Postal Realty Trust, Inc. Reports First Quarter 2024 Results
Postal Realty Trust, Inc. reported its first quarter 2024 results, highlighting the acquisition of 29 USPS properties for $18.5 million, a 14% revenue growth, and positive net income figures. The company also raised funds through an ATM program and OP units, maintained 100% rental collection, and declared a quarterly dividend of $0.24 per share. The CEO expressed optimism about the company's performance and acquisition goals for the year.
Acquisition of 29 USPS properties for $18.5 million at a weighted average cap rate of 7.8%
14% revenue growth compared to the first quarter of 2023
Net income attributable to common shareholders of $0.2 million
Funds from Operations (FFO) of $5.5 million, Adjusted Funds from Operations (AFFO) of $6.9 million
Declared a quarterly dividend of $0.24 per share
Strong financial position with no near-term debt maturities and available liquidity
Weighted average rental rates on industrial properties at $3.57 per leasable square foot
Approximately $246 million of net debt with a weighted average interest rate of 4.22%
Issued shares of common stock for total gross proceeds of $8.2 million and common units in the operating partnership for portfolio acquisition
Non-GAAP financial measures such as FFO and AFFO may not be comparable to other REITs
Insights
The acquisition of 29 USPS properties by Postal Realty Trust, Inc. and their reported financial status for the first quarter of 2024 provide a vivid snapshot of the company's strategic growth and financial health. The capitalization rate of
Moreover, the use of an at-the-market equity offering program to raise
Lastly, the company's balance sheet points to prudent financial management, with a healthy mix of fixed-rate debt and available credit facilities. This, combined with the collection of
The declaration of a consistent quarterly dividend of
It is noteworthy that the company has managed to sustain dividend payments while simultaneously expanding its portfolio, which can be seen as a testament to its operational efficiency and strategic financial planning.
An in-depth analysis of Postal Realty Trust's debt profile reveals a disciplined approach toward leverage. The low weighted average interest rate of
The available undrawn revolving credit also provides a buffer for liquidity, granting the trust flexibility to address unforeseen expenditures or to capitalize on emergent strategic opportunities. This financial readiness is a critical aspect for stakeholders as it not only mitigates risk but also underscores the company's readiness for sustainable expansion.
- Acquired 29 USPS Properties for
- Acquired at a Weighted Average Capitalization Rate of
- Raised
- Collected
CEDARHURST, N.Y., May 07, 2024 (GLOBE NEWSWIRE) -- Postal Realty Trust, Inc. (NYSE: PSTL) (the “Company”), an internally managed real estate investment trust that owns and manages over 1,900 properties leased primarily to the United States Postal Service (the “USPS”), ranging from last-mile post offices to industrial facilities, today announced results for the quarter ended March 31, 2024.
Highlights for the Quarter Ended March 31, 2024
- Acquired 29 USPS properties for approximately
$18.5 million , excluding closing costs, at a weighted average capitalization rate of7.8% 14% growth in revenues from first quarter 2023 to first quarter 2024- Net income attributable to common shareholders of
$0.2 million , or$(0.01) per diluted share - Funds from Operations ("FFO") of
$5.5 million , or$0.20 per diluted share - Adjusted Funds from Operations ("AFFO") of
$6.9 million , or$0.25 per diluted share - Subsequent to quarter end, the Company announced a quarterly dividend of
$0.24 per share
"I am pleased with our Company's performance in the first quarter of 2024 as our success in 2023 continued into the current year," stated Andrew Spodek, Chief Executive Officer. "While transaction volumes continue to be lighter in 2024, we added 29 new properties to our portfolio during the quarter for
Property Portfolio & Acquisitions
The Company’s owned portfolio was
During the first quarter, the Company acquired 29 last-mile and flex properties leased to the USPS for approximately
Balance Sheet & Capital Markets Activity
As of March 31, 2024, the Company had approximately
During the first quarter, the Company issued 576,087 shares of common stock through its at-the-market equity offering program for total gross proceeds of approximately
Dividend
On April 30, 2024, the Company declared a quarterly dividend of
Subsequent Events
Subsequent to quarter end and through April 26, 2024, the Company acquired six properties comprising approximately 28,000 net leasable interior square feet for approximately
Webcast and Conference Call Details
The Company will host a webcast and conference call to discuss the first quarter 2024 financial results on Wednesday, May 8, 2024, at 9:00 A.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/Investors/events-and-presentations/default.aspx. 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.
