on our us

quarter's second rate $X.XX from from of per operations to share, on EBITDA reflect The adjusted and was XX with coverage million debt of under XXXX, share. diluted comprised average prior results per of weighted debt fixed times, funds mortgages. and of charge approximately diluted $XX million had gross June our annualize rate of approximately quarter XX%. debt At of a credit times. Net million operations value was with of X.X $X.XX and of was cash fixed funds adjusted X.X this At we X.XX% $XX.X floating $X.X interest million just net ratio to and facility, enterprise debt our end, rate our $XXX

overall Montreal, operations XXXX. having upon, of facility arrangers to features accordion million and through joint we $XXX we As and as lower, and to XXXX maturity which and as of our earnings notional our other to to and continue grow benefit our These million loan actions capital going flexibility number to forward. $XX up rate features amount a needs aggregate, platform. that provide respectively, in interest swap entered a continue will new drive of book Stifle runners. dates pricing into with facility Bank January revolver debt Capital. end, and cost includes for the will well included an of term Concurrently, joint in credit United, lower touched Andrew Other a term grid, as Truist TriState we quarter entered facility subsequent January revolving as participants lead loan The a JPMorgan unsecured into senior People's new XXXX and

gross XXXX, XX Regarding price million $XX.XX $X ended our per average of XXX,XXX raised ATM common activity, for at the of share. June stock proceeds just we shares an issuing three net months of under sales approximately

approximately units of in the for as partnership, issued properties common we acquired Additionally, XXX,XXX operating quarter. our consideration during the part

invest we in to growth and of people, platform that the our technology business, support Given infrastructure our of ongoing to growth. continue

G&A expense the rate the of Our XXXX. approximation a represents quarter run remainder a for quarterly of good for

quarter-to-quarter, a And revenues cash percentage some there an to annual decline. We of may our basis, will while from benefit scale. expect be as expect G&A we variability on

to competitive We on of the experience advantages concludes platform the ability postal compelling focused to and our This and provide a questions. in sheet driving key units. to maintain us judicious balance earnings to growth, Our to plan. affords use sector, like remarks. for options our including sellers open we'd conservative us our positioning include OP continue strategic remain access Operator, our capital, ready approach prepared on our scalability, execute call the for to

question-and-answer we gentlemen, conduct will and a session. [Operator now Ladies Instructions].

first with Gorman is question BTIG. from Our Michael

in driven by that X% cap how follow-up the the Andrew, discussion increased level If your rate X%, just maybe the if across type types? talk To seeing acquisitions pricing property your overall I at pipeline? on all versus the industrial compression the that you the pricing market. shift assets much the of is in it's more property just towards property to extent leaning the some lower acquisition you're about could distribution versus in range, type about weighting

board. I is it. that I question, appreciate great a over Michael. all believe Thanks. That’s really the

there's flight but compression general. sector in our I real a I across And in [Technical think estate been industry, Difficulty] the a general. in just that yield not think to been there's

any questions? Michael, more

type? increased that follow-up lower Is maybe Or you are the that in the competition are you seeing well? for yields, of then the the one increased the And where interest sorry. institutional starting from? on retail as asset of causing aggregate most to that's it competition Yes, is, more seeing buyers coming

to think competition. don't it's specifically I related

real cap market are constraining estate general rates more never yield or local and on Postal the think there's across the you're There in a out going on you have When a buyer any I competition yield and XXXX deal, -- whether properties there a just higher down that estate conditions. cap at all when focused flight really are it's it's a just to market. trading to yield, if are rates drive down. people real were buyer Postal sectors, and assets general

So it's specific not a particular answer.

just it's over the think place. I all

either for Rob. And for me or -- last one then Andrew for you and

able them the bring events? that provide the providing equation for some issue it's taxable seller you transaction, that units, price whether value helping on units the of themselves a you're to in you're OP their On a on when side into the the of to or yield those the defer does terms benefit to just on recognize the

partnership effectively operating those priced units We question. at price. market good Yes,

done average those So, generally weighted in pricing. kind of some we've volume

transaction And days. or moment prior will stock in the at so reflect is, happens they the the where that

has benefit the Andrew as of on use helps some the drive operating our unit has to really the sellers. prior So interest calls from that been, mentioned to partnership ability

OP sometimes transaction up ends unit. an the with And using it

a as with the stock up up end units sometimes being yield transaction. And ends does. cash same really common those OP it But the

don't really we differently. so And them price

Markets. Capital Height next with Our from is question Ed Groshan

a we bit looks just might so And want be of the year. sure million a doing you heard fair? little I on $XXX Is I do to like couple. better pace I I the have Andrew, for make guess And that, you, guidance at that. than or least that just have it to right.

is That correct.

the about, and between can facilities, unsecured Okay. those or you of the color, and And just floating on of as well? a debt just facilities, talk pricing the you $XXX the can it more million specifically senior on both then is give little for

Sure.

