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UNITED STATES

SECURITIES AND EXCHANGE COMMISSION

Washington, D.C. 20549

 

FORM 8-K

 

CURRENT REPORT

 

PURSUANT TO SECTION 13 OR 15(d)

OF THE SECURITIES EXCHANGE ACT OF 1934

 

Date of Report (Date of earliest event reported): February 26, 2025

 

POSTAL REALTY TRUST, INC.

(Exact name of registrant as specified in its charter)

 

Maryland   001-38903   83-2586114
(State or other jurisdiction of
Incorporation or organization)
  Commission File Number   (I.R.S. Employer
Identification No.)

 

75 Columbia Avenue

Cedarhurst, NY 11516

(Address of principal executive offices and zip code)

 

(516) 295-7820

(Registrant’s telephone number)

 

Not Applicable

 

(Former Name or Former Address, if Changed Since Last Report)

 

Check the appropriate box below if the Form 8-K filing is intended to simultaneously satisfy the filing obligation of the registrant under any of the following provisions (see General Instruction A.2. below):

 

Written communications pursuant to Rule 425 under the Securities Act (17 CFR 230.425)
   
Soliciting material pursuant to Rule 14a-I2 under the Exchange Act (17 CFR 240.14a-12)
   
Pre-commencement communications pursuant to Rule 14d-2(b) under the Exchange Act (17 CFR 240.I4d-2(b))
   
Pre-commencement communications pursuant to Rule 13e-4(c) under the Exchange Act (17 CFR 240.13e-4(c))

 

Securities registered pursuant to Section 12(b) of the Act:

 

Title of each class   Trading Symbol(s)   Name of each exchange on which registered
Class A Common Stock, par value $0.01 per share   PSTL   New York Stock Exchange

 

Indicate by check mark whether the registrant is an emerging growth company as defined in Rule 405 of the Securities Act of 1933 (§230.405 of this chapter) or Rule 12b-2 of the Securities Exchange Act of 1934 (§240.12b-2 of this chapter).

 

Emerging growth company ☐

 

If an emerging growth company, indicate by check mark if the registrant has elected not to use the extended transition period for complying with any new or revised financial accounting standards provided pursuant to Section 13(a) of the Exchange Act. ☐

 

 

 

 


 

Item 2.02. Results of Operations and Financial Condition.

 

Postal Realty Trust, Inc. (the “Company”) issued a press release on February 26, 2025 announcing its financial results for the year ended December 31, 2024. A copy of the press release is furnished herewith and attached hereto as Exhibit 99.1.

 

The information in this Item 2.02 and Exhibit 99.1 attached hereto shall not be deemed “filed” for purposes of Section 18 of the Securities Exchange Act of 1934, as amended (the “Exchange Act”), or otherwise subject to the liabilities of that section and shall not be deemed incorporated by reference in any filing made by the Company under the Securities Act of 1933, as amended, or the Exchange Act except as set forth by specific reference in such filing.

 

Item 9.01. Financial Statements and Exhibits.

 

(d) Exhibits.

 

Exhibit No.   Document
99.1   Press Release of Postal Realty Trust, Inc., dated February 26, 2025.
104   Cover Page Interactive Data File (embedded within the Inline XBRL document)

 

1


 

SIGNATURE

 

Pursuant to the requirements of the Securities Exchange Act of 1934, the registrant has duly caused this report to be signed on its behalf by the undersigned hereunto duly authorized.

 

Date: February 26, 2025

 

  POSTAL REALTY TRUST, INC.
     
  By: /s/ Jeremy Garber
    Name:  Jeremy Garber
    Title: President and Treasurer

 

2

 

EX-99.1 2 ea023227201ex99-1_postal.htm PRESS RELEASE OF POSTAL REALTY TRUST, INC., DATED FEBRUARY 26, 2025

Exhibit 99.1

 

 

POSTAL REALTY TRUST, INC. REPORTS FOURTH QUARTER AND YEAR END 2024 RESULTS

 

- Introduces 2025 AFFO Guidance of $1.20 to $1.22 per diluted share -

- Executed New Leases with 3% Annual Rent Escalations & Ten-Year Term -

- 2024 Acquisitions of $91 Million at an Average Capitalization Rate of 7.6% -

- Raised Dividend per share for Seventh Consecutive Year -

 

Cedarhurst, New York, February 26, 2025 (GLOBE NEWSWIRE) — Postal Realty Trust, Inc. (NYSE: PSTL) (the “Company”), an internally managed real estate investment trust that owns and manages over 2,000 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 and year ended December 31, 2024.

