Postal Realty Trust (PSTL) 11 Mar 222021 Q4 Earnings call transcript

Greetings, and welcome to Postal Realty Trust Fourth 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.

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

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

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

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

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

rate a year. were of today. our for cap at us sourced produced off the $XXX approximately Good in X.X%. and Notably demonstrating target the million strong between three for our Realty more quarters joining Trust and market, thank you acquisitions weighted acquired a industry. our We XXX XXXX, than for exceeding Postal average acquisition afternoon, X% access properties of

consolidation rents. within continue on stable place an We execute and enormous We in cash postal to large, our see from flows strategy highly fragmented our opportunity our grow this market. to property

Heading exceed acquisitions our is investments X% expand making even platform X% efficiency position support our million experience $XXX and scale. our and our us growth. rate range. it current to cap our trending date, confident and will deal to to our execution are to with flow successful in moat, further real a in invest support and the and importance the Notwithstanding industry-leading to of deep increased ongoing are rooted of the we sheet of leading postal extensive significant opportunity and growth. cap we to and accretive to XXXX, a to are X% but owner only are finance service see company's with market our positioned We our rate knowledge into on a the similar robust pipeline, compression, us network our to extend This are our and we well the systems market, in operational ongoing broader to leased properties capacity enhance balance additional we estate Furthermore, to allow industry, have to with our front continuing proprietary leading investments. data, we continue utilize technology in make with share, year, enterprise better

postal in the are founded real estate our regarded REAC, closed as excited of estate by to real former on known postal acquisition firm executives. counselling, asset the of a part consulting senior industry, estate we investment, service have As highly real commonly

the and negotiations, providing other due with with property services. brings relationship of the lease ownership advised by assistance postal within contributing For industry strategy. under decades many REAC to data development experience, advantage to look value almost our to XX sourcing years, additional We underwriting our and our insight acquisitions. forward and REAC and our REAC of diligence understanding adds has community along proprietary strengthens consolidation and umbrella, competitive

from in sellers to working who the potential realty. receive value postal proposition understand with We interest continue

that postal have proven the over years, As be partnership our least such stated to support infrastructure the consideration, ever-growing to sources It offer track has we multiple to and of across as assets the created record irreplaceable cycle. capacity, stable logistics at proven financial service. economic service every the industry. tenant to The operating e-commerce network an incredibly makes us units includes of an buyer ability postal natural has critical

In of finances overhaul further health ensuring The postal to fact, improve helping of reforming this a the this future finances key of importance our retirement We include to their in benefits, and aggregating legislation benefits years shifting legislation its endurance. properties continued these service services, come. the the prepay to country's of and Congress infrastructure the of to health service passed this services the business services that US retiree much Medicare validation postal important benefits, thereby this the meaningful the legislation repealing provides further to strategy that for accretively postal requirement way. week, believe and delivery elements support

future within postal the can As estate resource a current we service be real retain the in continue to acquire and we their leading postal to needs. postal properties continue to our and space, position

and stable Jeremy. move ability ahead, pipeline, all supports we stakeholders. secure team, which own over I'll confidence our properties have now to operate a of effectively for an the to we experienced flows, a value and our turn cash robust and to create proven As call

Thank you, Andrew.

We effectively existing total year. a with strong over to a an of collected contributions years, our XXX% up rents in three of the leases representing basis expirations, on remain acquisitions of next XXXX, X% for lease collections have year year. our and our XX% that XX% managed portfolio, again renewal. rent accretive increase annual our for each We from the once during are past from reflects along This in revenues produced we pleased

not XXXX, the March service. termination During by we have notices of any postal the fourth quarter until received XX,

to had are postal turn properties, buildings feet contracts. communities how March to we costs. with for XX% high average, financial average and This and consistent the the lease XXXX, mile retention weighted which During important they last rate weighted square both historical these feet rate XX additional properties a continues to XXX our X, another The end validate call serve. properties. flex added displays has identifying service. for through million we that year and X.X locations XX important totaling, million due I'll approximately to to the Rob our the million acquired square process inclusive from feet balance net are our believe postal over sheet square XXXX. feet XXX,XXX million our interior closing now four leaseable XXXX from of we to $XX acquisitions XXX,XXX XX square in from service diligence to and Subsequent properties approximately $XX results, industrial discuss an X.X company under excluding definitive outlook properties portfolio

