Document and Entity Information
Document and Entity Information - shares | 3 Months Ended | |
Mar. 31, 2019 | Jun. 26, 2019 | |
Document And Entity Information | ||
Entity Registrant Name | Postal Realty Trust, Inc. | |
Entity Central Index Key | 0001759774 | |
Amendment Flag | false | |
Current Fiscal Year End Date | --12-31 | |
Document Type | 10-Q | |
Document Period End Date | Mar. 31, 2019 | |
Document Fiscal Year Focus | 2019 | |
Document Fiscal Period Focus | Q1 | |
Entity Filer Category | Non-accelerated Filer | |
Entity Small Business | true | |
Entity Ex Transition Period | false | |
Entity Shell Company | false | |
Entity Emerging Growth Company | true | |
Entity Common Stock, Shares Outstanding | 5,285,588 | |
Entity Current Reporting Status | No | |
Entity File Number | 001-38903 |
Combined Consolidated Balance S
Combined Consolidated Balance Sheets - USD ($) | Mar. 31, 2019 | Dec. 31, 2018 |
Postal Realty Trust, Inc. | ||
Real estate | ||
Cash | $ 1,000 | $ 1,000 |
Total assets | 1,000 | 1,000 |
Equity (Deficit) | ||
Common stock, $0.01 par value, 600,000,000 shares authorized, 1,000 shares issued and outstanding | 10 | 10 |
Additional paid in capital | 990 | 990 |
Total liabilities and equity (deficit) | 1,000 | 1,000 |
Nationwide Postal and Affiliates Predecessor | ||
Real estate | ||
Land | 7,418,415 | 7,239,213 |
Buildings and improvements | 30,014,094 | 29,550,076 |
Tenant improvements | 1,664,381 | 1,646,215 |
Total real estate, gross | 39,096,890 | 38,435,504 |
Less: accumulated depreciation | (7,381,310) | (7,121,532) |
Total real estate, net | 31,715,580 | 31,313,972 |
Cash | 394,217 | 262,926 |
Rent and other receivables | 492,626 | 601,670 |
Prepaid expenses and other assets | 143,947 | 146,014 |
Escrows and reserves | 600,053 | 598,949 |
Deferred rent receivable | 19,226 | 14,060 |
In-place lease intangibles (net of accumulated amortization of $4,604,992 and $4,388,699, respectively) | 2,589,138 | 2,735,927 |
Above market leases (net of accumulated amortization of $11,058 and $8,688, respectively) | 8,544 | 10,914 |
Total assets | 35,963,331 | 35,684,432 |
Liabilities | ||
Mortgage loans payable, net | 34,510,797 | 34,792,419 |
Accounts payable, accrued expenses and other | 1,691,404 | 1,869,084 |
Below market leases (net of accumulated amortization of $1,613,665 and $1,525,540, respectively) | 3,832,672 | 3,842,495 |
Deferred tax liability, net | 727,952 | 793,847 |
Total liabilities | 40,762,825 | 41,297,845 |
Commitments and contingencies | ||
Equity (Deficit) | ||
Common stock, UPH - no par, 1,000 shares authorized, 1,000 shares issued and outstanding | 4,000,000 | 4,000,000 |
Common stock, NPM - no par, 200 shares authorized, issued and outstanding | 200 | 200 |
Additional paid in capital | 3,688,614 | 3,441,493 |
Accumulated equity (deficit) | (11,177,430) | (11,003,876) |
Member's equity (deficit) | (1,357,793) | (2,095,823) |
Noncontrolling interest | 46,915 | 44,593 |
Total equity (deficit) | (4,799,494) | (5,613,413) |
Total liabilities and equity (deficit) | $ 35,963,331 | $ 35,684,432 |
Combined Consolidated Balance_2
Combined Consolidated Balance Sheets (Parenthetical) - USD ($) | Mar. 31, 2019 | Dec. 31, 2018 |
Postal Realty Trust, Inc. | ||
Common stock, par value | $ 0.01 | $ 0.01 |
Common stock, shares authorized | 600,000,000 | 600,000,000 |
Common stock, shares issued | 1,000 | 1,000 |
Common stock, shares outstanding | 1,000 | 1,000 |
Nationwide Postal and Affiliates Predecessor | ||
In-place lease intangibles of accumulated amortization | $ 4,604,992 | $ 4,388,699 |
Above market leases of accumulated amortization | 11,058 | 8,688 |
Below market leases of accumulated amortization | $ 1,613,665 | $ 1,525,540 |
Nationwide Postal and Affiliates Predecessor | UPH | ||
Common stock, par value | ||
Common stock, shares authorized | 1,000 | 1,000 |
Common stock, shares issued | 1,000 | 1,000 |
Common stock, shares outstanding | 1,000 | 1,000 |
Nationwide Postal and Affiliates Predecessor | NPM | ||
Common stock, par value | ||
Common stock, shares authorized | 200 | 200 |
Common stock, shares issued | 200 | 200 |
Common stock, shares outstanding | 200 | 200 |
Combined Consolidated Statement
Combined Consolidated Statements of Income (Unaudited) - USD ($) | 3 Months Ended | |
Mar. 31, 2019 | Mar. 31, 2018 | |
Operating expenses | ||
Net income | $ 257,076 | $ 94,463 |
Nationwide Postal and Affiliates Predecessor | ||
Revenues | ||
Rent income | 1,492,386 | 1,378,110 |
Tenant reimbursements | 236,856 | 215,257 |
Fee and other income | 286,926 | 319,903 |
Total revenues | 2,016,168 | 1,913,270 |
Operating expenses | ||
Real estate taxes | 249,789 | 222,138 |
Property operating expenses | 251,706 | 226,313 |
General and administrative | 376,891 | 504,850 |
Depreciation and amortization | 480,443 | 456,306 |
Total operating expenses | 1,358,829 | 1,409,607 |
Income from operations | 657,339 | 503,663 |
Interest expense, net | (360,514) | (384,686) |
Income before income tax expense | 296,825 | 118,977 |
Income tax expense | (39,749) | (24,514) |
Net income | 257,076 | 94,463 |
Less: Net income attributable to the noncontrolling interest | (2,843) | (3,822) |
Net income attributable to Nationwide Postal and Affiliates Predecessor | $ 254,233 | $ 90,641 |
Combined Consolidated Stateme_2
Combined Consolidated Statements of Changes in Equity (Deficit) (Unaudited) - USD ($) | Common StockNationwide Postal and Affiliates Predecessor | Additional Paid-in CapitalNationwide Postal and Affiliates Predecessor | Accumulated Equity (Deficit)Nationwide Postal and Affiliates Predecessor | Member's Equity (Deficit)Nationwide Postal and Affiliates Predecessor | Noncontrolling InterestNationwide Postal and Affiliates Predecessor | Total |
Beginning Balance, Nationwide Postal and Affiliates Predecessor at Dec. 31, 2017 | $ 4,000,200 | $ 3,650,309 | $ (10,693,356) | $ (7,012,369) | $ 44,577 | $ (10,010,639) |
Beginning Balance, Shares, Nationwide Postal and Affiliates Predecessor at Dec. 31, 2017 | ||||||
Capital contributions | 135,577 | 1,046,284 | 2,651 | 1,184,512 | ||
Distributions and dividends | (100,245) | (1,904,107) | (2,651) | (2,007,003) | ||
Net income (loss) | (228,940) | 319,581 | 3,822 | 94,463 | ||
Ending Balance, Nationwide Postal and Affiliates Predecessor at Mar. 31, 2018 | 4,000,200 | 3,685,641 | (10,922,296) | (7,550,611) | 48,399 | (10,738,667) |
Beginning Balance, Nationwide Postal and Affiliates Predecessor at Dec. 31, 2018 | $ 4,000,200 | 3,441,493 | (11,003,876) | (2,095,823) | 44,593 | (5,613,413) |
Beginning Balance, Shares, Nationwide Postal and Affiliates Predecessor at Dec. 31, 2018 | ||||||
Capital contributions | 397,121 | 1,377,758 | 1,774,879 | |||
Distributions and dividends | (150,000) | (1,067,515) | (521) | (1,218,036) | ||
Net income (loss) | (173,554) | 427,787 | 2,843 | 257,076 | ||
Ending Balance, Nationwide Postal and Affiliates Predecessor at Mar. 31, 2019 | $ 4,000,200 | $ 3,688,614 | $ (11,177,430) | $ (1,357,793) | $ 46,915 | $ (4,799,494) |
Ending Balance, Shares, Nationwide Postal and Affiliates Predecessor at Mar. 31, 2019 |
Combined Consolidated Stateme_3
Combined Consolidated Statements of Cash Flows - USD ($) | 3 Months Ended | |
Mar. 31, 2019 | Mar. 31, 2018 | |
Cash flows from operating activities | ||
Net income (loss) | $ 257,076 | $ 94,463 |
Nationwide Postal and Affiliates Predecessor | ||
Cash flows from operating activities | ||
Net income (loss) | 257,076 | 94,463 |
Adjustments to reconcile net income to net cash provided by operating activities: | ||
Depreciation | 264,150 | 246,270 |
Amortization of in-place intangibles | 216,293 | 210,036 |
Amortization of deferred financing costs | 3,179 | 3,125 |
Amortization of above market leases | 2,370 | 2,370 |
