- Oops!Something went wrong.Please try again later.
- Acquired 54 USPS Properties for $25.8 Million -
- Strengthened Capital Structure to Support Ongoing Execution of Growth Plan -
- Collected 100% of Rents and Maintained 100% Occupancy -
Postal Realty Trust, Inc. (NYSE:PSTL) (the "Company"), an internally managed real estate investment trust (REIT) that owns and manages approximately 1,200 properties leased to the USPS, ranging from last mile post offices to larger industrial facilities, today announced results for the quarter ended March 31, 2021.
Highlights for Quarter Ended March 31, 2021 and Subsequent Events
Completed acquisitions of 54 properties for $25.8 million, excluding closing costs
Grew quarterly rental income 73% year-over-year, reflecting accretive property acquisitions
Net income allocable to common shareholders was $0.1 million or $0.00 per diluted share
Funds from Operations was $3.3 million, or $0.21 per diluted share
Adjusted Funds from Operations was $4.3 million, or $0.27 per diluted share
Raised $57.0 million of gross proceeds through a marketed equity offering
Repaid $13.7 million of mortgage financings
Executed early renewal for 135 properties that were scheduled to expire in 2022 under a master lease and extended maturity to February 2027
Subsequent to quarter-end, raised quarterly dividend to $0.22 per share representing a 10% increase from the quarterly dividend a year ago
Andrew Spodek, Postal Realty Trust’s Chief Executive Officer commented, "We are off to a strong start to 2021, executing important lease renewals, closing on 54 properties, strengthening our balance sheet and positioning the Company to continue to build upon its growth trajectory. Our results this quarter continue to demonstrate the power of our platform and the efficiency of our operating model. Our properties comprise an important element of our Nation’s infrastructure and we are poised to grow through additional acquisitions of last mile, flex, and industrial USPS properties."
Property Portfolio & Acquisitions
The Company’s portfolio is 100% occupied, comprised of 780 properties across 47 states with approximately 3.4 million net leasable interior square feet and a weighted average rental rate of $8.56 per leasable square foot, as of March 31, 2021.
During the first quarter, the Company acquired 54 properties leased to the USPS for $25.8 million, excluding closing costs, comprising approximately 686,000 net leasable interior square feet.
Subsequent to quarter-end and through May 4, 2021, the Company acquired 13 properties comprising approximately 39,000 net leasable interior square feet for approximately $5.4 million, excluding closing costs and currently has 52 properties totaling approximately $18.5 million under definitive contract, that also include Operating Partnership units as part of the consideration.
In January 2021, the Company received and executed an early renewal notice for 135 properties under a master lease that was scheduled to expire on February 28, 2022 extending the maturity to February 28, 2027. Reflecting this lease transaction, and further renewals and acquisitions completed through May 4, 2021, the Company’s weighted average lease term is 4.0 years.
Balance Sheet & Capital Markets Activity
In January 2021, the Company raised approximately $57.0 million in gross proceeds from the sale of approximately 3.7 million shares of its Class A common stock. Proceeds were used for general corporate purposes, which included the acquisition of additional properties, capital expenditures related to the properties in its portfolio, and the repayment of indebtedness under the Company’s credit facility.
In February 2021, the Company repaid two mortgage financings totaling $13.7 million with an interest rate of 4.25%.
As of March 31, 2021, the Company had cash of $3.3 million on the balance sheet, and $93.3 million of net debt with a weighted average interest rate of 2.2% and a fixed charge coverage ratio of 7.3x.
On April 30, 2021, the Company declared a quarterly dividend of $0.22 per share of Class A common stock. The dividend equates to $0.88 per share on an annualized basis. The Company has consecutively increased its dividend each quarter since the Company’s IPO in 2019. The dividend will be paid on May 28, 2021 to stockholders of record as of the close of business on May 14, 2021.
Webcast and Conference Call Details
Postal Realty Trust will host a webcast and conference call to discuss the first quarter 2021 financial results on May 11, 2021 at 5:00 P.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/QuarterlyResults. 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. The conference ID for the call is 13719491.