Replay
A telephonic replay of the call will be available starting at 1:00 P.M. Eastern Time on Wednesday, May 8, 2024, through 11:59 P.M. Eastern Time on Wednesday, May 22, 2024, by dialing 1-844-512-2921 in the United States and Canada or 1-412-317-6671 internationally. The passcode for the replay is 13742003.
Non-GAAP Supplemental Financial Information
An explanation of certain non-GAAP financial measures used in this press release, including, FFO, AFFO and net debt, 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 leasing costs that are recurring in nature, excluding expenditures that (i) are for items identified or existing at the time a property was acquired or contributed (including through the Company’s formation transactions), (ii) are part of a strategic plan intended to increase the value or revenue-generating ability of a property, (iii) are for replacements of roof or parking lots, (iv) are considered infrequent or extraordinary in nature, or (v) for casualty damage), acquisition-related expenses (defined as expenses that are incurred for investment purposes and business acquisitions and do not correlate with the ongoing operations of the Company’s existing portfolio, including due diligence costs for acquisitions not consummated and certain professional fees incurred that were directly related to completed acquisitions or dispositions and integration of acquired business) that are not capitalized, and certain other non-recurring expenses and then adding back non-cash items including: write-off and amortization of deferred financing fees, straight-line rent and other adjustments (including lump sum catch up amounts for increased rents, net of any lease incentives), fair value lease adjustments, income on insurance recoveries from casualties, non-real estate depreciation and amortization 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.
The Company calculates its net debt as total debt less cash and property-related reserves. Net debt as of March 31, 2024 is calculated as total debt of approximately
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 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 anticipated growth and ability to obtain financing and 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, 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 that owns and manages over 1,900 properties leased primarily to the USPS. More information is available at postalrealtytrust.com.
Contact:
Investor Relations and Media Relations
Email: Investorrelations@postalrealtytrust.com
Phone: 516-232-8900
| Postal Realty Trust, Inc. Consolidated Statements of Operations (Unaudited) (In thousands, except share and per share data) | |||||||
| For the Three Months Ended March 31, | |||||||
| 2024 | 2023 | ||||||
| Revenues: | |||||||
| Rental income | $ | 16,604 | $ | 14,499 | |||
| Fee and other | 683 | 649 | |||||
| Total revenues | 17,287 | 15,148 | |||||
| Operating expenses: | |||||||
| Real estate taxes | 2,302 | 1,983 | |||||
| Property operating expenses | 2,353 | 1,624 | |||||
| General and administrative | 4,292 | 4,159 | |||||
| Depreciation and amortization | 5,301 | 4,837 | |||||
| Total operating expenses | 14,248 | 12,603 | |||||
| Income from operations | 3,039 | 2,545 | |||||
| Other income | 50 | 114 | |||||
| Interest expense, net: | |||||||
| Contractual interest expense | (2,637 | ) | (2,045 | ) | |||
| Write-off and amortization of deferred financing fees | (181 | ) | (165 | ) | |||
| Interest income | 1 | — | |||||
| Total interest expense, net | (2,817 | ) | (2,210 | ) | |||
| Income before income tax expense | 272 | 449 | |||||
| Income tax expense | (16 | ) | (16 | ) | |||
| Net income | 256 | 433 | |||||
| Net income attributable to operating partnership unitholders’ non-controlling interests | (50 | ) | (85 | ) | |||
| Net income attributable to common stockholders | $ | 206 | $ | 348 | |||
| Net (loss) income per share: | |||||||
| Basic and Diluted | $ | (0.01 | ) | $ | 0.00 | ||
| Weighted average common shares outstanding: | |||||||
| Basic and Diluted | 22,045,310 | 19,294,896 | |||||