Amortization of below market leases | (88,125) | (68,588) |
Deferred rent receivable | (5,166) | 854 |
Deferred rent expense payable | 532 | |
Deferred tax liability | (65,895) | (187,827) |
Change in assets and liabilities | ||
Rent and other receivables | 109,044 | 141,556 |
Prepaid expenses and other assets | 2,067 | 3,875 |
Accounts payable, accrued expenses and other | (178,212) | 275,924 |
Net cash provided by operating activities | 517,313 | 722,058 |
Cash flows from investing activities | ||
Acquisition of real estate | (645,120) | (380,477) |
Capital improvements | (11,840) | |
Net cash used in investing activities | (656,960) | (380,477) |
Cash flows from financing activities | ||
Proceeds from mortgage payable | 960,000 | |
Repayments of mortgages payable | (284,801) | (265,264) |
Capital contributions | 1,774,879 | 1,184,512 |
Distributions and dividends | (1,218,036) | (2,007,003) |
Net cash provided by (used in) financing activities | 272,042 | (127,755) |
Net increase in cash and restricted cash | 132,395 | 213,826 |
Cash and restricted cash at beginning of period | 861,875 | 694,418 |
Cash and restricted cash at end of period | $ 994,270 | $ 908,244 |
Organization and Description of
Organization and Description of Business | 3 Months Ended |
Mar. 31, 2019 | |
ORGANIZATION AND DESCRIPTION OF BUSINESS | 1. Organization Postal Realty Trust, Inc. (the "Company" "we", "us", or "our") was organized in the state of Maryland on November 19, 2018. On May 17, 2019, the Company completed its initial public offering ("IPO") of shares of the Company's Class A common stock, par value $0.01 per share (our "Class A Common Stock"). The Company contributed the net proceeds of our initial public offering (our "IPO") to Postal Realty LP, a Delaware limited partnership (the "Operating Partnership"), in exchange for common units of limited partnership interest in our Operating Partnership ("OP Units"). Both the Company and the Operating Partnership commenced operations upon completion of the IPO and certain related formation transactions (the "Formation Transactions"). Prior to the completion of the IPO and the Formation Transactions, on May 17, 2019, the Company had no operations. At March 31, 2019, the Company was authorized to issue up to 600,000,000 shares of common stock, par value $0.01 per share. Upon completion of the IPO on May 17, 2019, we amended our articles of incorporation such that the Company is currently authorized to issue up to 500,000,000 shares of common stock, par value $0.01 per share, and up to 100,000,000 shares of preferred stock. The Company elected to be taxed as an S-Corporation under the Internal Revenue Code of 1986, as amended (the "Code") effective November 19, 2018, and as such, all federal tax liabilities were the responsibility of the Company's sole stockholder. In anticipation of the IPO, the Company revoked its S-Corporation election on May 14, 2019. The Company intends to qualify and elect to qualify as a real estate investment trust ("REIT") under the Code beginning with its short taxable year ending December 31, 2019. As a REIT, the Company generally will not be subject to federal income tax to the extent that it distributes at least 90% of its taxable income for each tax year to its stockholders. REITs are subject to a number of organizational and operational requirements. |
Nationwide Postal and Affiliates Predecessor | |
ORGANIZATION AND DESCRIPTION OF BUSINESS | 1. ORGANIZATION AND DESCRIPTION OF BUSINESS Nationwide Postal and Affiliates Predecessor (the "Predecessor") is a combination of limited liability companies (the "LLCs"), one C-Corporation ("UPH"), one S-Corporation ("NPM") and one limited partnership. The Predecessor is not a legal entity. The entities that comprise the Predecessor were majority owned and controlled by Mr. Andrew Spodek at March 31, 2019 and were acquired by contribution to or merger with Postal Realty Trust, Inc., a recently formed company that intends to qualify as a real estate investment trust (the "Company") and its recently formed operating partnership, Postal Realty LP (the "Operating Partnership") in connection with the Company's initial public offering (the "IPO"), which closed on May 17, 2019. The Company is the sole general partner of the Operating Partnership. At March 31, 2019, the Predecessor, through the LLCs, UPH, and the limited partnership, owns 190 post office properties in 33 states: Alabama, Alaska, Arkansas, Connecticut, Florida, Georgia, Idaho, Illinois, Iowa, Kansas, Kentucky, Louisiana, Maine, Maryland, Massachusetts, Michigan, Minnesota, Mississippi, Missouri, Montana, Nebraska, Nevada, North Carolina, North Dakota, Ohio, Oklahoma, Pennsylvania, South Dakota, Tennessee, Texas, Washington, Wisconsin, and Wyoming. All the properties are leased to a single tenant, the United States Postal Service (the "USPS"). NPM, a subchapter S Corporation, was formed on November 17, 2004, for the purposes of managing commercial real estate properties. The Company is a Maryland corporation formed on November 19, 2018. The Company elected to be taxed as an S-Corporation under the Internal Revenue Code of 1986, as amended (the "Code") effective November 19, 2018, and as such, all federal tax liabilities were the responsibility of the Company's sole stockholder. In anticipation of the IPO, the Company revoked its S-Corporation election on May 14, 2019. The Company intends to qualify and elect to qualify as a real estate investment trust ("REIT") under the Code beginning with its short taxable year ending December 31, 2019. As a REIT, the Company generally will not be subject to federal income tax to the extent that it distributes at least 90% of its taxable income for each tax year to its stockholders. REITs are subject to a number of organizational and operational requirements. |
The Company's Initial Public Of
The Company's Initial Public Offering and Formation Transactions | 3 Months Ended |
Mar. 31, 2019 | |
THE COMPANY'S INITIAL PUBLIC OFFERING AND FORMATION TRANSACTIONS | 2. Initial Public Offering and Formation Transactions Both the Company and the Operating Partnership commenced operations upon completion of the IPO and Formation Transactions on May 17, 2019. The Company’s operations are carried on primarily through the Operating Partnership and wholly owned subsidiaries of the Operating Partnership. On May 17, 2019, the Company closed the IPO, pursuant to which it sold 4,500,000 shares of its Class A Common Stock at a public offering price of $17.00 per share. The Company raised $76.5 million in gross proceeds, resulting in net proceeds of approximately $71.1 million after deducting approximately $5.4 million in underwriting discounts and before giving effect to other expenses relating to the IPO. The Company’s Class A Common Stock began trading on the New York Stock Exchange under the symbol “PSTL” on May 15, 2019. In connection with the IPO and Formation Transactions, the Company, through its Operating Partnership, used a portion of the net proceeds to repay approximately $31.7 million of outstanding indebtedness related to the accounting predecessor to the Company, which is not a legal entity (the “Predecessor”). The remaining funds are expected to be used for general working capital purposes and to fund potential future acquisitions. The accompanying balance sheets of the Company does not reflect the IPO, or the Formation Transactions completed on May 17, 2019. Pursuant to the Formation Transactions, the Company, directly or through the Operating Partnership, acquired the entities that comprise the Predecessor. The initial properties and other interests were acquired in exchange for 1,333,112 OP Units, 637,058 shares of Class A Common Stock and 27,206 shares of the Company’s Class B common stock, par value $0.01 per share (the “Class B Common Stock”), and $1.9 million of cash. In addition, the Operating Partnership purchased a 100% interest in 81 post office properties in exchange for $26.9 million in cash, including approximately $1.0 million paid to Andrew Spodek, the Company’s chief executive officer and a director. |
