Postal Realty Trust Inc

Previous wording

We were formed as a Maryland corporation on November 19, 2018 and commenced operations upon completion of our initial public offering and the related formation transactions. We conduct our business through a traditional UPREIT structure in which our properties are owned by our Operating Partnership directly or through limited partnerships, limited liability companies or other subsidiaries. During the six months ended June 30, 2024, we acquired 99 properties leased to the USPS for approximately $47.7 million, including closing costs. As of June 30, 2024, our portfolio consists of 1,607 owned properties, located in 49 states and one territory and comprising approximately 6.2 million net leasable interior square feet.

Current wording

We were formed as a Maryland corporation on November 19, 2018 and commenced operations upon completion of our initial public offering and the related formation transactions. We conduct our business through a traditional UPREIT structure in which our properties are owned by our Operating Partnership directly or through limited partnerships, limited liability companies or other subsidiaries. During the nine months ended September 30, 2024, we acquired 134 properties leased to the USPS for approximately $61.4 million, including closing costs. As of September 30, 2024, our portfolio consists of 1,642 owned properties, located in 49 states and one territory and comprising approximately 6.3 million net leasable interior square feet.

Previous wording

We are the sole general partner of our Operating Partnership through which our properties are directly or indirectly owned. As of August 2, 2024, we owned approximately 79.4% of outstanding common units of limited partnership interest in our Operating Partnership (the “OP Units”), including long term incentive units of our Operating Partnership (the “LTIP Units”). Our Board of Directors oversees our business and affairs.

Current wording

We are the sole general partner of our Operating Partnership through which our properties are directly or indirectly owned. As of November 4, 2024, we owned approximately 79.1% of outstanding common units of limited partnership interest in our Operating Partnership (the “OP Units”), including long term incentive units of our Operating Partnership (the “LTIP Units”). Our Board of Directors oversees our business and affairs.

Previous wording

On November 4, 2022, we entered into separate open market sale agreements for our at-the-market offering program (the "ATM Program") with each of Jefferies LLC, BMO Capital Markets Corp., Stifel, Nicolaus & Company, Incorporated and Truist Securities, Inc., as agents, pursuant to which we may offer and sell, from time to time, shares of our Class A common stock having an aggregate sales price of up to $50.0 million. The agreements also provide that we may enter into one or more forward sale agreements under separate master forward confirmations and related supplemental confirmations with affiliates of certain agents. On August 8, 2023, we amended the ATM Program to increase the aggregate offering amount under the program from up to $50.0 million to up to $150.0 million. During the six months ended June 30, 2024, 634,080 shares were issued under the ATM Program for approximately $9.0 million in gross proceeds. As of June 30, 2024, we had approximately $105.0 million of availability remaining under the ATM Program.

Current wording

On November 4, 2022, we entered into separate open market sale agreements for our at-the-market offering program (the "ATM Program") with each of Jefferies LLC, BMO Capital Markets Corp., Stifel, Nicolaus & Company, Incorporated and Truist Securities, Inc., as agents, pursuant to which we may offer and sell, from time to time, shares of our Class A common stock having an aggregate sales price of up to $50.0 million. The agreements also provide that we may enter into one or more forward sale agreements under separate master forward confirmations and related supplemental confirmations with affiliates of certain agents. On August 8, 2023, we amended the ATM Program to increase the aggregate offering amount under the program from up to $50.0 million to up to $150.0 million. During the nine months ended September 30, 2024, 1,235,346 shares were issued under the ATM Program for approximately $17.7 million in gross proceeds. As of September 30, 2024, we had approximately $96.4 million of availability remaining under the ATM Program.

Previous wording

As of June 30, 2024, we owned a portfolio of 1,607 properties located in 49 states and one territory and leased primarily to the USPS. For the six months ended June 30, 2024, approximately 12.2% of our total rental income was concentrated in Pennsylvania.

Current wording

As of September 30, 2024, we owned a portfolio of 1,642 properties located in 49 states and one territory and leased primarily to the USPS. For the nine months ended September 30, 2024, approximately 12.2% of our total rental income was concentrated in Pennsylvania.

Previous wording

All equity-based compensation expense is recognized in our Consolidated Statements of Operations and Comprehensive Income as components of general and administrative expense and property operating expenses. We issue share-based awards to align our directors' and employees’ interests with those of our investors.

Current wording

All equity-based compensation expense is recognized in our Consolidated Statements of Operations and Comprehensive (Loss) Income as components of general and administrative expense and property operating expenses. We issue share-based awards to align our directors' and employees’ interests with those of our investors.