| Postal Realty Trust, Inc. Consolidated Balance Sheets (Unaudited) (In thousands, except par value and share data) | |||||||
| March 31, 2024 | December 31, 2023 | ||||||
| Assets | |||||||
| Investments: | |||||||
| Real estate properties, at cost: | |||||||
| Land | $ | 112,504 | $ | 106,074 | |||
| Building and improvements | 456,270 | 443,470 | |||||
| Tenant improvements | 7,075 | 6,977 | |||||
| Total real estate properties, at cost | 575,849 | 556,521 | |||||
| Less: Accumulated depreciation | (47,216 | ) | (43,791 | ) | |||
| Total real estate properties, net | 528,633 | 512,730 | |||||
| Investment in financing leases, net | 16,018 | 16,042 | |||||
| Total real estate investments, net | 544,651 | 528,772 | |||||
| Cash | 1,898 | 2,235 | |||||
| Escrow and reserves | 791 | 632 | |||||
| Rent and other receivables | 4,527 | 4,750 | |||||
| Prepaid expenses and other assets, net | 14,999 | 13,369 | |||||
| Goodwill | 1,536 | 1,536 | |||||
| Deferred rent receivable | 1,643 | 1,542 | |||||
| In-place lease intangibles, net | 13,701 | 14,154 | |||||
| Above market leases, net | 342 | 355 | |||||
| Total Assets | $ | 584,088 | $ | 567,345 | |||
| Liabilities and Equity | |||||||
| Liabilities: | |||||||
| Term loans, net | $ | 198,885 | $ | 198,801 | |||
| Revolving credit facility | 16,000 | 9,000 | |||||
| Secured borrowings, net | 32,730 | 32,823 | |||||
| Accounts payable, accrued expenses and other, net | 9,372 | 11,996 | |||||
| Below market leases, net | 13,811 | 13,100 | |||||
| Total Liabilities | 270,798 | 265,720 | |||||
| Commitments and Contingencies | |||||||
| Equity: | |||||||
| Class A common stock, par value | 226 | 219 | |||||
| Class B common stock, par value | — | — | |||||
| Additional paid-in capital | 294,878 | 287,268 | |||||
| Accumulated other comprehensive income | 6,888 | 4,621 | |||||
| Accumulated deficit | (53,860 | ) | (48,546 | ) | |||
| Total Stockholders’ Equity | 248,132 | 243,562 | |||||
| Operating partnership unitholders’ non-controlling interests | 65,158 | 58,063 | |||||
| Total Equity | 313,290 | 301,625 | |||||
| Total Liabilities and Equity | $ | 584,088 | $ | 567,345 | |||
| Postal Realty Trust, Inc. Reconciliation of Net Income to FFO and AFFO (Unaudited) (In thousands, except share and per share data) | |||
| For the Three Months Ended March 31, 2024 | |||
| Net income | $ | 256 | |
| Depreciation and amortization of real estate assets | 5,274 | ||
| FFO | $ | 5,530 | |
| Recurring capital expenditures | (150 | ) | |
| Write-off and amortization of deferred financing fees | 181 | ||
| Straight-line rent and other adjustments | (142 | ) | |
| Fair value lease adjustments | (743 | ) | |
| Acquisition-related and other expenses | 112 | ||
| Income on insurance recoveries from casualties | (50 | ) | |
| Non-real estate depreciation and amortization | 27 | ||
| Non-cash components of compensation expense | 2,126 | ||
| AFFO | $ | 6,891 | |
| FFO per common share and common unit outstanding | $ | 0.20 | |
| AFFO per common share and common unit outstanding | $ | 0.25 | |
| Weighted average common shares and common units outstanding, basic and diluted | 28,066,647 | ||
FAQ
<p>How many USPS properties did Postal Realty Trust acquire in the first quarter of 2024?</p>
Postal Realty Trust acquired 29 USPS properties during the first quarter of 2024.
<p>What was the average capitalization rate of the properties acquired by Postal Realty Trust?</p>
The acquired properties had a weighted average capitalization rate of 7.8%.
<p>What was the revenue growth percentage for Postal Realty Trust from the first quarter of 2023 to the first quarter of 2024?</p>
Postal Realty Trust experienced a 14% revenue growth from the first quarter of 2023 to the first quarter of 2024.
<p>How much was the quarterly dividend declared by Postal Realty Trust?</p>
Postal Realty Trust declared a quarterly dividend of $0.24 per share of Class A common stock.
<p>What is the net debt amount for Postal Realty Trust as of March 31, 2024?</p>
Postal Realty Trust had approximately $246 million of net debt as of March 31, 2024.