Nationwide Postal and Affiliates Predecessor | |
THE COMPANY'S INITIAL PUBLIC OFFERING AND FORMATION TRANSACTIONS | 2. THE COMPANY’S INITIAL PUBLIC OFFERING AND FORMATION TRANSACTIONS The Company’s operations are carried on primarily through the Operating Partnership and wholly owned subsidiaries of the Operating Partnership. Both the Company and the Operating Partnership commenced operations upon completion of the IPO and related formation transactions (the “Formation Transactions”) on May 17, 2019. On May 17, 2019, the Company closed the IPO, pursuant to which it sold 4,500,000 shares of its Class A common stock, par value $0.01 per share (“Class A Common Stock”) at a public offering price of $17.00 per share. The Company raised $76.5 million in gross proceeds, resulting in net proceeds of approximately $71.1 million after deducting approximately $5.4 million in underwriting discounts and before giving effect to other expenses relating to the IPO. The Class A Common Stock began trading on the New York Stock Exchange under the symbol “PSTL” on May 15, 2019. The Company contributed the net proceeds of the IPO to the Operating Partnership in exchange for common units in the Operating Partnership. The Operating Partnership utilized a portion of the net proceeds of the IPO to acquire properties in the Formation Transactions and to repay mortgage debt secured by certain of the Company’s initial properties. The remaining funds are expected to be used for general working capital purposes and to fund future acquisitions. Pursuant to the Formation Transactions, the Operating Partnership acquired the entities that comprised of the Predecessor. These initial property interests and the business and assets of NPM were acquired in exchange for 1,333,112 OP Units, 637,058 shares of Class A Common Stock, 27,206 shares of Class B common stock, par value $0.01 per share, and $1.9 million of cash. In addition, the Operating Partnership purchased a 100% interest in 81 post office properties in exchange for $26.9 million in cash, including approximately $1.0 million paid to Andrew Spodek, the Company’s chief executive officer and a director. In connection with the IPO and Formation Transactions, the Company, through its Operating Partnership, repaid approximately $31.7 million of outstanding indebtedness related to the Predecessor. The accompanying combined consolidated financial statements do not reflect the results of operations and financial position of the Company or Operating Partnership upon completion of the IPO or the Formation Transactions completed on May 17, 2019. |
Summary of Significant Accounti
Summary of Significant Accounting Policies | 3 Months Ended |
Mar. 31, 2019 | |
SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES | 3. Summary of Significant Accounting Policies Basis of Presentation The balance sheet has been prepared by management in accordance with United States generally accepted accounting principles. In the opinion of management, the unaudited balance sheet as of March 31, 2019 reflects all adjustments, consisting solely of a normal recurring nature, necessary to present fairly, in all material respects, the Company's financial position at March 31, 2019. The Company did not have any operations from the date of formation to May 17, 2019. Offering and Other Costs Certain of the costs related to the IPO and Formation Transactions paid by an affiliate of the Company's sole shareholder at March 31, 2019 will be reimbursed by the Company from the proceeds of the IPO. Organizational costs incurred by the Company will be expensed. Offering costs will be recorded in stockholders' equity as a reduction of additional paid-in capital. Transaction costs related to asset acquisitions will be capitalized as part of the acquisition. The Company has not recorded any organization, offering or transaction costs at March 31, 2019, because such costs were not the liability of the Company until the successful completion of the IPO. As of March 31, 2019, approximately $2.9 million of offering and other costs had been incurred by an affiliate of the Company's sole shareholder. Subsequent to March 31, 2019, the affiliate of the Company's sole shareholder has incurred an estimated $2.6 million of offering and other costs. Investments in Real Estate Upon the acquisition of real estate, the purchase price will be allocated based upon the fair value of the assets acquired and liabilities assumed for business combinations. The purchase price for asset acquisitions will be allocated based upon the relative fair value of the assets acquired and liabilities assumed. The allocation of the purchase price to the fair value of the tangible assets of an acquired property by valuing the property as if it were vacant. For transactions that are business combinations, acquisition costs are expensed as incurred. For transactions that are an asset acquisition, acquisition costs are capitalized as incurred. Investments in real estate will generally include land, buildings, tenant improvements and identified intangible assets, such as in-place lease intangibles and above or below-market lease intangibles. Direct and certain indirect costs clearly associated with the development, construction, leasing or expansion of real estate assets will be capitalized as a cost of the property. Repairs and maintenance costs will be expensed as incurred. Depreciation on buildings generally will be provided on a straight-line basis over 39 years. Tenant improvements will be depreciated over the shorter of their estimated useful lives or the term of the related lease. The acquired in-place lease values will be amortized to expense over the average remaining non-cancellable term of the respect in-place leases. The acquired above or below-market lease intangibles will be amortized to rent income over the applicable lease term, inclusive of any option periods for below-market leases. The carrying value of real estate investments and related intangible assets will be reviewed for impairment whenever events or changes in circumstances indicate that the carrying amount may not be recoverable. An impairment exists when the carrying amount of an asset exceeds the aggregate projected future cash flows over the anticipated holding period on an undisclosed basis. An impairment loss is measured based on the excess of the asset's carrying amount over its estimated fair value. Impairment analyses will be based on current plans, intended holding periods and available market information at the time the analyses are prepared. If estimates of the projected future cash flows, anticipated holding periods or market conditions change, the evaluation of impairment losses may be different and such differences may be material. The evaluation of anticipated cash flows is subjective and is based, in part, on assumptions regarding future occupancy, rental rates and capital requirements that could differ materially from actual results. |
Nationwide Postal and Affiliates Predecessor | |
SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES | 3. SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES Basis of presentation The accompanying combined consolidated financial statements of the Predecessor are prepared in accordance with accounting principles generally accepted in the United States (“GAAP”). The effect of all significant intercompany balances and transactions have been eliminated. A non-controlling interest is defined as the portion of the equity in an entity not attributable, directly or indirectly, to the Predecessor. Non-controlling interests are required to be presented as a separate component of equity in the combined consolidated balance sheets. Accordingly, the presentation of net income is modified to present the income attributed to controlling and non-controlling interests. The accompanying combined consolidated financial statements have been prepared in accordance with GAAP for interim financial information and with the instructions to Form 10-Q and Article 8 of Regulation S-X. Accordingly, they do not include all of the information and footnotes required by GAAP for complete financial statements. The information furnished in the accompanying combined consolidated financial statements reflects all adjustments that, in the opinion of management, are necessary for a fair presentation of the aforementioned combined financial statements for the interim periods. Operating results for the three months ended March 31, 2019 are not necessarily indicative of the results that may be expected for the year ending December 31, 2019. These interim financial statements should be read in conjunction with, and follow the same policies and procedures as outlined in the audited combined consolidated financial statements for the year ended December 31, 2018, included in the Company’s final prospectus Use of estimates The preparation of financial statements in conformity with GAAP requires management to make estimates and assumptions that affect the reported amounts of assets and liabilities and disclosure of commitments and contingencies at the date of the combined consolidated financial statements and the reported amounts of revenues and expenses during the reporting period. Actual results could differ materially from these estimates. Real estate During the three months ended March 31, 2019, the Predecessor acquired one property for a purchase price of $645,120, inclusive of acquisition costs of $10,120. The purchase price was allocated to the separately identifiable tangible and intangible assets and liabilities based on their relative fair values at the date of acquisition. The total purchase price was allocated as follows: Land $ 179,202 Building and improvements 456,550 Tenant improvements 18,166 In-place lease intangibles 69,504 Below market leases (78,302 ) Total $ 645,120 During the three months ended March 31, 2018, the Predecessor acquired three properties for an aggregate purchase price of $380,477, inclusive of aggregate acquisition costs of $12,047. The purchase price was allocated to the separately identifiable tangible and intangible assets and liabilities based on their relative fair values at the date of acquisition. The total purchase price was allocated as follows: Land $ 165,827 Building and improvements 196,530 Tenant improvements 13,197 In-place lease intangibles 55,439 Above market leases 19,603 Below market leases (70,119 ) Total $ 380,477 For the three months ended March 31, 2019 and 2018, no impairment loss was recorded. Cash and Restricted Cash Cash and cash equivalents include cash and highly liquid investment securities with maturities at acquisition of three months or less. Restricted cash is presented as escrows and reserves in the accompanying combined consolidated balance sheets. Cash and restricted cash consist of the following: March 31, December 31, Cash $ 394,217 $ 262,926 Restricted cash: Maintenance reserve 600,053 598,949 Total cash and restricted cash $ 994,270 $ 861,875 Deferred financing costs Total amortization expense for the three months ended March 31, 2019 and 2018, was $3,179 and $3,125, respectively, which is included in interest expense in the accompanying combined consolidated statements of income. The Predecessor will amortize the remaining deferred financing costs as follows: Year Ending December 31, Amount 2019 - Remaining $ 9,548 2020 12,727 2021 12,727 2022 12,727 2023 12,727 Thereafter 163,095 Total $ 223,551 Fair Value of Financial instruments The following disclosure of estimated fair value was determined by management using available market information and appropriate valuation methodologies. However, considerable judgment is necessary to interpret market data and develop estimated fair value. Accordingly, the estimates presented herein are not necessarily indicative of the amounts the Predecessor could realize on disposition of the assets and liabilities at March 31, 2019 and December 31, 2018. The use of different market assumptions and/or estimation methodologies may have a material effect on the estimated fair value amounts. Cash equivalents, receivables, accounts payable and accrued expenses and other liabilities are carried at amounts which reasonably approximate their fair values as of March 31, 2019 and December 31, 2018. The fair value of the Predecessor’s mortgages loans payable and other obligations aggregated approximately $33,423,184 and $33,586,000, as compared to the book value of $34,510,797 and $34,792,419 as of March 31, 2019 and December 31, 2018, respectively. The fair value of the Predecessor’s debt was categorized as a level 3 basis (as provided by ASC 820, Fair Value Measurements and Disclosures Disclosure about fair value of assets and liabilities is based on pertinent information available to management as of March 31, 2019 and December 31, 2018, respectively. Although management is not aware of any factors that would significantly affect the fair value amounts, such amounts have not been comprehensively revalued for purposes of these financial statements since March 31, 2019 and current estimates of fair value may differ significantly from the amounts presented herein. Accounting Standards Adopted in 2019 In May 2014, the Financial Accounting Standards Board issued Accounting Standards Update (“ASU”) No. 2014-09, Revenue from Contracts with Customers This standard is effective for interim and annual reporting periods that begin on or after December 15, 2018. The Predecessor adopted ASU 2014-09 on January 1, 2019 using the modified retrospective method however, there was no cumulative effect required to be recognized in retained earnings at the date of application. Substantially all of the Predecessor’s revenue is derived from its tenant leases and therefore falls outside the scope of this guidance. With respect to its fee-derived revenue, the Predecessor earns monthly base management fees subject to the terms of the contractual agreements with entities that are affiliated with the Predecessor for the day-to-day operations and administration of its managed properties. These services are provided in exchange for monthly management fees, which are based on a percentage of revenues collected from post offices owned by entities that are affiliated with the Predecessor. The Predecessor determined that there is no change to revenue recognition for base management fees as the underlying services are considered to be individual performance obligations composed of a series of distinct services satisfied over time, for which revenue is recognized monthly as earned over the life of the management agreement as services are provided. The total amount of consideration from the contracts is variable as it is based on monthly revenues, which are influenced by multiple factors, some of which are outside the Predecessor’s control. Therefore, the Predecessor recognizes the revenue at the end of each month once the uncertainty is resolved. Due to the standardized terms of the management agreements, the Predecessor accounts for all management agreements in a similar, consistent manner. Therefore, no