Postal Realty Trust, Inc. Q1 FY2026 earnings call

Andrew Spodek mentioned over the past seven years, the company has built a purpose - built platform for U.S. postal real estate. They are on track for 6.1% average annual AFFO per share growth from 2021 to 2026. They are sharing forward - looking top - line revenue outlook for 2027, expecting same - store cash revenue growth of approx. 6.5% in 2027. They increased acquisition guidance to $130 - $140 million for the year, with $52 million already acquired in the first half. Steve Babacki discussed multi - year earnings growth drivers: mark - to - market opportunity, annual rent escalators, retained cash flow, and day - one accretion. Jeremy Garber provided an update on leasing efforts, with all 2020 rents agreed and 2027 expirations in lease production, and 53% of leases having annual rent escalators. First quarter acquisitions were 61 properties for $34.6 million at 7.4% cap rate.

They raised AFFO per share guidance range to $1.40 - $1.42 per share for 2026, representing 6.8% growth at midpoint. Increased acquisition guidance to $130 - $140 million for 2026. Cash G&A and same store cash NOI tracking in line with forecast. Recurring capital expenditures expected to be $150,000 - $200,000 in second quarter. Guidance includes approx. one cent per share diluted impact from unsettled forward equity. Board increased quarterly dividend to 24.5 cents per share, 1% increase from last year.

Q: What drove the decision to provide 2027 revenue guidance and how about same - store cash NOI?

A: Steve said it's due to having high visibility into 2027 lease expirations with USPS; hard to see same - store cash NOI early in 2026 but expenses expected in 5% range.

Q: Break down 2027 revenue guidance components?

A: Steve said 25% of 6.5% growth is from escalators, remainder from mark - to - market.

Q: Total addressable market and acquisition opportunity?

A: Andrew said runway is long with $1.4 billion rent from Postal Service making $12 - $15 billion market, aiming for $6 - $8 billion.

Q: Color on mark - to - market between controlled assets and acquired?

A: Andrew said opportunity varies deal by deal, underwrite each deal individually.

Q: Cause of increased acquisition guidance?

A: Andrew said based on access and cost of capital.

Q: Impact of stock price on sellers?

A: Jeremy said only change is sellers' motivation due to buzz and stock price.

Q: Mark - to - market between controlled and acquired assets?

A: Andrew said opportunity set varies deal by deal.

Q: Amazon contract implications?

A: Jeremy said contract renewed, no impact on business.

Q: Impediment to full net lease pass - through of expenses?

A: Jeremy said postal service lease structure has been in place long, government agency has difficulty with full pass - through on insurance.

Q: Color on private placement debt cost?

A: Steve said cost depends on duration, 5 - 10 year could be low 5% to low 6% range