Previous wording

Our credit facilities (the "Credit Facilities") consist of a $150.0 million senior unsecured revolving credit facility (the "Revolving Credit Facility"), a $75.0 million senior unsecured term loan facility (the "2021 Term Loan") and a $125.0 million senior unsecured term loan facility (the "2022 Term Loan"). We intend to use the Credit Facilities for working capital purposes, which may include repayment of mortgage indebtedness, property acquisitions and other general corporate purposes. We amortize on a non-cash basis the deferred financing costs associated with our debt to interest expense using the straight-line method, which approximates the effective interest rate method over the terms of the related loans. Any changes to the debt structure, including debt financing associated with property acquisitions, could materially influence the operating results depending on the terms of any such indebtedness.

Current wording

Our credit facilities (the "Credit Facilities") consist of a $150.0 million senior unsecured revolving credit facility (the "Revolving Credit Facility"), a $75.0 million senior unsecured term loan facility (the "2021 Term Loan") and a $125.0 million senior unsecured term loan facility (the "2022 Term Loan"). On October 25, 2024, we amended the Credit Facilities (the "Third Amendment") to, among other things, replaces the Bank of Montreal with Truist Bank as the administrative agent, letter of credit issuer and swingline lender. In addition, the third amendment increases the 2022 Term Loan commitments in an aggregate principal amount of up to $50.0 million in which we further exercised $40.0 million under the 2022 Term Loan, and on a delayed-draw basis, $10.0 million. We intend to use the Credit Facilities for working capital purposes, which may include repayment of mortgage indebtedness, property acquisitions and other general corporate purposes. We amortize on a non-cash basis the deferred financing costs associated with our debt to interest expense using the straight-line method, which approximates the effective interest rate method over the terms of the related loans. Debt discounts represent fair value adjustments to account for the difference between the stated rates and market rates of debt assumed or entered in connection with our property acquisitions. The debt premiums discounts are amortized to interest expense over the term of the related loans using the straight-line method, which approximates the effective-interest rate method. Any changes to the debt structure, including debt financing associated with property acquisitions, could materially influence the operating results depending on the terms of any such indebtedness.

Previous wording

As of July 29, 2024, the leases at 83 of our properties, representing approximately 701,000 net leasable interior square feet, had expired and the USPS was occupying such properties as a holdover tenant. As of the date of this report, the USPS had not vacated or notified us of its intention to vacate any of these properties. When a lease expires, the USPS becomes a holdover tenant on a month-to-month basis typically paying the greater of estimated market rent or the rent amount under the expired lease.

Current wording

As of November 4, 2024, the leases at 17 of our properties, representing approximately 500,000 net leasable interior square feet, had expired and the USPS was occupying such properties as a holdover tenant. As of the date of this report, the USPS had not vacated or notified us of its intention to vacate any of these properties. When a lease expires, the USPS becomes a holdover tenant on a month-to-month basis typically paying the greater of estimated market rent or the rent amount under the expired lease.

Previous wording

Rental income – Rental income includes net rental income as well as the recovery of certain operating costs and property taxes from tenants. Rental income increased by $2.6 million to $17.4 million for the three months ended June 30, 2024 from $14.8 million for the three months ended June 30, 2023, primarily due to the volume of our acquisitions.

Current wording

Rental income – Rental income includes net rental income as well as the recovery of certain operating costs and property taxes from tenants. Rental income increased by $3.4 million to $18.8 million for the three months ended September 30, 2024 from $15.4 million for the three months ended September 30, 2023, primarily due to the volume of our acquisitions.

Previous wording

Real estate taxes – Real estate taxes increased by $0.4 million to $2.4 million for the three months ended June 30, 2024 from $2.0 million for the three months ended June 30, 2023, primarily due to the volume of our acquisitions.

Current wording

Real estate taxes – Real estate taxes increased by $0.4 million to $2.5 million for the three months ended September 30, 2024 from $2.1 million for the three months ended September 30, 2023, primarily due to the volume of our acquisitions.

Previous wording

Property operating expenses – Property operating expenses increased by $0.7 million to $2.1 million for the three months ended June 30, 2024 from $1.4 million for the three months ended June 30, 2023. Property management expenses are included within property operating expenses and increased by $0.2 million to $0.7 million for the three months ended June 30, 2024 from $0.5 million for the three months ended June 30, 2023. The remainder of the increase in property operating expenses of $0.5 million was related to an increase in insurance and repairs and maintenance expenses.