disaggregated information relating to management agreements is presented. Future Application of Accounting Standards In February 2016, the FASB issued ASU No. 2016-02, Leases Revenue from Contracts with Customers initial direct costs Leases ASU 2016-02 initially provided for one retrospective transition method; however, a second transition method was later added with ASU 2018-11 as described below. To ease the transition, the new lease accounting guidance permits companies to utilize certain practical expedients in their implementation of the new standard: ● A package of three practical expedients that must be elected together for all leases and includes: (i) not reassessing expired or existing contracts as to whether they are or contain leases; (ii) not reassessing lease classification of existing leases and (iii) not reassessing the amount of capitalized initial direct costs for existing leases; ● ASU 2016-02 also includes a practical expedient to use hindsight in determining the lease term or assessing purchase options for existing leases and in assessing impairment of right of use assets; ● ASU 2018-01, Land Easements Practical Expedient for Transition to Topic 842 ● A new practical expedient under ASU 2018-11, described below. In July 2018, the FASB issued ASU No. 2018-10, Codification Improvements to Topic 842 Leases Leases Leases Targeted Improvements Leases As lessor, the Company expects that post-adoption substantially all existing leases will have no change in the timing of revenue recognition until their expiration or termination. The Company expects to elect the lessor practical expedient to not separate non-lease components such as maintenance from the associated lease for all existing and new leases and to account for the combined component as a single lease component. The timing of revenue recognition is expected to be the same for the majority of the Company’s new leases as compared to similar existing leases; however, certain categories of new leases could have different revenue recognition patterns as compared to similar existing leases. As lessee, the Company expects to record a right of use asset and related liability for the office lease disclosed in Note 9. Related Party Transactions. In December 2018, the FASB issued ASU 2018-20 Leases (Topic 842), Narrow-Scope Improvements for Lessors Topic 842 will be effective for the Company on January 1, 2020 as a result of its classification as an emerging growth company. The Company continues to evaluate the FASB’s activities related to the new leasing standard and the potential impact on its financial results, policies and disclosures upon adoption, including the accounting for costs which may be paid by the lessee directly to a third party, such as real estate taxes. In December 2018, the FASB issued ASU No. 2018-20, Leases — Narrow-Scope Improvements for Lessors In June 2016, the FASB issued ASU No. 2016-13, Financial Instruments-Credit Losses Codification Improvements to Topic 326, Financial Instruments - Credit Losses |
Intangible Assets and Liabiliti
Intangible Assets and Liabilities | 3 Months Ended |
Mar. 31, 2019 | |
Intangible Assets And Liabilities | |
Intangible Assets And Liabilities | 4. INTANGIBLE ASSETS AND LIABILITIES Amortization of in-place lease intangibles was $216,293 and $210,036 for the three months ended March 31, 2019 and 2018, respectively. This amortization is included in depreciation and amortization in the combined consolidated statements of income. Amortization of acquired above market leases was $2,370 and $2,370 for the three months ended March 31, 2019 and 2018, respectively, and is included in rent income in the combined consolidated statements of income. Amortization of acquired below market leases was $88,125 and $68,588 for the three months ended March 31, 2019 and 2018, respectively, and is included in rent income in the combined consolidated statements of income. The balance of these intangible assets and liabilities will be amortized as follows: Year ending December 31, In-Place Lease Intangibles Below Market Leases Above Market Leases 2019 - Remaining $ 649,965 $ 268,293 $ 5,617 2020 856,374 354,296 2,927 2021 825,543 335,784 - 2022 185,795 314,644 - 2023 55,741 311,782 - Thereafter 15,720 2,247,873 - Total $ 2,589,138 $ 3,832,672 $ 8,544 |
Mortgage Loans Payable
Mortgage Loans Payable | 3 Months Ended |
Mar. 31, 2019 | |
Mortgage Loans Payable | |
MORTGAGE LOANS PAYABLE | 5. MORTGAGE LOANS PAYABLE The following are the principal balances on the mortgage loans payable as of March 31, 2019 and December 31, 2018: Mortgage loans payable March 31, 2019 December 31, 2018 Vision Bank $ 15,484,514 $ 15,636,243 Atlanta Postal Credit Union 17,194,853 17,313,481 First Oklahoma Bank 386,311 389,599 Vision Bank – 2018 929,048 936,750 First Oklahoma Bank – 2018 739,622 743,076 Total mortgage loans payable $ 34,734,348 $ 35,019,149 Principal payments on the mortgage loans payable through maturity are as follows: Year Ending December 31, Amount 2019 – Remaining $ 849,221 2020 1,180,685 2021 17,049,176 2022 661,457 2023 698,181 Thereafter 14,295,628 34,734,348 Less: Deferred financing costs, net 223,551 Total $ 34,510,797 The Vision Bank loan, First Oklahoma Bank loan and Vision Bank — 2018 loan contain a personal guaranty of payment by Mr. Spodek. Refer to Note 11. Subsequent Events for a discussion of the repayment of certain of the Predecessor’s mortgage loans payable in conjunction with the Company’s IPO. |
Loans Payable - Related Party
Loans Payable - Related Party | 3 Months Ended |
Mar. 31, 2019 | |
Debt Disclosure [Abstract] | |
LOANS PAYABLE - RELATED PARTY | 6. LOANS PAYABLE – RELATED PARTY At March 31, 2018, the Predecessor had interest-only promissory notes in principal amounts aggregating $3,544,215 payable to a related party. The loans bore interest at 1.9% per annum, require interest only payments, and mature between August 1, 2036 through July 1, 2041. In June 2018, pursuant to a loan modification agreement, these notes were assumed by an affiliate of the Predecessor and recorded as an increase in equity of the Predecessor. Interest expense incurred for these notes was $18,616 for the three months ended March 31, 2018. |
Operating Lease Agreements
Operating Lease Agreements | 3 Months Ended |
Mar. 31, 2019 | |
Leases, Operating [Abstract] | |
OPERATING LEASE AGREEMENTS | 7. OPERATING LEASE AGREEMENTS At March 31, 2019, all of the properties owned by the Predecessor are leased to a single tenant, the USPS. The leases expire at various dates through February 28, 2027. Future minimum rental income to be received on non-cancellable leases is as follows: Year Ending December 31, Amount 2019 - Remaining $ 4,225,664 2020 5,098,410 2021 4,660,509 2022 2,444,252 2023 1,740,243 Thereafter 2,815,827 Total $ 20,984,905 |
Income Taxes
Income Taxes | 3 Months Ended |
Mar. 31, 2019 | |
Income Tax Disclosure [Abstract] | |
INCOME TAXES | 8. INCOME TAXES In order to determine the quarterly provision for income taxes for UPH, the Predecessor used an estimated annual effective tax rate (“ETR”), which is based on expected annual income and statutory tax rates in the various jurisdictions. Certain significant or unusual items are separately recognized as discrete items in the quarter during which they occur and can be a source of variability in the effective tax rates from quarter to quarter. Income tax expense for the three months ended March 31, 2019 was $39,749 at an effective tax rate of 13.4% and, $24,514 at an effective tax rate of 5.9% for the three months ended March 31, 2018. The effective tax rate for the three months ended March 31, 2019 and March 31, 2018 differs from the statutory rate of 21% due to certain entities included in the combined consolidated financial statements that are not subject to tax at the entity level, state taxes and interest and penalties from unrecognized tax benefits primarily related to the utilization of loss carryforwards. The Predecessor has unrecognized tax benefits at March 31, 2019 of $707,920 which is inclusive of interest and penalties. |