So for two things. allows the facility

well the million, which of rate million can million ratchet where term as to accordion $XX it both on We The we an $XX up as were by floating loan another And an $XXX revolver, And can a basis. which is it $XXX has well. increase loan have a committed. executed accordion term we that $XXX of have revolver has million. million a

a the loan. effectively did to fix we term into rate on swap However, enter the

is for loan. points term it's of low of which the points grid, low XXX over end basis the over end at LIBOR the pricing is XXX revolver. are the basis where for the at So we leverage, And the

SOFR just and does LIBOR that an this is is going something goes -- or aside, the you just going facility away? -- away, or And to when else

XXXX in that how but from to to for or LIBOR earlier replacement event to rate details come transfer the more be is there provisions or there'll the surviving does happen. when rate Yes,

That -- queue. are you, Just an LIBOR banks I'm I get was been the the just back regulators get right. the gentlemen. surprised pushing doing them will anyway. bank in All because have I mean Thank aside. LIBOR to off still the

Instructions]. [Operator

Our Kevin next Stein Stifle. question with from is

Hey Andrew.

and how forward release started wondering I the of was focused have, know earnings XXX you you about in flex going you're type last on the you properties. breaking think So I and assets particular XXX type? if industrial out, a that mile, X property mix just

is purchasing the those on of and public, fit Service buckets, perspective, buckets those of down to classes. types below those of into the properties that different different really further can types the into their gone what interested in the the explanation foremost all interested educate leases. Postal we've those and underwritten those network; first in properties believe to logistics And breaking Thanks, are properties of Since three three and Kevin. in all attempted be those we've be asset we of market And a we our assuming, important asset are that Postal we're is it three From that to or categories, at above that purchasing secondly, buckets. in two marketed. Service classes

to properties structure, the lease As you the purchase of we're know, able because entire preferential these country. throughout

either. geography, by limited aren't we So

Ed comes Our from again Capital next Groshan Markets. Height with question

Rob, is this you. for

sure cash you make I variability talking of you're revenues, mentioned I the G&A on about G&A, as for to about want talk as to you Is next just Just the you few in a that quarters. When percent opposed understood fair? your correctly. variability. comments

it Yes. the there G&A, of at this year. in and of ratio but good to I did guidance but compared to quarters that's we've in given good a qualify is want rest that I for a mean, quarter the the variability how proxy some shapes year, the looking it's now and in the that remaining it up

opposed G&A G&A But be percent flat your change income revenues, we in few a dollar statement. variability in a material Right. may for about as the like, really quarters. would talked But the of that dollar comment see not for absolutely next to as

G&A. Yes, because cash the variables there's there. revenue, there's and the two There's then

And different is in particular ratio a move so one of either them can general, in down. But slightly that quarter. coming

with Petersen Our next Jon question from Jefferies. comes

inflation? operating maybe that you talk level and impacting how just the like hoping high any inflation thoughts expenses, rent how could escalators, the impacts just was you on your I about guys see business,

have I'll talking balance and I conservative that Yes, short sheet. inflation, think straw a the draw good I guess. in we question. monitoring constantly about We're very

access we on that of tell about the where of comfortable stand proportion classes, our we rents house, I capital. now debt, fixed side good about think being there's about And where to feel our another to in and our there. Andrew think debt how we I plays side XX% may asset particularly more on a has So than we total feel little been I perform pretty with react a can in notice. all bit of stand general, how inflation, resilient a to color environments I very high may that we've types in more about than renewal correlation have that percentage. But and and proven out. has tenant sticky But of that Hard our

good we protection about of So our income. feel the

as as that the leases. answer I'll Rob. it Thanks, relates it to

that to And have benefits of that ability the those we of don't reprice that's on is. let's double is it, the how just XX% year the having advantage of players the depending a of and One an call of around leases average leases. five and triple have their have that lot believe leases, your of other, inflation you term that leases year. because net environment gives I how roll on duration you that And a

now Our around lease term average four right is years.

it so, is. revisiting ability how gives us And to the really the environment inflationary to keep see

spread nearby the at And like leasing type market just think usually potentially great. renewals to negotiations, right how forward? really how to like of see us is of can going properties determined, then, retail looking about are we remind I’m logistics Okay, we these and rent maybe trying much kind how lease get properties market.

property basis, market on the Lease, right. is determined

comps, even and there mom market, right? the national what tenants, or evaluate they're whether regional is. or or the whether We we or logistics assets Postal pop as and So retailers, Service, other comps Postal does retail are market determine

[Operator Instructions].

with next line BTIG. again from Gorman the comes Our question of Michael

Yes, thanks.

Just Just just Can on of talking you good about inclusion talked you milestone. follow-up. which all I maybe of increased you a over conversations just the of or has some existing that shareholders? in, classes, the -- potential the as the the couple company in profile inclusion new other risen, the asset you quarters? how has past you've outreach, the of think quick a changed kind the Rob, investor of are about a some conversations progress you're having or -- obviously was shareholders as the has liquidity with made share coming future index index

company. I grow we milestone and to are shareholders, for Yes, the story, receptivity with was we market think to growth see happy a were and as there milestones high great really us the prove see as existing for the from our important our they These growth -- company. and

good in therefore the and volume our well. as liquidity was it it So our increased market respect, that in

So been another with investors that consistent pretty another benefit. they've way and Look, our inclusion. one I discussions don't with changed or have think

not I on keeping been up notch more that just show accomplishments It's there. think our eye has in everybody one the to cap has use, the the invested size that and and keeping an are for date to us in growth story. and and

Ladies and would call the management of and gentlemen, the remarks. we to I end turn question-and-answer the have session like back for reached closing to

Thank and connecting time with months. all coming the the you. busy everyone want and taking We call days team, healthy hope to today. you myself thank join entire this us out and to next you of is look of for On the for we over staying your safe forward we that behalf to

This conference. concludes today's

Have time. much a Thank participation. you disconnect day. may for great very You at your lines your this