Postal Realty Trust, Inc. · NYSE:PSTL
Postal Realty Trust — Investor Presentation (May 2022)
31 slides from Postal Realty Trust's investor presentation, May 11, 2022
Slide 1: Investing in America's Logistics Network
INVESTING IN AMERICA’S LOGISTICS NETWORK MAY 11, 2022
Slide 2: Only publicly traded REIT focused on properties leased to the USPS
AS THE ONLY PUBLICLY TRADED REAL ESTATE INVESTMENT TRUST FOCUSED ON PROPERTIES LEASED TO THE USPS, POSTAL REALTY TRUST (NYSE: PSTL) IS AT THE INTERSECTION OF REAL ESTATE AND CRITICAL LOGISTICS INFRASTRUCTURE. PSTL HAS THE SCALE, INDUSTRY KNOWLEDGE AND SEASONED TEAM TO CONSOLIDATE THIS HIGHLY FRAGMEN
Slide 3: Uniquely Positioned for Compelling Growth
PSTL INVESTMENT OVERVIEW UNIQUELY POSITIONED FOR COMPELLING GROWTH o Singularly positioned to consolidate and institutionalize large fragmented market o Critical logistics infrastructure supporting e-commerce and last-mile delivery o Stable, government-backed tenant with high retention rate o Attrac
Slide 4: Poised to Consolidate the USPS Logistics Network
ABOUT PSTL POISED TO CONSOLIDATE THE USPS LOGISTICS NETWORK o We are the nation’s largest owner and manager of properties leased to the USPS o We are the first and only publicly traded REIT focusing primarily on the acquisition and management of properties leased to the United States Postal Service
Slide 5: Highly Fragmented Market, Ripe for Consolidation
MARKET OPPORTUNITY HIGHLY FRAGMENTED MARKET, RIPE FOR CONSOLIDATION TOTAL MARKET SIZE 278M SQUARE FEET o PSTL’s portfolio represents ~6% of the market1 PRIVATELY OWNED o Over 17,000 different lessors of 84M SQUARE FEET properties leased to the USPS o Next top 20 portfolio owners OWNED BY PSTL combin
Slide 6: Significant Opportunity to Gain Considerable Market Share
MARKET OPPORTUNITY SIGNIFICANT OPPORTUNITY TO GAIN CONSIDERABLE MARKET SHARE LAST-MILE1 FLEX2 INDUSTRIAL < 2,500 interior sq. ft. 2,500 – 50,000 interior sq. ft. 50,000+ interior sq. ft. USPS MARKET USPS MARKET USPS MARKET 18.4MINT SQ FT 44.3MINT SQ FT 21.5M INT SQ FT PSTL 871K Interior Sq. Ft. PSTL
Slide 7: Uniquely Qualified to Consolidate the Market
MARKET OPPORTUNITY UNIQUELY QUALIFIED TO CONSOLIDATE THE MARKET 2021 Deal Flow 24% EXTERNALLY SOURCED DRIVERS OF DEAL FLOW: o Long-standing relationships within the industry 76% o Reputation—active buyers for 30 years, well-known as the largest owner and a INTERNALLY SOURCED trusted resource1 o Expe
Slide 8: USPS's Irreplaceable Logistics Network
MARKET ATTRIBUTES USPS’S IRREPLACEABLE LOGISTICS NETWORK CRITICAL INFRASTRUCTURE SUPPORTS E-COMMERCE AND LAST-MILE DELIVERY o Amazon, UPS, FedEx, and DHL all tap into the USPS’s logistics AS E-COMMERCE HAS network every day GROWN, THE USPS’ o USPS’s unmatched logistics network has high barriers to e
Slide 9: Stable Credit Tenant with Consistently High Retention
STABLE GOVERNMENT TENANT STABLE CREDIT TENANT WITH CONSISTENTLY HIGH RETENTION 98.8% 100.0% 100.0% 100.0% 99.4% 99.3% 99.2% 98.4% 97.8% Historical Weighted Average Lease Retention Rate1 96.9% 96.7% 96.3% Federal government-backed credit USPS operating lease payments represented only 1.7% of the USPS
Slide 10: Favorable Lease Structure
STABLE GOVERNMENT TENANT FAVORABLE LEASE STRUCTURE LEASE STRUCTURE: INFLATION PROTECTIONS: o Most commonly five years in term ✓ Lease term allows the opportunity for renewals at market rents o Various forms of modified double net leases (typical USPS responsibilities include real ✓ Tenant responsibl