Related Party Transactions
Related Party Transactions | 3 Months Ended |
Mar. 31, 2019 | |
Related Party Transactions [Abstract] | |
RELATED PARTY TRANSACTIONS | 9. RELATED PARTY TRANSACTIONS Management fee income The Predecessor recognized management fee income of $257,121 and $312,602 for the three months ended March 31, 2019 and 2018, respectively, from various properties which are affiliated with the owner of NPM. These amounts include accrued management fees receivable of $0 and $80,800 at March 31, 2019 and 2018, respectively, which is included in rents and other receivables on the combined consolidated balance sheets. Related party lease [On October 1, 2018, the Predecessor entered a lease for office space in Cedarhurst, New York with an entity affiliated with the Predecessor (the “Office Lease”)] 2 As of March 31, 2019, future minimum rental payments on the noncancelable lease is as follows: Year Ending December 31, Amount 2019 - Remaining $ 136,350 2020 186,791 2021 192,394 2022 198,166 2023 151,944 Total $ 865,645 Other Receivables/Other Payables During the three months ended March 31, 2019, the Predecessor paid certain costs on behalf of a related party totaling $45,334, which is recorded in rents and receivables on the combined consolidated balance sheet. Such amount was repaid by the related party in April 2019. During the three months ended March 31, 2019, the Predecessor was advanced certain funds by a related party totaling $20,000, which is recorded in accounts payable, accrued expenses and other on the combined consolidated balance sheet. Such amount was repaid by the Predecessor in April 2019. |
Commitments and Contingencies
Commitments and Contingencies | 3 Months Ended |
Mar. 31, 2019 | |
Commitments and Contingencies | 4. Commitments and Contingencies In the ordinary course of the Company's business, the Company enters into non-binding (except with regard to exclusivity and confidentiality) letters of intent indicating a willingness to negotiate for acquisitions. There can be no assurance that definitive contracts will be entered into with respect to any matter covered by letters of intent, that the Company will close the transactions contemplated by such contracts on time, or that the Company will consummate any transaction contemplated by any definitive contract. |
Nationwide Postal and Affiliates Predecessor | |
Commitments and Contingencies | 10. COMMITMENTS AND CONTINGENCIES At March 31, 2019, the Predecessor was not, and the Company is not currently, involved in any litigation nor to its knowledge is any litigation threatened against the Predecessor or the Company, as applicable, that, in management's opinion, would result in any material adverse effect on the Company's financial position, or which is not covered by insurance. |
Subsequent Events
Subsequent Events | 3 Months Ended |
Mar. 31, 2019 | |
Subsequent Events | 5. Subsequent Events As discussed in Note 2, the Company completed the IPO and Formation Transactions on May 17, 2019 and used a portion of the net proceeds to repay approximately $31.7 million of outstanding mortgage debt of the Predecessor secured by certain of the initial properties acquired by the Company in connection with such transactions. See Note 2. Initial Public Offering and Formation Transactions. On June 26, 2019, the board of directors of the Company approved and the Company declared a pro-rated cash dividend of $0.063 per share of common stock for the period from May 17, 2019, the closing date of the IPO, to June 30, 2019. The dividend will be payable on July 31, 2019 to stockholders of record as of the close of business on July 9, 2019. In June 2019, the Company, through its Operating Partnership, entered into agreements to acquire three post office properties located in Arkansas, Louisiana and South Carolina for approximately $4.4 million in cash. The transactions are expected to close in the third quarter of 2019, subject to the satisfaction of customary closing conditions. |
Nationwide Postal and Affiliates Predecessor | |
Subsequent Events | 11. SUBSEQUENT EVENTS As discussed in Note 2, the Company completed the IPO and Formation Transactions on May 17, 2019 and used a portion of the net proceeds to repay approximately $31.7 million of outstanding mortgage debt of the Predecessor secured by certain of the initial properties acquired by the Company in connection with such transactions. See Note 2. The Company’s Initial Public Offering and Formation Transactions. On June 26, 2019, the board of directors of the Company approved and the Company declared a pro-rated cash dividend of $0.063 per share of common stock for the period from May 17, 2019, the closing date of the IPO, to June 30, 2019. The dividend will be payable on July 31, 2019 to stockholders of record as of the close of business on July 9, 2019. In June 2019, the Company, through its Operating Partnership, entered into agreements to acquire three post office properties located in Arkansas, Louisiana and South Carolina for approximately $4.4 million in cash. |
Summary of Significant Accoun_2
Summary of Significant Accounting Policies (Policies) | 3 Months Ended |
Mar. 31, 2019 | |
Basis of Presentation | Basis of Presentation The balance sheet has been prepared by management in accordance with United States generally accepted accounting principles. In the opinion of management, the unaudited balance sheet as of March 31, 2019 reflects all adjustments, consisting solely of a normal recurring nature, necessary to present fairly, in all material respects, the Company’s financial position at March 31, 2019. The Company did not have any operations from the date of formation to May 17, 2019. |
Offering and Other Costs | Offering and Other Costs Certain of the costs related to the IPO and Formation Transactions paid by an affiliate of the Company's sole shareholder at March 31, 2019 will be reimbursed by the Company from the proceeds of the IPO. Organizational costs incurred by the Company will be expensed. Offering costs will be recorded in stockholders' equity as a reduction of additional paid-in capital. Transaction costs related to asset acquisitions will be capitalized as part of the acquisition. The Company has not recorded any organization, offering or transaction costs at March 31, 2019, because such costs were not the liability of the Company until the successful completion of the IPO. As of March 31, 2019, approximately $2.9 million of offering and other costs had been incurred by an affiliate of the Company's sole shareholder. Subsequent to March 31, 2019, the affiliate of the Company's sole shareholder has incurred an estimated $2.6 million of offering and other costs. |
