Postal Realty Trust, Inc. Q4 FY2024 earnings call

• Strong releasing performance led to full-year AFFO per share of $1.16, up 8.4% year over year.
• Collaborated with Postal Service on a multi-tiered releasing process improving re-leasing timing and efficiency.
• Updated same-store cash NOI guidance for 2025 to 4%-6% vs prior at least 3%.
• Projected 2025 full-year AFFO between $1.20 and $1.22 per share.
• Added $50 million of commitments to term loan maturing in 2028 and increased term loan accordion by $50 million.
• Acquired 197 properties for $91 million in 2024 with weighted average cap rate 7.6%, anticipated 2025 acquisition volume $80-$90 million targeting cap rate ≥7.5%.
• Sold two properties in October 2024 for $6.3 million with weighted average exit cap rate 4.9%.
• In fourth quarter 2024, acquired 63 properties for $31 million adding 176,000 net leasable interior square feet.
• Had one disposition of a vacant property in Indiana, leaving one remaining vacancy.

The company's portfolio includes 1,720 properties with a current occupancy of 99.8%. In 2024, they acquired 197 properties for $91 million at a weighted average cap rate of 7.6%, and in the fourth quarter, acquired 63 properties for $31 million adding 176,000 net leasable interior square feet. Subsequent to quarter-end, they acquired 18 properties for $8.4 million and placed 14 properties under definitive contracts. There was one disposition of a vacant property in Indiana leaving one remaining vacancy. Revenue contribution is tied to the Postal Service leases and related real estate operations.

• Projected 2025 full-year AFFO to be between $1.20 and $1.22 per share.
• Updated same-store cash NOI guidance for 2025 to between 4% and 6% vs prior at least 3%.
• Anticipated acquisition volume in 2025 to be $80 to $90 million and target weighted average cap rate at or above 7.5%.
• Base assumptions for 2025 include $90 million same-store NOI growth between 4%-6% and cash G&A expense between $10.5-$11 million.

Actual results may differ materially from forward-looking statements due to risks beyond the company's control, including those in the company's latest 10-Ks and other SEC filings.

Q: Barry Oxford asked about new postmaster general and lease changes.

A: Andrew Spodek said new postmaster general doesn't change lease documents, they're working well with Postal Service on leasing.

Q: Steven Dumanski asked about Postal Service cost-cutting measures affecting facilities and regional transportation optimization.

A: Andrew Spodek said they track Postal Service press releases and don't believe changes to postal facilities, and take into account shifts in Postal Service when acquiring assets.

Q: Michael Gorman asked about same-store NOI growth offsets.

A: Robert Klein said recurring CapEx and other dynamic factors can adjust, but the main drivers are internal growth and acquisitions.

Q: Jonathan Petersen asked about catch-up rent payments and run rate.

A: Andrew Spodek said 95% of 2023s and 99% of 2024 leases executed, and outlined contractual rent escalators in the presentation.