Thank or quarter, the FFO share you, structure. Jeremy today's adjusted from to from supported on diluted per AFO further operations we Trust of $X.XX and operations joining of thank our we strengthen funds share. continue steps Postal delivered well by and the $X.XX on diluted per for growth to capital you positioned took executing us call. is or funds fourth plan everyone In Realty our and is

from per was X% AFO was prior respectively per diluted share, and FFO diluted XXXX, year full $X.XX and XX% increases the $X.XX year. the For share

a have and straightforward sheet. We conservative balance

metrics floating approximately of of December rate of facility. on million $XX This net and to debt $XX and comprised gross value XX, and X.XX%. or our rate targeted is million a we we weighted times cash nearly to Since respectively. interest credit seven we'll XXXX, to were XX.X% fixed outstanding X.X million debt At end, debt and times year As so our have remained consistently had revolving our below debt in annualize of approximately we adjusted of IPO, net rate and expect continue of XX% $X million debt XXXX. do with enterprise at of EBITDA $XX average those

quarter, fourth raised our have issued during provide the like to the proceeds. property completed revolver, acquisition million Mateo a item million only million us the fourth is During this likelihood as of San leases flexibility quarter, $XX we growth equity the facilities high that with exercised a property during we completed from gross have of upsized on the revenue and lease. the The support of of assumed completed in we we drawn In our Milwaukee. capacity offering our necessary strategy. X.X our under a With financing to they X, successfully shares reflected credit containing approximately in other where options March property line financial course XXXX, and Downtown purchase our be are as and fee follow $XX

for in these million The on in of K disclosure million of total a acquisition additional $X.X units. consideration $X.X cash was and We REAC partnership have provided upcoming $XXX,XXX of XX leases operating executed in our filing. financing consisting

We cost immediate be when impact expenses acquisition. potential and line expect the revenue, minimal savings bottom in with factoring associated to the additional

raised systems important than in some to and it technology, and XXXX, hires. as represents a capital to of to increase in achieve goods, we XXXX $X.XX ordered XXXX in that moat we on of earlier quarter Also in the share. to dividend million. our and to invest XXth future growth per dividend. incremental to a supplies dividend our and our of continue percentage larger governed enterprise accelerated X.X% diluted from performed is delivery to of our investments annualizes to being supply primarily Andrew continue growth in revenues. were recurring work the platform our the increase year of our available. quarters and materials discussed, be board million investments includes chains the cash recently and in fourth $X by dynamics G&A by affecting We prior This business. due were To the directors of in ratio quarterly expand those scale cash the once subsequent focus to anticipate G&A, $XX.XXXX, as As expenditures consecutive our which continue QX further This roofing in given our announced portfolio quarter These progression will approximately $X.X growth, our to

ahead, present As an environment. company our well we look remains even inflationary very within

all sheet for This contributing a debt, to market Operator, we'd ability retention questions. rents We high open remarks. and limited like have credit call floating prepared rate, the cash historical lease tenant, to balance concludes mark to a flows. a stable our the rate strong with to

with Thank next question. Petersen your from you. question Please state comes our first instructions] [Operator Jon And Jeffries.

thanks. Great,

question First guidance. was the just acquisition on

I cap a went rates year back ago. think noted that to you X% X%

trends surprised and the general, we in estate and about compression. about. any but I were just, X% really thinking you to think don't going to across thoughts cap We're guiding to real for X%. I that XXXX, know that into see be rates this Not competitiveness should seeing space

Thanks Hey for the question. Jon.

I office range. pointing think you of don't really to year, different across all compression seeing. but as we're I This I estate. post you're that the the we're the on X% give things. in are real seeing is specific issue that's out, really seeing types of And people the a this is can't guidance today think X% is rest how that

have I've kind more business seeing, a estate more and seeing most I going recently. just months of this think it's been is what which compressed people the real has on been for in gotten compression little been

guys guess, anybody these you don't normally Okay. properties market, against you guys entrance are the that in you see? bid I Any seeing on new

same. No, competition the the much pretty is

prices sellers that and or anything cap are are higher it's getting at bank lower post or and trading that think else. a a rates seeing just assets they're a they're office asking for or that whether I it, pharmacy

seeing. we're and we're It's think a just buying. fragmented there I else here market seeing is what again, out everybody

our to have continuing As we'll the vast we're confident seeing deal purchase properties X% -- off we'll so majority things deep stated, and comes ranges where be network market in these I just a very X% of to continuing flow and we're we rate cap be today.

think just legislation it this good about office flexibility, financial Okay. seems more in to the think and And of of Congress, my new would more investment question, on having passed their I'm unanimously a guess in last for through that little that to take guess chain. I bit terms it and I the I then, kind trying to I next imagine leads post supply level of reality. means relocations potential spaces, some that, kind maybe additional to could there just part postal you for that maybe if guys of you a projects redevelopment guys. for Like, expansion of maybe larger is kind growth anticipate how do more of impacts directly lift or think we of more upside like through like might some you kind that risk or the impacts

this is Jeremy. John, Hi,

investment the is it's too do Joy's choices in Andrew in of part it you when going that a this change forward the or the times see by was this were impacts years in think see went I excited infrastructure their the invest this to And exits really any driven network. many is for has locations think move to from talked locations small cornerstone. your see existing buildings. infrastructure to either them plan, space, plans we of to through we existing Whether as think too don't think really buildings, investment I XX existing of the the or going being large. need We allows This I the the to first USPS making. question, to really strong if that footing. really was in of tenure we're benefits with

of buildings to going to our continue in valuable I value. think be is increase that network and

some the the whether fishing, of different social lot this licensing, just As services they've for opportunities, now of that that of to sort way it's finances, the out offering now. in more be buildings, of moved read able explore security, overhang you a different there's drivers, government they'll