Investments in Real Estate | Investments in Real Estate Upon the acquisition of real estate, the purchase price will be allocated based upon the fair value of the assets acquired and liabilities assumed for business combinations. The purchase price for asset acquisitions will be allocated based upon the relative fair value of the assets acquired and liabilities assumed. The allocation of the purchase price to the fair value of the tangible assets of an acquired property by valuing the property as if it were vacant. For transactions that are business combinations, acquisition costs are expensed as incurred. For transactions that are an asset acquisition, acquisition costs are capitalized as incurred. Investments in real estate will generally include land, buildings, tenant improvements and identified intangible assets, such as in-place lease intangibles and above or below-market lease intangibles. Direct and certain indirect costs clearly associated with the development, construction, leasing or expansion of real estate assets will be capitalized as a cost of the property. Repairs and maintenance costs will be expensed as incurred. Depreciation on buildings generally will be provided on a straight-line basis over 39 years. Tenant improvements will be depreciated over the shorter of their estimated useful lives or the term of the related lease. The acquired in-place lease values will be amortized to expense over the average remaining non-cancellable term of the respect in-place leases. The acquired above or below-market lease intangibles will be amortized to rent income over the applicable lease term, inclusive of any option periods for below-market leases. The carrying value of real estate investments and related intangible assets will be reviewed for impairment whenever events or changes in circumstances indicate that the carrying amount may not be recoverable. An impairment exists when the carrying amount of an asset exceeds the aggregate projected future cash flows over the anticipated holding period on an undisclosed basis. An impairment loss is measured based on the excess of the asset's carrying amount over its estimated fair value. Impairment analyses will be based on current plans, intended holding periods and available market information at the time the analyses are prepared. If estimates of the projected future cash flows, anticipated holding periods or market conditions change, the evaluation of impairment losses may be different and such differences may be material. The evaluation of anticipated cash flows is subjective and is based, in part, on assumptions regarding future occupancy, rental rates and capital requirements that could differ materially from actual results. |
Nationwide Postal and Affiliates Predecessor | |
Basis of Presentation | Basis of presentation The accompanying combined consolidated financial statements of the Predecessor are prepared in accordance with accounting principles generally accepted in the United States (“GAAP”). The effect of all significant intercompany balances and transactions have been eliminated. A non-controlling interest is defined as the portion of the equity in an entity not attributable, directly or indirectly, to the Predecessor. Non-controlling interests are required to be presented as a separate component of equity in the combined consolidated balance sheets. Accordingly, the presentation of net income is modified to present the income attributed to controlling and non-controlling interests. The accompanying combined consolidated financial statements have been prepared in accordance with GAAP for interim financial information and with the instructions to Form 10-Q and Article 8 of Regulation S-X. Accordingly, they do not include all of the information and footnotes required by GAAP for complete financial statements. The information furnished in the accompanying combined consolidated financial statements reflects all adjustments that, in the opinion of management, are necessary for a fair presentation of the aforementioned combined financial statements for the interim periods. Operating results for the three months ended March 31, 2019 are not necessarily indicative of the results that may be expected for the year ending December 31, 2019. These interim financial statements should be read in conjunction with, and follow the same policies and procedures as outlined in the audited combined consolidated financial statements for the year ended December 31, 2018, included in the Company’s final prospectus |
Use of estimates | Use of estimates The preparation of financial statements in conformity with GAAP requires management to make estimates and assumptions that affect the reported amounts of assets and liabilities and disclosure of commitments and contingencies at the date of the combined consolidated financial statements and the reported amounts of revenues and expenses during the reporting period. Actual results could differ materially from these estimates. |
Investments in Real Estate | Real estate During the three months ended March 31, 2019, the Predecessor acquired one property for a purchase price of $645,120, inclusive of acquisition costs of $10,120. The purchase price was allocated to the separately identifiable tangible and intangible assets and liabilities based on their relative fair values at the date of acquisition. The total purchase price was allocated as follows: Land $ 179,202 Building and improvements 456,550 Tenant improvements 18,166 In-place lease intangibles 69,504 Below market leases (78,302 ) Total $ 645,120 During the three months ended March 31, 2018, the Predecessor acquired three properties for an aggregate purchase price of $380,477, inclusive of aggregate acquisition costs of $12,047. The purchase price was allocated to the separately identifiable tangible and intangible assets and liabilities based on their relative fair values at the date of acquisition. The total purchase price was allocated as follows: Land $ 165,827 Building and improvements 196,530 Tenant improvements 13,197 In-place lease intangibles 55,439 Above market leases 19,603 Below market leases (70,119 ) Total $ 380,477 For the three months ended March 31, 2019 and 2018, no impairment loss was recorded. |
Cash and Restricted Cash | Cash and Restricted Cash Cash and cash equivalents include cash and highly liquid investment securities with maturities at acquisition of three months or less. Restricted cash is presented as escrows and reserves in the accompanying combined consolidated balance sheets. Cash and restricted cash consist of the following: March 31, December 31, Cash $ 394,217 $ 262,926 Restricted cash: Maintenance reserve 600,053 598,949 Total cash and restricted cash $ 994,270 $ 861,875 |
Deferred financing costs | Deferred financing costs Total amortization expense for the three months ended March 31, 2019 and 2018, was $3,179 and $3,125, respectively, which is included in interest expense in the accompanying combined consolidated statements of income. The Predecessor will amortize the remaining deferred financing costs as follows: Year Ending December 31, Amount 2019 - Remaining $ 9,548 2020 12,727 2021 12,727 2022 12,727 2023 12,727 Thereafter 163,095 Total $ 223,551 |
Fair Value of Financial instruments | Fair Value of Financial instruments The following disclosure of estimated fair value was determined by management using available market information and appropriate valuation methodologies. However, considerable judgment is necessary to interpret market data and develop estimated fair value. Accordingly, the estimates presented herein are not necessarily indicative of the amounts the Predecessor could realize on disposition of the assets and liabilities at March 31, 2019 and December 31, 2018. The use of different market assumptions and/or estimation methodologies may have a material effect on the estimated fair value amounts. Cash equivalents, receivables, accounts payable and accrued expenses and other liabilities are carried at amounts which reasonably approximate their fair values as of March 31, 2019 and December 31, 2018. The fair value of the Predecessor's mortgages loans payable and other obligations aggregated approximately $33,423,184 and $33,586,000, as compared to the book value of $34,510,797 and $34,792,419 as of March 31, 2019 and December 31, 2018, respectively. The fair value of the Predecessor's debt was categorized as a level 3 basis (as provided by ASC 820, Fair Value Measurements and Disclosures Disclosure about fair value of assets and liabilities is based on pertinent information available to management as of March 31, 2019 and December 31, 2018, respectively. Although management is not aware of any factors that would significantly affect the fair value amounts, such amounts have not been comprehensively revalued for purposes of these financial statements since March 31, 2019 and current estimates of fair value may differ significantly from the amounts presented herein. |
