Postal Realty Trust (PSTL) 8 May 242024 Q1 Earnings call transcript

Ladies and gentlemen, greetings, and welcome to the Postal Realty Trust First Quarter 2024 Earnings Conference Call. [Operator Instructions] As a reminder, this conference is being recorded.

I would now like to turn the conference over to your host, Mr. Jordan Cooperstein, Vice President of FP&A, Capital Markets. Please go ahead, sir.

morning, good and you, everyone. Thank Realty Welcome Conference Quarter Earnings First to Postal Call. XXXX Trust's

call Andrew Officer; On Officer; we today, the have President; Chief Officer. Klein, Brandwein, Jeremy Spodek, Robert Chief Matt Financial and Accounting Garber, Executive Chief

Securities provisions forward-looking in statements Please on Reform call, the are Litigation are historical covered this that the considered are harbor statements facts note by statements may and XXXX. are for forward-looking. of conference contained company not the Private forward-looking use statements which These Act safe forward-looking

Actual other company results the the risks be a filings. may but in its future new disclaims Exchange differ those latest events beyond described statements, any specifically and to, of of control, company's materially affected forward-looking otherwise. XX-K does in assume from limited and obligation variety are as contained Securities not will The statements that to including, any update factors information, and or whether those by forward-looking and Commission and result not a company's the

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

a comparable release measures non-GAAP of reconciliation the most company's to currently You these and find GAAP can the tabular in materials. measures financial earnings supplemental

will I over to of Trust. Andrew the that, now With call Officer turn Realty Spodek, Chief Postal Executive

into year. you us. current pleased in I'm continued thank has that joining and for success morning, the Good XXXX our

activity million on average X.X%, average Our average cap full weighted XX of acquisitions achieve year. We $XX added year a million above X.X% to $XX rate and at for ahead our of us first rate last cap quarter a period pace track same of acquisition and weighted guidance rate. our weighted the slightly or cap XXXX has properties year-to-date were at

as many sourced existing believe ample best, flow cash of estate partnership operating remains credit the within what postal real year they our on target environment, opportunity from since of management. range every space. owner on for the to we sellers our premier the of under this taxable the assets exposure and backbone the revolving exchange management business. acquiring we postal operator maintain maintaining the they sellers to availability deferring eliminate property facility. Despite niche our gains. Relationships are prospects, they we When uncertainty and in which rates, IPO, are demonstrating property While our treasury in current heavily many more brokered the on less are encouraged demonstrated focused movements not has that real by I market some immune in from attractive to is common sellers arise. operating sheet the we tracked time to are have relationships postal active opportunities and $XX XX-year sectors. we which Realty positioned the I'm pipeline and well issuances, interest our We to of volatility transaction keeping well in estate our new ensure remain have this improving real potential currency team balance of while our are allows that as our million and pursue the a for from again almost managing done raised combination do equity This of they estate responsibilities partnership trust unit while day-to-day in stock disciplined leverage units, capital years. Postal macro focused entire the and they are

the attended attended Realty life. and of our is this personally we most of others, Association I roughly past Conference. strong, relationships ways dialogue One of many market. stay month, few owners. Due Annual States along believe senior acquisitions by over for members with XXXX long-running front well of connections. Last to of in I Lessors target been buyer, It's Postal my the see natural And developing come with our the United owners of new long-lasting of assets we all these asset cultivate efforts, have important conference have as we as to that years Postal maintain to sourced many internally. opportunity our an the as XX%

now confident industry and XXX% maturities, our contractual to rates, significant in call to committed retention tenants over positioned high near-term a business largest and we debt XXXX. collect are network. With our are as turn We continue irreplaceable no and both of team, importance properties rents our flows, we occupancy of the exemplifying owner the maintain and Jeremy. successful predictable cash of leadership a as I'll for postal the this

Andrew. you, Thank

on Postal usual Realty at The focused attractive first business was flex last postal remain well-utilized properties. we as acquiring quarter as and mile

properties inclusive acquisitions last contracts. flex added under acquired totaling feet XX square of square the XX,XXX properties properties. from to feet to XX net quarter X during properties portfolio, our definitive feet square mile million additional interior quarter from an and XX XXX,XXX Our end, and $X.X $X.X XX,XXX company placed leasable million the Subsequent for

prior on as stated remains economic consistent cash the each quarter calls, model cycles. As business through business reliable company's flow our and stable generates

runway prospects owner us space. this in We the by and as of opportunity encouraged ahead largest have of long are a our growth

diligence importance maintained logistics have network. a are both the vital due This serve. and years, of locations Service process the these this reflects XX-plus retention We rate they which that and historical the the XX% over lease Postal properties average weighted identifying our to past validates communities strategic to crucial

our to results. We next to our leases the XXXX provide Postal to continue update now Service over an work the quarter and turn to on to the expired call call. hope I'll earnings financial with execute hard discuss first Rob

Thank call. us today's everyone, you, on joining thank for Jeremy, you, and

acquire from diluted $XX and of share. delivered FFO of of first assets. We operations we from funds $X.XX AFFO million or equity approximately funds continued raised per and the or to $X.XX adjusted During quarter, accretively operations

We have exposure rate leverage low our minimized maintained variable debt. to and

$XXX $XX well of target maturities comprised X maturity and quarter, credit average rate end the to interest first X.XX%, million outstanding, below had at debt our debt significant debt Xx. company's weighted of senior At million years facility debt average of the our fixed EBITDA of a unsecured outstanding The XX% XXXX. borrowings. within of rate no all weighted a and was Net adjusted annualized revolving X.Xx, until