Slide 11: Compelling Drivers Behind Total Shareholder Return
ATTRACTIVE STRATEGY RETURN PROFILE COMPELLING DRIVERS BEHIND TOTAL SHAREHOLDER RETURN ACCRETIVE ACQUISITIONS NOI GROWTH DIVIDEND o CURRENT DEAL FLOW WITHIN o LEASE RENEWALS o CURRENT ANNUALIZED 6% TO 8% CAP RATE RANGE CONTRIBUTING TO POSITIVE DIVIDEND RATE OF $0.92 NOI GROWTH PER SHARE o PROVEN RECO
Slide 12: Strategy in Action
ATTRACTIVE RETURN PROFILE STRATEGY IN ACTION o Continuously acquire core USPS last-mile and flex properties, o Target to acquire buildings at or below replacement cost coupled with opportunistic industrial properties o History of efficient acquisitions and expedited closings o Disciplined underwriti
Slide 13: Meaningful Growth Since IPO
ATTRACTIVE RETURN PROFILE MEANINGFUL GROWTH SINCE IPO Property Count Interior Square Feet Annualized Base Rent1 +285% +440% +369% AFFO (in dollars)2 Dividend2 +445% +64% Note: Figures as of May 6, 2022; portfolio statistics reflect owned properties. 1) Annualized contractually specified cash base re
Slide 14: Lease Expirations Provide Opportunity to Drive NOI Growth
ATTRACTIVE RETURN PROFILE LEASE EXPIRATIONS PROVIDE OPPORTUNITY TO DRIVE NOI GROWTH YEAR NUMBER OF LEASES SQUARE FEET ANNUAL RENT1 % OF TOTAL RENT1 2022 83 275,099 $2,459,960 6.3% 2023 73 559,991 $3,461,808 8.8% 2024 81 451,039 $4,476,186 11.4% 2025 165 1,086,168 $7,079,218 18.1% 2026 197 882,958 $8
Slide 15: Large Portfolio of Postal Assets
PORTFOLIO LARGE PORTFOLIO OF POSTAL ASSETS 1,040 Properties Owned 397 Additional Under Management 49States1 4.7M Interior Sq. Ft. 99.7% Occupancy 4 YEARS Weighted Average Lease Term2 Note: Figures as of May 6, 2022, for PSTL’s owned portfolio. 1) Owned portfolio includes one property located in Puer
Slide 16: Geographically Diversified
PORTFOLIO GEOGRAPHICALLY DIVERSIFIED ANNUALIZED BASE RENT BY REGION1 PORTFOLIO MAP2 11% 30% 33% 26% MIDWEST NORTHEAST SOUTH WEST Note: As of May 6, 2022; portfolio statistics reflect owned properties; South region includes one property located in Puerto Rico. (1) Annualized contractually specified c
Slide 17: Portfolio by Asset Class
PORTFOLIO PORTFOLIO BY ASSET CLASS LAST-MILE1 PROPERTIES UNDER 2,500 INTERIOR SQUARE FEET Property Count Interior Sq. Ft. Annualized Base Rent Annualized Base Rent PSF 673 871K $9.1M $10.42 FLEX2 PROPERTIES 2,500-50,000 INTERIOR SQUARE FEET Property Count Interior Sq. Ft. Annualized Base Rent Annual
Slide 18: Select Last-Mile
PORTFOLIO SELECT LAST-MILE HIGHLAND FALLS, NY BISHOP, VA o ~2,300 sq. ft. facility that serves the West Point o Part of an approximately 11,000 sq. ft. portfolio Military Academy, with nearly three million of well-utilized postal assets across six states tourists visit each year o Acquired from a lo
Slide 19: Select Flex
PORTFOLIO SELECT FLEX RIO GRANDE CITY, TX CARSON, CA o ~4,400 sq. ft. facility with 31 employees, 18 o ~17,000 sq. ft. facility with 84 employees and routes and over 1,000 PO boxes rented 46 routes, covering a diversified demographic o Located near the U.S. – Mexico border and vital in the LA Metro
Slide 20: Select Industrial
PORTFOLIO SELECT INDUSTRIAL WARRENDALE, PA MILWAUKEE, WI o One of only 12 privately-owned processing & o ~575,000 sq. ft. USPS logistics hub with distribution centers sized over 300,000 sq. ft. in strategic location in Downtown Milwaukee the United States along mixed-use corridor o Modern logistic f
Slide 21: Total Capitalization