Current wording

Property operating expenses – Property operating expenses increased by $0.6 million to $2.5 million for the three months ended September 30, 2024 from $1.9 million for the three months ended September 30, 2023. Property management expenses are included within property operating expenses and increased by $0.1 million to $0.7 million for the three months ended September 30, 2024 from $0.6 million for the three months ended September 30, 2023. The remainder of the increase in property operating expenses of $0.5 million was related to an increase in insurance and repair and maintenance expenses.

Previous wording

General and administrative– General and administrative expenses increased by $0.3 million to $3.9 million for the three months ended June 30, 2024 from $3.6 million for the three months ended June 30, 2023, primarily due to an increase in net compensation costs, partially offset by a decrease in public company-related expenses.

Current wording

General and administrative– General and administrative expenses increased by $0.5 million to $3.9 million for the three months ended September 30, 2024 from $3.4 million for the three months ended September 30, 2023, primarily due to an increase in net compensation costs, partially offset by a decrease in public company-related expenses.

Previous wording

Depreciation and amortization – Depreciation and amortization expense increased by $0.7 million to $5.5 million for the three months ended June 30, 2024 from $4.8 million for three months ended June 30, 2023, primarily due to the volume of our acquisitions.

Current wording

Depreciation and amortization – Depreciation and amortization expense increased by $0.9 million to $5.8 million for the three months ended September 30, 2024 from $4.9 million for three months ended September 30, 2023, primarily due to the volume of our acquisitions.

Previous wording

Other income primarily includes insurance recoveries related to property damage claims. Other income decreased by $0.1 million to $0.02 million for the three months ended June 30, 2024 from $0.1 million for the three months ended June 30, 2023, primarily due to a decrease in property related insurance recoveries from claims.

Current wording

Other income primarily includes insurance recoveries related to property damage claims. Other income decreased by $0.2 million to $0.01 million for the three months ended September 30, 2024 from $0.2 million for the three months ended September 30, 2023, primarily due to a decrease in property related insurance recoveries from claims.

Previous wording

During the three months ended June 30, 2024, we incurred total interest expense, net of $3.1 million compared to $2.5 million for the three months ended June 30, 2023. The increase in interest expense was primarily due to additional borrowings under the Credit Facilities and increased interest rates.

Current wording

During the three months ended September 30, 2024, we incurred total interest expense, net of $3.4 million compared to $2.6 million for the three months ended September 30, 2023. The increase in interest expense was primarily due to additional borrowings under the Credit Facilities and increased interest rates.

Previous wording

Rental income– Rental income includes net rental income as well as the recovery of certain operating costs and property taxes from tenants. Rental income increased by $4.7 million to $34.0 million for the six months ended June 30, 2024 from $29.3 million for the six months ended June 30, 2023, primarily due to the volume of our acquisitions.

Current wording

Rental income– Rental income includes net rental income as well as the recovery of certain operating costs and property taxes from tenants. Rental income increased by $8.0 million to $52.7 million for the nine months ended September 30, 2024 from $44.7 million for the nine months ended September 30, 2023, primarily due to the volume of our acquisitions.

Previous wording

Real estate taxes – Real estate taxes increased by $0.7 million to $4.7 million for the six months ended June 30, 2024 from $4.0 million for the six months ended June 30, 2023, primarily due to the volume of our acquisitions.

Current wording

Real estate taxes – Real estate taxes increased by $1.1 million to $7.2 million for the nine months ended September 30, 2024 from $6.1 million for the nine months ended September 30, 2023, primarily due to the volume of our acquisitions.

Previous wording

Property operating expenses – Property operating expenses increased by $1.4 million to $4.5 million for the six months ended June 30, 2024 from $3.0 million for the six months ended June 30, 2023. Property management expenses are included within property operating expenses and increased by $0.3 million to $1.6 million for the six months ended June 30, 2024 from $1.3 million for the six months ended June 30, 2023. The remainder of the increase of $1.1 million is related to expenses for repairs and maintenance and insurance, which increase is due to the volume of our acquisitions.

Current wording

Property operating expenses – Property operating expenses increased by $2.0 million to $7.0 million for the nine months ended September 30, 2024 from $5.0 million for the nine months ended September 30, 2023. Property management expenses are included within property operating expenses and increased by $0.4 million to $2.3 million for the nine months ended September 30, 2024 from $1.9 million for the nine months ended September 30, 2023. The remainder of the increase of $1.7 million is related to expenses for repairs and maintenance and insurance, which increase is due to the volume of our acquisitions.

Previous wording

General and administrative– General and administrative expenses increased by $0.4 million to $8.2 million for the six months ended June 30, 2024 from $7.8 million for the six months ended June 30, 2023 primarily due to an increase in net compensation costs, partially offset by a decrease in public company-related expenses.