 

Highlights for the Quarter Ended December 31, 2024

 

  Acquired 63 USPS properties for approximately $30.7 million, excluding closing costs
     
  Net income attributable to common shareholders was $4.5 million, or $0.17 per diluted share
     
  Funds from Operations (“FFO”) was $9.0 million, or $0.30 per diluted share
     
  Adjusted Funds from Operations (“AFFO”) was $10.6 million, or $0.35 per diluted share
     
  Subsequent to quarter end, the Company raised the quarterly dividend to $0.2425 per share, a 1.0% increase over the fourth quarter 2023 dividend

 

Highlights for the Year Ended December 31, 2024

 

  Acquired 197 properties for approximately $91 million in 2024, excluding closing costs
     
  Rental income increased 20.0% from 2023 to 2024, reflecting internal growth and acquisitions
     
  Net income attributable to common shareholders was $6.6 million, or $0.21 per diluted share
     
  FFO was $28.1 million, or $0.97 per diluted share
     
  AFFO was $33.7 million, or $1.16 per diluted share
     
  Paid aggregate dividends of $0.96 per share for calendar year 2024
     
  Added $50 million to the term loan maturing in February 2028 and increased the term loan accordion feature under the credit facilities by $50 million
     
  Executed new leases for 95% of the 2023 and 99% of the 2024 aggregate expired rent as of February 14, 2025 and remaining leases are in process
     
  Agreed to new rents on all negotiated leases with the USPS for leases that expired and those set to expire in 2025 except for some recent 2024 acquisitions

 

“2024 was a strong operational year for the Company defined by successful re-leasing including 3% annual rent escalations and the introduction of 10-year lease terms fueling our internal growth,” said Andrew Spodek, Chief Executive Officer. “I am pleased that this contributed to 2024 AFFO of $1.16 per share, an 8.4% increase from 2023. Our success during 2024 has provided us with the visibility to provide AFFO guidance for the first time as a public company of $1.20 to $1.22 per diluted share for 2025. Postal Realty is well positioned for continued internal and external growth, and we remain confident in the strength of our partnership with the Postal Service.”

 

1


 

Property Portfolio & Acquisitions

 

The Company’s owned portfolio was 99.6% occupied, comprised of 1,703 properties across 49 states and one territory with approximately 6.4 million net leasable interior square feet and a weighted average rental rate of $10.60 per leasable square foot based on rents in place as of December 31, 2024. The weighted average rental rate consisted of $12.81 per leasable square foot on last-mile and flex properties and $3.83 on industrial properties.

 

During the fourth quarter, the Company acquired 63 last-mile and flex properties leased to the USPS for approximately $30.7 million, excluding closing costs, comprising approximately 176,000 net leasable interior square feet at a weighted average rental rate of $13.75 per leasable square foot based on rents in place as of December 31, 2024.

 

Leasing

 

As of February 14, 2025, the Company had received 89 fully executed new leases from the USPS representing 95% of the aggregate 2023 expired rent and 119 fully executed new leases from the USPS representing 99% of the aggregate 2024 expired rent. All executed leases were subject to 3% annual rent escalations. The total net lump sum catch-up payment received from the USPS related to the 2023 leases was approximately $3.0 million, comprised of $2.6 million for leases executed during 2024 and $0.4 million for leases executed subsequent to quarter end. The total net lump sum catch-up payment received from the USPS related to the 2024 leases was approximately $0.4 million, comprised of $0.4 million for leases executed during 2024. The Company has agreed to rents for new leases with the USPS for leases expired and those set to expire in 2025 not subject to renewal options.

 

Balance Sheet & Capital Markets Activity

 

As of December 31, 2024, the Company had approximately $2.4 million of cash and property-related reserves, and approximately $296 million of net debt with a weighted average interest rate of 4.35%. At the end of the fourth quarter, 95% of the Company’s debt outstanding was set to fixed rates (when taking into account interest rate hedges), and the Company’s $150 million revolving credit facility had $136 million undrawn.

 

On October 25, 2024, the Company amended its credit facilities to, among other things, add $50.0 of commitments to the term maturing in February 2028, increase the accordion feature under the credit facilities for term loans to $50.0 million and replace Bank of Montreal with Truist Bank as the administrative agent. $40.0 million was drawn by the Company on the closing date of the transaction and $10.0 million remained undrawn and available on a delayed-draw basis. In connection with the $40.0 million draw, the Company also entered into an interest rate swap that effectively fixed the interest rate through February 2028 at a current rate of 5.27%. On November 21, 2024, the Company drew $10.0 million on the term loan maturing in February 2028. In connection with the draw, the Company entered into an interest rate swap that effectively fixed the interest rate through February 2028 at a current rate of 5.55%. The proceeds from the draws were used to repay the outstanding balance on the revolving credit facility.