A telephonic replay of the call will also be available from 8:00 P.M. Eastern Time on May 11, 2021, through 11:59 P.M. Eastern Time on May 25, 2021 by dialing 1-844-512-2921 in the United States and Canada or 1-412-317-6671 internationally and entering passcode 13719491.
Non-GAAP Supplemental Financial Information
An explanation of certain non-GAAP financial measures used in this press release, including, Funds from Operations ("FFO") and Adjusted Funds from Operations ("AFFO"), 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 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, beginning with Q3 2020, leasing costs that are recurring in nature, excluding beginning with Q2 2020, as a policy change all capital improvements that are planned at the acquisition of a property or obtaining a lease or lease renewal) and acquisition related expenses (defined as acquisition-related expenses that are incurred for investment purposes and do not correlate with the ongoing operations of the Company’s existing portfolio, including due diligence costs for acquisitions not consummated and certain auditing and accounting fees incurred that were directly related to completed acquisitions or dispositions) that are not capitalized and then adding back non-cash items including: non-real estate depreciation, loss on extinguishment of debt, write-off and amortization of debt issuance costs, straight-line rent and other adjustments (beginning with the three months ended September 30, 2020, including lump sum catch up payments for increased rents), fair value lease adjustments, income on insurance recoveries from casualties (beginning with Q4 2020) 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.
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 regarding the proposed public offering and other statements identified by words such as "could," "may," "might," "will," "likely," "anticipates," "intends," "plans," "seeks," "believes," "estimates," "expects," "continues," "projects" and similar references to future periods, or by the inclusion of forecasts or projections. Forward-looking statements, including, among others, statements regarding the Company’s ability to obtain financing, and the Company’s ability to 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, economic and financial conditions as a result of the ongoing COVID-19 pandemic, 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 (REIT) that owns and manages approximately 1,200 properties leased to the USPS, ranging from last mile post offices to larger industrial facilities. More information is available at postalrealty.com.
Postal Realty Trust, Inc.
For the Three Months Ended
Fee and other income
Real estate taxes
Property operating expenses
General and administrative
Depreciation and amortization
Total operating expenses
Income (loss) from operations
Interest expense, net:
Contractual interest expense
Write-off and amortization of deferred financing fees
Loss on early extinguishment of debt
Total interest expense, net
Income (loss) before income tax expense
Income tax expense
Net income (loss)
Net (income) loss attributable to Operating Partnership unitholders’ non-controlling interests
Net income (loss) attributable to common stockholders
Net income (loss) per share:
Basic and Diluted
Weighted average common shares outstanding:
Basic and Diluted
Postal Realty Trust, Inc.
Real estate properties, at cost:
Buildings and improvements
Total real estate properties, at cost
Less: Accumulated depreciation
Total real estate properties, net
Investment in financing lease, net
Rent and other receivables
Prepaid expenses and other assets, net
Escrows and reserves
Deferred rent receivable
In-place lease intangibles, net
Above market leases, net
Liabilities and Equity
Secured borrowings, net
Revolving credit facility
Accounts payable, accrued expenses and other
Below market leases, net
Commitments and Contingencies
Class A common stock, par value $0.01 per share; 500,000,000 shares authorized, 13,326,514 and 9,437,197 shares issued and outstanding as of March 31, 2021 and December 31, 2020, respectively
Class B common stock, par value $0.01 per share; 27,206 shares authorized: 27,206 shares issued and outstanding as of March 31, 2021 and December 31, 2020
Additional paid-in capital
Total Stockholders’ Equity
Operating Partnership unitholders’ non-controlling interests
Total Liabilities and Equity
Postal Realty Trust, Inc.
Depreciation and amortization of real estate assets
Recurring capital expenditures
Amortization of debt issuance costs
Loss on extinguishment of debt
Straight-line rent and other adjustments
Fair value lease adjustments
Acquisition related expenses
Income on insurance recoveries from casualties
Non-cash components of compensation expense
FFO per common share and common unit outstanding
AFFO per common share and common unit outstanding
Weighted average common shares and common units outstanding, basic and diluted
View source version on businesswire.com: https://www.businesswire.com/news/home/20210511006179/en/
Investor Relations and Media Relations