During issued stock program of XXX,XXX price through approximately an ATM totaling common gross $XX.XX average shares quarter, offering share, of per million. of the at we our first proceeds $X.X

within a $XX.XX Additionally, in XXX,XXX was a operating anticipated of our we issued common acquisition. CapEx nearly part price of of unit units $XXX,XXX $XXX,XXX. Recurring consideration portfolio partnership to $XXX,XXX, as range at our per for

depending anticipate Looking timing of forward we the projects. the figure to be QX, $XXX,XXX and between on $XXX,XXX to

the came first expense in our within G&A range Cash stated for quarter.

cash of revenue years, prior a continue basis. percentage an annual prioritize decreasing G&A in as to we as on Just

expect the cash to For full $X.X $X.X be expense year total XXXX, and million G&A we between million.

dividend $X.XX per quarterly the increase a a QX approved has Directors of from share, XXXX dividend. X.X% Board of representing Our

hard assets flow our our we of estate scaling space During in continue This a and the foundation for market the to new collected and first flows business the from leader execute improving of the significant to contractual our the quarter, differentiator predictability cash acquiring in to we as remains existing record operations our rents. cash our plan XXX% be business. and properties. strong work, solid we postal real addition Thanks company of of track proven

Operator? the now we'd any remarks. concludes take our to open like may prepared questions to That And have. line you

with JPMorgan. is Our first the question Paolone of line Anthony Instructions] from [Operator

step how are leases to in if along anticipate XX-some-odd the starting on up wondering and you not us guess with could and/or you new whether I negotiations coming you last with year leases new just the leases. achieve able bumps update on the way or holdover rents contractual were

say though them getting that is next to it's just And completed, negotiations. hard bumps than you with to Tony, for mutually the this being This longer to better a to fluid come I quarter. have we're could is well, working we annual process. we're actually resolve it's to acceptable towards it working have I We're done the Service would completed solution. can't a until wish still and what commit Everything Andrew. a anticipated. and hope update those taking even is we Postal going I with very

like be think, this bit like or given be, tough we the and of smoother? Andrew, a there always counterparty, negotiation will the think so you process Do you changing out look is process? a years, that the kind faster the just Do could into future as that process

over answer is the So life of where to of past resolve with situations my we've dealing it the that Postal Service the this. in had than these types anticipated longer takes

years, issues. make way until that we the don't commit I get We place, more are end these hopeful that the And currently future in Postal we'll Service it's working to it result. have so with efficient, to it can't to I'm but that

our regardless, But been collecting rents. we've

rents they had negotiated that When rents. the we continue the will We when collect difference the do do expired. it, pay to in and leases resolve our we

complete a And matter as possible. them quickly to so as it's just trying of

just Okay. And last then me. one for

come having of the kind the for that process would of the you for like that what be spend quarter? along if you you range the line, quarter also finish get that, anything in leases $XXX,XXX do You would over holdover with you back incremental $XXX,XXX, mentioned outside and the the CapEx anticipate anticipated XQ. year that to in half of these But that outlined

Rob. the term. changes the really don't that releasing or Yes. -- on on I Thanks, we is anticipate Tony. based This in acquisitions don't guidance near

the guidance come for hold. Then will So future forward quarters. that guidance we'll next with quarter,

line the Steven Dumanski [Operator Janney Instructions] question Our from Scott. with of comes next Montgomery

of I the the earlier comments. transaction market addressed opening state know that the was in

get just insight. So wanted to I more

potential do the an macro of a how With environment, the overall motivated or pipeline what going increase And you the currently? forward? project, decrease velocity in acquisition sellers are

deal Sellers to I adjust now, question. that but with We're of guidance them way. to acquire year the year. an appreciate velocity accretive to am rates to pick are adjust rates and our cap in having want we're not their will they still our the up, we across are maintaining market. sellers we of basis motivated, to to $XX try to entire as of the the on adjusting the cap extent as the up where places that to motivated progresses. deals hopeful are right deal-by-deal million them able inch But guidance I they're for a maybe

ability refinance current Is That interest environment the golden macro the in essentially? and was to pullback more bank is the postal the having a their assets ticket regarding, very Or financing impacting small helpful. And just rate owner one debt USPS the lease I another the when environment. higher-for-longer expires? guess, in for still the on

on postal refinance much estate them, higher least able at if flex but rate. coming are a With said, very being they're heavily to that due, sellers space. the that So facilities mortgages a and real do at last have mile market, the not obviously financed is

financed space, that to be not major consider And so because for not typically normally heavily a while it's flow. people deal would motivating factor a of selling, it's driver a

next Petersen Instructions] of from is line question [Operator Our the Jon with Jefferies.

next you that us where portfolio percent and expect the built trend your the you as over years? annual what number renew to these of has all few next over Could -- leases remind escalators in you

It's entire an Yes, vintage that we It Jon. the place. expire that in of Jeremy. leases XXXX put was escalator

on now. And deals we're going [indiscernible] forward right and working

Yes.

expectation So is are the leases. -- X-year typically these because

X that in fast we down that the in have guys of inflation friction bit? a that forward there now be have if coming will is So you XXX% future, the escalators? years future portfolio getting expectation in years and Or of will annual there is kind the

Yes.

the on properties. it's operate think cost really that conversation depends the of a kind inflation I to fluid and

the when we will so can't for. that's to leases But something that definitely having negotiating And of all appropriate, be I an commit it's future escalator.

you. Thank

As Andrew? for comments. closing to now Spodek I questions, hand Andrew over conference there no are his further the

your opportunity to time the and look support future forward of behalf the and entire in We're the to taking today. business in On remain you the market. confident what join the strong, The team, and business the our brings. specialized for we of model us fundamentals we thank

Let's your connect months. Thank for upcoming the time. you in again

Trust conference you. of Thank your participation. Realty The now concluded. for has Postal Thank you

your lines. You may now disconnect