 

2


 

During the year, the Company issued 1,420,791 shares of common stock through its at-the-market equity offering program at an average price of $14.35 per share for total gross proceeds of $20.4 million. Additionally, the Company issued 664,182 common units in its operating partnership as part of the consideration for acquisitions at an average price per unit of $14.17.

 

Dividend

 

On January 30, 2025, the Company declared a quarterly dividend of $0.2425 per share of Class A common stock. The dividend equates to $0.97 per share on an annualized basis. The dividend will be paid on February 28, 2025 to stockholders of record as of the close of business on February 14, 2025.

 

Subsequent Events

 

Subsequent to quarter end and through February 14, 2025, the Company acquired 18 properties comprising approximately 53,000 net leasable interior square feet for approximately $8.4 million, excluding closing costs. The Company had another 14 properties totaling approximately $8.9 million under definitive contracts.

 

The Company also announced today that its Board of Directors approved a common stock repurchase program (the “Program”). Under the Program, the Company may acquire shares of the Company’s Class A Common Stock, $0.01 par value per share (“Class A Common Stock”), in the open market, from time to time, in block trades, or otherwise, for a total purchase price of up to $25,000,000 all in accordance with U.S. securities laws and regulations, including Rule 10b-18 under the U.S. Securities Exchange Act of 1934, as amended. The Program does not require the Company to repurchase any dollar amount or number of shares of Class A Common Stock and may be suspended or discontinued at any time.

 

2025 Guidance

 

The Company currently expects 2025 AFFO per share on a fully diluted basis to be within a range of $1.20 to $1.22. The guidance range includes an estimate for investment volume of $80 to $90 million, and Cash G&A expense of $10.5 million to $11.0 million.

 

Note: The Company does not provide guidance with respect to the most directly comparable GAAP financial measure or provide reconciliations to GAAP from its forward-looking non-GAAP financial measure of AFFO per share guidance due to the inherent difficulty of forecasting the effect, timing and significance of certain amounts in the reconciliation that would be required by Item 10(e)(1)(i)(B) of Regulation S-K. Examples of these amounts include impairments of assets, gains and losses from sales of assets, and depreciation and amortization from new acquisitions or developments. In addition, certain non-recurring items may also significantly affect net income but are generally adjusted for in AFFO. Based on our historical experience, the dollar amounts of these items could be significant, and could have a material impact on the Company’s GAAP results for the guidance period.

 

3


 

Webcast and Conference Call Details

 

The Company will host a webcast and conference call to discuss the fourth quarter 2024 financial results on Thursday, February 27, 2025, 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 Thursday, February 27, 2025, through 11:59 P.M. Eastern Time on Thursday, March 13, 2025, by dialing 1-844-512-2921 in the United States and Canada or 1-412-317-6671 internationally. The passcode for the replay is 13750499.

 

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 considered infrequent or extraordinary in nature, or (iv) 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/(expenses) on insurance recoveries from casualties, casualty losses, 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.

 

4


 

The Company calculates its net debt as total debt less cash and property-related reserves. Net debt as of December 31, 2024 is calculated as total debt of approximately $298 million less cash and property-related reserves of approximately $2.4 million.

 

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, our 2025 guidance, 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 2,000 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

 

5


 

Postal Realty Trust, Inc.

Consolidated Statements of Operations

(in thousands, except per share data)

 

    For the Three Months
Ended December 31,
    For the Twelve Months
Ended December 31,
 
    2024     2023     2024     2023  
Revenues:                  
Rental income   $ 20,403     $ 16,271     $ 73,143     $ 60,970  
Fee and other     965       730       3,229       2,742  
Total revenues     21,368       17,001       76,372       63,712  
Operating expenses:                                
Real estate taxes     2,676       2,448       9,850       8,549  
Property operating expenses     2,117       1,870       9,124       6,825  
General and administrative     3,912       3,533       16,008       14,654  
Casualty and impairment losses, net     188             404        
Depreciation and amortization     5,627       5,151       22,202       19,688  
Total operating expenses     14,520       13,002       57,588       49,716  
                                 