Current wording

General and administrative– General and administrative expenses increased by $1.0 million to $12.1 million for the nine months ended September 30, 2024 from $11.1 million for the nine months ended September 30, 2023 primarily due to an increase in net compensation costs, partially offset by a decrease in public company-related expenses.

Previous wording

Depreciation and amortization – Depreciation and amortization expense increased by $1.2 million to $10.8 million for the six months ended June 30, 2024 from $9.6 million for the six months ended June 30, 2023, primarily due to the volume of our acquisitions.

Current wording

Depreciation and amortization – Depreciation and amortization expense increased by $2.1 million to $16.6 million for the nine months ended September 30, 2024 from $14.5 million for the nine months ended September 30, 2023, primarily due to the volume of our acquisitions.

Previous wording

Other income primarily includes insurance recoveries related to property damage claims. Other income decreased by $0.2 million to $0.1 million for the six months ended June 30, 2024 from $0.2 million for the six months ended June 30, 2023, primarily due to lower insurance recoveries.

Current wording

Other income primarily includes insurance recoveries related to property damage claims. Other income decreased by $0.4 million to $0.1 million for the nine months ended September 30, 2024 from $0.5 million for the nine months ended September 30, 2023, primarily due to lower insurance recoveries.

Previous wording

During the six months ended June 30, 2024, we incurred total interest expense, net of $5.9 million compared to $4.7 million for the six months ended June 30, 2023. The increase in interest expense is primarily related due to additional borrowings under the Credit Facilities and increased interest rates.

Current wording

During the nine months ended September 30, 2024, we incurred total interest expense, net of $9.3 million compared to $7.3 million for the nine months ended September 30, 2023. The increase in interest expense is primarily related due to additional borrowings under the Credit Facilities and increased interest rates.

Previous wording

We had $1.7 million of cash and $0.9 million of escrows and reserves as of June 30, 2024 compared to $2.2 million of cash and $0.8 million of escrows and reserves as of June 30, 2023.

Current wording

We had $1.0 million of cash and $0.5 million of escrows and reserves as of September 30, 2024 compared to $2.5 million of cash and $0.4 million of escrows and reserves as of September 30, 2023.

Previous wording

Cash flows from operating activities – Net cash provided by operating activities increased by $1.7 million to $16.3 million for the six months ended June 30, 2024 compared to $14.6 million for the same period in 2023. The increase is primarily due to the volume our acquisitions, all of which have generated additional rental income and related changes in working capital, as well as the timing of certain receivables and payables.

Current wording

Cash flows from operating activities – Net cash provided by operating activities increased by $3.0 million to $24.3 million for the nine months ended September 30, 2024 compared to $21.3 million for the same period in 2023. The increase is primarily due to the volume our acquisitions, all of which have generated additional rental income and related changes in working capital, as well as the timing of certain receivables and payables.

Previous wording

Cash flows used in investing activities – Net cash used in investing activities for the six months ended June 30, 2024 primarily consisted of $41.8 million of acquisitions and $1.9 million of escrow deposits for acquisitions , capital improvements and other investing activities. Net cash used in investing activities for the six months ended June 30, 2023 primarily consisted of $32.9 million of acquisitions and $1.2 million of escrow deposits for acquisitions, capital improvements and other investing activities.

Current wording

Cash flows used in investing activities – Net cash used in investing activities for the nine months ended September 30, 2024 primarily consisted of $53.2 million of acquisitions and $2.7 million of escrow deposits for acquisitions, capital improvements and other investing activities. Net cash used in investing activities for the nine months ended September 30, 2023 primarily consisted of $54.9 million of acquisitions and $2.4 million of escrow deposits for acquisitions, capital improvements and other investing activities.

Previous wording

Cash flows from financing activities – Net cash provided by financing activities increased by $6.7 million to $27.1 million for the six months ended June 30, 2024 compared to $20.4 million for the six months ended June 30, 2023. The increase was primarily related to an increase in net proceeds received from issuance of shares during the same period and increased borrowings under the Revolving Credit Facility; partially offset by an increase in the payment of dividends and distributions during the six months ended June 30, 2024.

Current wording

Cash flows from financing activities – Net cash provided by financing activities decreased by $6.2 million to $30.2 million for the nine months ended September 30, 2024 compared to $36.4 million for the nine months ended September 30, 2023. The decrease was primarily related to a decrease in net proceeds received from issuance of shares during the same period partially offset by an increase in the payment of dividends and distributions during the nine months ended September 30, 2024.