All Thank right. guys. you That's Got it. great.

question question. next with from Our Kim Bin Truist. your state instructions] Ki comes [Operator Please

in G&A to looking the Thanks. little three looks acquisition alluded Good evening. made and call? the you earlier acquisition website, bit you this Can about a of at to more like Does consulting contribute acquisition if, the you basically company talk it's people. it REAC a this also higher the that the

appreciate I question. the Sure.

advisory this company network the of really a types for them little on from service more all very, perspective sourcing just and projects. that the very data it. from this The community they have is at postal and they an on we valuable we're very postal They've these types different for years, tremendous. space So work you types see knowledge knowledge from management secure have and being on we decades. tremendous to people and help within them. the and spaces is resource all terrific site bolster to are people all the over they principles. and the institutional They have recognition is excited ownership of all I've very institutional within those They're the The the in acquired going adding Their so them. have underwriting, other different that think be times. people them a the has and just for sizes different integrity acquired they and board. really per about and -- we're a a have are to is and and but leasing the levels three of that three really that in community the happy been provided And itself have to involved more principles, we're of stable all is within as leaned consulting that I particular have that to excited the all network well. work that that the ownership brand

And X% personnel increase, of excuse is to much the tied indirect that's versus your the on million to G&A board or X.X% of $X.X G&A hire? me coming how the increase

line think enterprise And the and items. the a acquisition is be of the minimal other they note you, it's investments also the side with part impact we they technology revenue some as as contributor those near for Thanks Bin, to line contributor our ledger bottom on well about hires. term will expect important in in increase other of be that I Thank a that to the two some Rob. incremental be quite are will and while side to well. question to expense systems the item, REAC thing They of that the as

kind So I acquisition of is on type upside? or last any it question streams, this topic, lead guess more, does this one generation revenue come with of

client We engagement that revenue. actually recurring is enterprise are acquiring active, active that has an

will they engaged from clients. continue So, with one to day be

Okay. Thank you.

Gorman go question Our BTIG. next with ahead. from Please Michael comes

just up on Yeah, that follow wanted thanks. I one. to

this, about Can this it? external you're an kind of sounds sense engage management but the So us external resource, how like go within for Is a clients. you thinking that's towards postal it with what's space will give just business guess, that business it within just, sits now future I'm just I within landlord that your for and consulting kind strategic and theoretically another or here. sense the triangulate to the of the what trying angle is of it's

as and the that and parcel business management business of we So will right. advisory be provide part consulting well the

we're so the or going that do of they that's whether properties, development offer. anything for they be for continuing to And services services to postal currently today, offering negotiations or lease that else or offer

will help us their release deal incubator to service. the in so and relationships TRS, the space helping a the us that and to us as with owner to is future right the It resource our with the also community us as their It as postal flow. solidify with and will and would revenue leading also of relationship will help with create the but within this all All just position postal it ownership help also an of service. partner

could post extend generation? or Okay, something think potential this talked Andrew, I of in Is that with then through you with source business as lot extends terms maybe one, as that in that the know office. that lease great. in you've the the lead last And have inducement negotiated the that or structure about you conjunction of past, a well a management I that,

at that do. we services believe that haven't, It's we that the offered haven't we do could something ourselves company, some will offered point to so. public yet. created we, It probably owners. we actually we management But this ability gave haven't It is I when we services to something

for Okay, time. the great. Thanks

Thank you.

you. Thank

question. Please Height with Ed Our next your question comes state from Markets. Capital Groshan

taking you And for Good thank question. afternoon, my gentlemen.