CAPITAL STRUCTURE TOTAL CAPITALIZATION o 90% of assets are unencumbered by secured debt(2) Total Capitalization $45 Revolver Unsecured o Unsecured credit facilities $509M bank facilities comprising: $50 Term Loan • $150M revolving credit facility Total Debt with $150M accordion $33 Other Debt $128M
Slide 22: Low Leverage
CONSERVATIVE BALANCE SHEET LOW LEVERAGE TARGETS: BELOW 40% NET DEBT TO ENTERPRISE VALUE BELOW 7.0X NET DEBT TO ANNUALIZED ADJUSTED EBITDA 12.0x 45.0% Net Debt to Enterprise Value Net Debt to Annualized Adjusted EBITDA 40.0% 10.0x 35.0% 8.0x 27.2% 30.0% 24.9% 25.9% 23.0% 25.0% 6.0x 20.0% 16.7% 4.0x 4
Slide 23: Decades of Experience and Institutional Knowledge
LEADERSHIP DECADES OF EXPERIENCE AND INSTITUTIONAL KNOWLEDGE Andrew Spodek Chief Executive Officer o Founder and CEO o More than 20 years of experience focused on investing in and managing USPS properties o Serves on the board of directors of the Association of United States Postal Lessors Jeremy Ga
Slide 24: Board and Executive Team Well-Aligned with Shareholders' Interest
ENVIRONMENTAL, SOCIAL & GOVERNANCE (ESG) BOARD AND EXECUTIVE TEAM WELL-ALIGNED WITH SHAREHOLDERS’ INTEREST ~10% 100% of the outstanding equity interest in Postal Realty Trust owned by management of C-Suite incentive compensation elected to be received in restricted and board stock or LTIP units 25
Slide 25: Strong Governance Supported by Experienced Board
ENVIRONMENTAL, SOCIAL & GOVERNANCE (ESG) STRONG GOVERNANCE SUPPORTED BY EXPERIENCED BOARD o Independent Board of Directors led by former Postmaster General as non-executive Chair of the Board o 20% of the Board of Directors are female o Board diversity policy o Continuous board self-evaluations and
Slide 26: Committed to Corporate Responsibility and Sustainable Business Practices
ENVIRONMENTAL, SOCIAL & GOVERNANCE (ESG) COMMITTED TO CORPORATE RESPONSIBILITY AND SUSTAINABLE BUSINESS PRACTICES ENVIRONMENTAL RESPONSIBILITY SOCIAL RESPONSIBILITY o Multi-disciplinary ESG committee, including o Focused on ensuring PSTL employee welfare, several senior executives, steering the ESG
Slide 27: Disclaimer and Forward-Looking Statements
DISCLAIMER AND FORWARD-LOOKING STATEMENTS This presentation regarding Postal Realty Trust, Inc. (the “Company”) contains “forward-looking statements.” Forward-looking statements include statements identified by words such as “could,” “may,” “might,” “will,” “likely,” “anticipates,” “intends,” “plans
Slide 28: Appendix
APPENDIX 29
Slide 29: Debt Statistics
Appendix DEBT STATISTICS Debt Statistics ($ in thousands) Q1 2022 Q4 2021 Q3 2021 Q2 2021 Q1 2021 Market Capitalization Debt Principal $123,105 $96,193 $127,697 $115,725 $97,754 Cash 5,958 5,857 3,997 4,936 3,314 Escrow & Reserves 1,261 1,077 884 1,141 1,109 Net Debt 115,886 89,259 122,816 109,648 9
Slide 30: Adjusted EBITDA Reconciliation
Appendix ADJUSTED EBITDA RECONCILIATION EBITDA ($ in thousands) Q1 2022 Q4 2021 Q3 2021 Q2 2021 Q1 2021 Net income $721 $933 $676 $823 $126 Contractual interest expense 686 739 734 621 645 Write-off and amortization of deferred financing fees 129 129 295 145 145 Loss on early extinguishment of debt
Slide 31: Definitions
Appendix DEFINITIONS Earnings before Interest Tax and Depreciation and Amortization (EBITDA) and Adjusted EBITDA The Company computes EBITDA as earnings before interest, income taxes, depreciation and amortization. The Company presents EBITDA as it is a measure commonly used in its industry and the
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