Previous wording

We had approximately $1.7 million of cash and $0.9 million of escrows and reserves as of June 30, 2024.

Current wording

We had approximately $1.0 million of cash and $0.5 million of escrows and reserves as of September 30, 2024.

Previous wording

We have entered into the Credit Facilities, which include the $150.0 million Revolving Credit Facility. the 2021 Term Loan and the 2022 Term Loan(and, together with the 2021 Term Loan, the "Term Loans"), with Bank of Montreal, as administrative agent, and BMO Capital Markets Corp., M&T Bank, JPMorgan Chase Bank, N.A. and Truist Securities, Inc. as joint lead arrangers and joint book runners. Additional participants in the Credit Facilities include Stifel Bank & Trust and TriState Capital Bank. As of June 30, 2024, we had $242.0 million of aggregate principal amount outstanding under our Credit Facilities, with $75.0 million drawn on the 2021 Term Loan, $125.0 million drawn on the 2022 Term Loan and $42.0 million drawn on the Revolving Credit Facility.

Current wording

We have entered into the Credit Facilities, which include the $150.0 million Revolving Credit Facility. the 2021 Term Loan and the 2022 Term Loan(and, together with the 2021 Term Loan, the "Term Loans"), with Bank of Montreal, as administrative agent, and BMO Capital Markets Corp., M&T Bank, JPMorgan Chase Bank, N.A. and Truist Securities, Inc. as joint lead arrangers and joint book runners. Additional participants in the Credit Facilities include Stifel Bank & Trust and TriState Capital Bank. On October 25, 2024, we entered into the Third Amendment, replacing Bank of Montreal as the administrative agent with Truist Bank and further exercised $40.0 million of term loan accordion under the 2022 Term Loan and, on a delayed-draw basis, $10.0 million of 2022 Term Loan.

Previous wording

As of June 30, 2024, we had approximately $274.9 million of outstanding consolidated principal indebtedness. The following table sets forth information as of June 30, 2024 with respect to our outstanding indebtedness (in thousands):

Current wording

As of September 30, 2024, we had approximately $278.3 million of outstanding consolidated principal indebtedness. The following table sets forth information as of September 30, 2024 with respect to our outstanding indebtedness (in thousands):

Previous wording

(1)See above under "—Revolving Credit Facility and Term Loans" for details regarding the Credit Facilities. During the three and six months ended June 30, 2024, we incurred $0.06 million and $0.1 million of unused facility fees related to the Revolving Credit Facility, respectively.

Current wording

(1)See above under "—Revolving Credit Facility and Term Loans" for details regarding the Credit Facilities. During the three and nine months ended September 30, 2024, we incurred $0.05 million and $0.2 million of unused facility fees related to the Revolving Credit Facility, respectively.

Previous wording

As of June 30, 2024, we had approximately $32.9 million of secured borrowings outstanding, all of which are currently fixed-rate debt with a weighted average interest rate of 2.88% per annum.

Current wording

As of September 30, 2024, we had approximately $34.3 million of secured borrowings outstanding, all of which are currently fixed-rate debt with a weighted average interest rate of 2.96% per annum.

Previous wording

To maintain our qualification as a REIT, we are required to pay dividends to stockholders at least equal to 90% of our REIT taxable income determined without regard to the deduction for dividends paid and excluding net capital gains. During the three and six months ended June 30, 2024, we paid cash dividends of $0.24 and$0.48 per share, respectively. Our Board of Directors approved, and on July 23, 2024, we declared asecond quarter 2024 common stock dividend of $0.24 per share, which will be paid on August 30, 2024 to stockholders of record as of August 2, 2024.

Current wording

To maintain our qualification as a REIT, we are required to pay dividends to stockholders at least equal to 90% of our REIT taxable income determined without regard to the deduction for dividends paid and excluding net capital gains. During the three and nine months ended September 30, 2024, we paid cash dividends of $0.24 and$0.72 per share, respectively. Our Board of Directors approved, and on October 22, 2024, we declared athird quarter 2024 common stock dividend of $0.24 per share, which will be paid on November 29, 2024 to stockholders of record as of November 4, 2024.

Previous wording

As of August 6, 2024 and during the periods ubsequent to June 30, 2024, we have acquired nine properties in individual or portfolio transactions for an aggregate of approximately $3.4 million, excluding closing costs.

Current wording

As of November 4, 2024 and during the periods ubsequent to September 30, 2024, we have acquired 13 properties in individual or portfolio transactions for an aggregate of approximately $4.2 million, excluding closing costs.