So end me with the just just that that following the on plus I XXX properties. management to up the of services, tail to leads XXX guess

million. a $XXX guidance a You of have

the that So the guidance. But assumption on can just you is not those please? an base I in update give guess us they're still

The is guidance not we've a this or Yeah, include as acquisitions reference in does past. shared Jeremy. part year this the of any for ROFO

soon ROFO, but with have the and report. the share our of of as we don't moment we representatives hear to anything will as the analysts, investors we As from that

there. expectation was there fairly soon went was Okay. just out Can when least the or, could something now in, point was it it is and is guess my at I acquisitions in that came fairly something in SX -- will I public, at was this some guess post or pending happen? and frequently And that is, happen is

time REIT at share we, an to the acquire to these point because at the that don't an of opportunity the did the assets. We intention think I he some for ROFO existed IPO, the of offer. have control

in we're of waiting terms hear So of a from position in representatives timing. the to

time ROFO. to end We come before shared period also offering, a while at has present I, us can seasoning seasoning of on a prepare I on was that opportunities the that has, further with being with I really the the needed to any could presented period clear there an ROFO. representatives have when even color the anticipate that exist And to don't

you for triggers being the talked future. acquisition well, in properties that an are option that and Milwaukee Fantastic. then item the some that would two Okay, are Much And I a Rob, for Can those income in acquired? them guess, in potential you result and just, the about I of line with acquisition guess, for, being line in fee appreciated. the what

an the price. at that have both of option Yeah, USPS buy to those is option the at properties so fixed a properties

the to some them case -- the term, options be which in XXXX. we at they would in, looked as which the interim that. at price, of of we so Milwaukee lowest well looked But buying have have end we've the to is And have do on

more of that other income purchased, the line won't item. but QX see become in was Milwaukee you it fee relevant and asset heavily the that and when it because Regarding line item, for going will more forward, impact

buy to an So post this property. service for the postal back is option

Correct. Okay.

system? And part a it than the small Is that out more post give like something or can is or offices that is a the properties that is me sense what postal a, is, we've you postal seen? prevalent that, in of there,

those themselves out actually leases have we gone a the the case, on the XX's many they time therefore was executed purchase when these lot on. So wanted in there not purchase And of that and, to it. has as as rolled side has in there, finance them is believe in likelihood on Back options network and fairly we service there, a purchasing this err leases them it properties have postal there, of of rolled, as common. And they lease. and But postal options. the of a caution and XX's, particular gave renewed

Okay. out that, Can, Is that can the them of possible option? you is buy

If to they it? sell want

cause two Okay. I like properties there's just I'm I said now just wondering, wondering just it just, I'm it, when… when, I was that.

to us purchase portfolio we this often, we to option, good very for advantage we common. exercise But I looking is This a more a not their a that property This leases. this there our out good You, do is the is have a very of was, if And their purchase us. is, great even accretive. a income us. not very it's exercise very property I business. to is, We're it. of. is then yeah, don't plan think as they it for This do it good take nor on financing bought with like opportunity accretive they was Even This that's it's option, opportunity adding if something a why is was is buy target. very this that that to don't, it, target not not

Yeah. there's for two we in own, only that pro the of financing leases reference your XXXX portfolio. And, and just, our

trying really to why it It answered That, how XX's a right XX's. my and of you is. that that's just in question. back Right, the sense just get And prevalent it right. a Andrew, practice was I'm common

there the management them have asset many properties Is over talked buy to the office opportunity post option them out option can, maybe can to you company. estimate could about, difficulties the there? where asset back? There's would they use do an their an So, has that that given that efficiently. manager is I more these Andrew, run financial the you decades

manage be of they'll I'm may me an if me properties. It their like some sure call. give and opportunity ask a they'd to

Okay. Excellent. Thank you Have good taking for a questions. my evening.

Thank you.

Thank you.

next BTIG, Michael comes ahead. Gorman question with Our please from go

Yeah.

CapEx Sorry, the and we less just lower and any of to does ahead borne quick terms or or only less these funding level, by fleet? a that that at fleet a about property future upgrades the, of need chance even The know post one less just if for of office, follow-up. I kind reexamined, Andrew. that wouldn't traditional they're need talked of have now kind be of properties gas portfolio maybe be front. through, the on they reworked more the go more with and, with that traditional recent you, or, kind obsolescence a into decision for in there the is obsolescence read the to

obsolete an question. don't it that essence tremendously. the believe interesting It's changes I

simple that of what to I And, offices, don't changes they I down that, the they're know know have conversation. their the service these, out that's property don't and located very stick relatively or, I with based. to stations usually stated charging post at I good a potential fleet. I just and don't any with to very charging to going towns effects beforehand. have I counties they're think And in they're property adding positioned and, what make building amount that gas a boxes if doing properties, knows charging investment that didn't know the rolling about other this stations these be and, or it you'd within of ratios. and well of and, postal the bills. as network that I've are only land before, vanilla knock know.

think But I So coming believe that less makes the I electric interesting they're way at it. to go it look them years ability the obsolete. for it's not to an don't in that

Thanks again. great. Okay,

Thank you.

at turn you. the back closing no I'll Thank this questions are And for there management further to floor remarks time.

I of and taking over connecting On with joining the call. We this entire months, all time wanted team, you you the behalf of to look for coming thank the for myself us all to forward for

And thank I'll you. Have disconnect. That par conference. me a concludes today's great day.