Gain on sale of real estate assets     2,393             2,393        
                                 
Income from operations     9,241       3,999       21,177       13,996  
                                 
Other (expense)/income     (53 )     195       21       679  
                                 
Interest expense, net:                                
Contractual interest expense     (3,270 )     (2,546 )     (12,041 )     (9,339 )
Write-off and amortization of deferred financing fees     (204 )     (182 )     (746 )     (686 )
Interest income     13       4       26       5  
Total interest expense, net     (3,461 )     (2,724 )     (12,761 )     (10,020 )
                                 
Income before income tax expense     5,727       1,470       8,437       4,655  
Income tax expense     (42 )     (16 )     (116 )     (72 )
                                 
Net income     5,685       1,454       8,321       4,583  
Net income attributable to operating partnership unitholders’ non-controlling interests     (1,180 )     (270 )     (1,725 )     (874 )
                                 
Net income attributable to common stockholders   $ 4,505     $ 1,184     $ 6,596     $ 3,709  
                                 
Net income per share:                                
Basic and Diluted   $ 0.17     $ 0.04     $ 0.21     $ 0.12  
                                 
Weighted average common shares outstanding:                                
Basic and Diluted     23,130,477       21,396,955       22,565,155       20,145,151  

 

6


 

Postal Realty Trust, Inc.

Consolidated Balance Sheets

(In thousands, except par value and share data)

 

    December 31,
2024
    December 31,
2023
 
Assets            
Investments:            
Real estate properties, at cost:            
Land   $ 128,457     $ 106,074  
Building and improvements     512,248       443,470  
Tenant improvements     7,501       6,977  
Total real estate properties, at cost     648,206       556,521  
Less: Accumulated depreciation     (58,175 )     (43,791 )
Total real estate properties, net     590,031       512,730  
Investment in financing leases, net     15,951       16,042  
Total real estate investments, net     605,982       528,772  
Cash     1,799       2,235  
Escrow and reserves     744       632  
Rent and other receivables     6,658       4,750  
Prepaid expenses and other assets, net     14,519       13,369  
Goodwill     1,536       1,536  
Deferred rent receivable     2,639       1,542  
In-place lease intangibles, net     12,636       14,154  
Above market leases, net     305       355  
Total Assets   $ 646,818     $ 567,345  
                 
Liabilities and Equity                
Liabilities:                
Term loans, net   $ 248,790     $ 198,801  
Revolving credit facility     14,000       9,000  
Secured borrowings, net     33,918       32,823  
Accounts payable, accrued expenses and other, net     16,441       11,996  
Below market leases, net     16,171       13,100  
Total Liabilities     329,320       265,720  
                 
Commitments and Contingencies                
                 
Equity:                
Class A common stock, par value $0.01 per share; 500,000,000 shares authorized, 23,494,487 and 21,933,005 shares issued and outstanding as of December 31, 2024 and December 31, 2023, respectively     235       219  
Class B common stock, par value $0.01 per share; 27,206 shares authorized, 27,206 shares issued and outstanding as of December 31, 2024 and December 31, 2023            
Additional paid-in capital     310,031       287,268  
Accumulated other comprehensive income     5,230       4,621  
Accumulated deficit     (64,211 )     (48,546 )
Total Stockholders’ Equity     251,285       243,562  
Operating partnership unitholders’ non-controlling interests     66,213       58,063  
Total Equity     317,498       301,625  
Total Liabilities and Equity   $ 646,818     $ 567,345  

 

7


 

Postal Realty Trust, Inc.

Reconciliation of Net Income to FFO and AFFO

(Unaudited)

(In thousands, except share data)

 

    For the Three
Months Ended December 31,
2024
    For the Twelve
Months Ended December 31,
2024
 
Net income   $ 5,685     $ 8,321  
Depreciation and amortization of real estate assets     5,600       22,095  
Gain on sale of real estate assets     (2,393 )     (2,393 )
Impairment charges     68       68  
FFO   $ 8,960     $ 28,091  
Recurring capital expenditures     (184 )     (723 )
Write-off and amortization of deferred financing fees and amortization of debt discount     206       749  
Straight-line rent and other adjustments     719       1,585  
Fair value lease adjustments     (808 )     (3,178 )
Acquisition-related and other expenses     122       396  
Expenses (income) on insurance recoveries from casualties     53       (21 )
Non-real estate depreciation and amortization     27       107  
Casualty losses, net     120       336  
Non-cash components of compensation expense     1,377       6,377  
AFFO   $ 10,592     $ 33,719  
FFO per common share and common unit outstanding   $ 0.30     $ 0.97  
AFFO per common share and common unit outstanding   $ 0.35     $ 1.16  
Weighted average common shares and common units outstanding, basic and diluted     29,860,647       29,036,504  

 

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