Accounting Standards Adopted in 2019 | Accounting Standards Adopted in 2019 In May 2014, the Financial Accounting Standards Board issued Accounting Standards Update (“ASU”) No. 2014-09, Revenue from Contracts with Customers This standard is effective for interim and annual reporting periods that begin on or after December 15, 2018. The Predecessor adopted ASU 2014-09 on January 1, 2019 using the modified retrospective method however, there was no cumulative effect required to be recognized in retained earnings at the date of application. Substantially all of the Predecessor’s revenue is derived from its tenant leases and therefore falls outside the scope of this guidance. With respect to its fee-derived revenue, the Predecessor earns monthly base management fees subject to the terms of the contractual agreements with entities that are affiliated with the Predecessor for the day-to-day operations and administration of its managed properties. These services are provided in exchange for monthly management fees, which are based on a percentage of revenues collected from post offices owned by entities that are affiliated with the Predecessor. The Predecessor determined that there is no change to revenue recognition for base management fees as the underlying services are considered to be individual performance obligations composed of a series of distinct services satisfied over time, for which revenue is recognized monthly as earned over the life of the management agreement as services are provided. The total amount of consideration from the contracts is variable as it is based on monthly revenues, which are influenced by multiple factors, some of which are outside the Predecessor’s control. Therefore, the Predecessor recognizes the revenue at the end of each month once the uncertainty is resolved. Due to the standardized terms of the management agreements, the Predecessor accounts for all management agreements in a similar, consistent manner. Therefore, no disaggregated information relating to management agreements is presented. |
Future Application of Accounting Standards | Future Application of Accounting Standards In February 2016, the FASB issued ASU No. 2016-02, Leases Revenue from Contracts with Customers initial direct costs Leases ASU 2016-02 initially provided for one retrospective transition method; however, a second transition method was later added with ASU 2018-11 as described below. To ease the transition, the new lease accounting guidance permits companies to utilize certain practical expedients in their implementation of the new standard: ● A package of three practical expedients that must be elected together for all leases and includes: (i) not reassessing expired or existing contracts as to whether they are or contain leases; (ii) not reassessing lease classification of existing leases and (iii) not reassessing the amount of capitalized initial direct costs for existing leases; ● ASU 2016-02 also includes a practical expedient to use hindsight in determining the lease term or assessing purchase options for existing leases and in assessing impairment of right of use assets; ● ASU 2018-01, Land Easements Practical Expedient for Transition to Topic 842 ● A new practical expedient under ASU 2018-11, described below. In July 2018, the FASB issued ASU No. 2018-10, Codification Improvements to Topic 842 Leases Leases Leases Targeted Improvements Leases As lessor, the Company expects that post-adoption substantially all existing leases will have no change in the timing of revenue recognition until their expiration or termination. The Company expects to elect the lessor practical expedient to not separate non-lease components such as maintenance from the associated lease for all existing and new leases and to account for the combined component as a single lease component. The timing of revenue recognition is expected to be the same for the majority of the Company's new leases as compared to similar existing leases; however, certain categories of new leases could have different revenue recognition patterns as compared to similar existing leases. As lessee, the Company expects to record a right of use asset and related liability for the office lease disclosed in Note 9. Related Party Transactions. In December 2018, the FASB issued ASU 2018-20 Leases (Topic 842), Narrow-Scope Improvements for Lessors Topic 842 will be effective for the Company on January 1, 2020 as a result of its classification as an emerging growth company. We continue to evaluate the FASB's activities related to the new leasing standard and the potential impact on its financial results, policies and disclosures upon adoption, including the accounting for costs which may be paid by the lessee directly to a third party, such as real estate taxes. In December 2018, the FASB issued ASU No. 2018-20, Leases — Narrow-Scope Improvements for Lessors In June 2016, the FASB issued ASU No. 2016-13, Financial Instruments-Credit Losses Codification Improvements to Topic 326, Financial Instruments - Credit Losses |
Summary of Significant Accoun_3
Summary of Significant Accounting Policies (Tables) - Nationwide Postal and Affiliates Predecessor | 3 Months Ended |
Mar. 31, 2019 | |
Schedule of identifiable tangible and intangible assets and liabilities | During the three months ended March 31, 2019, the Predecessor acquired one property for a purchase price of $645,120, inclusive of acquisition costs of $10,120. The purchase price was allocated to the separately identifiable tangible and intangible assets and liabilities based on their relative fair values at the date of acquisition. The total purchase price was allocated as follows: Land $ 179,202 Building and improvements 456,550 Tenant improvements 18,166 In-place lease intangibles 69,504 Below market leases (78,302 ) Total $ 645,120 During the three months ended March 31, 2018, the Predecessor acquired three properties for an aggregate purchase price of $380,477, inclusive of aggregate acquisition costs of $12,047. The purchase price was allocated to the separately identifiable tangible and intangible assets and liabilities based on their relative fair values at the date of acquisition. The total purchase price was allocated as follows: Land $ 165,827 Building and improvements 196,530 Tenant improvements 13,197 In-place lease intangibles 55,439 Above market leases 19,603 Below market leases (70,119 ) Total $ 380,477 |
Schedule of Cash and restricted cash | March 31, December 31, Cash $ 394,217 $ 262,926 Restricted cash: Maintenance reserve 600,053 598,949 Total cash and restricted cash $ 994,270 $ 861,875 |
Schedule of amortize the remaining deferred financing costs | Year Ending December 31, Amount 2019 - Remaining $ 9,548 2020 12,727 2021 12,727 2022 12,727 2023 12,727 Thereafter 163,095 Total $ 223,551 |
Intangible Assets and Liabili_2
Intangible Assets and Liabilities (Tables) | 3 Months Ended |
Mar. 31, 2019 | |
Intangible Assets And Liabilities Tables Abstract | |
Schedule of intangible assets and liabilities | Year ending December 31, In-Place Lease Intangibles Below Market Leases Above Market Leases 2019 - Remaining $ 649,965 $ 268,293 $ 5,617 2020 856,374 354,296 2,927 2021 825,543 335,784 - 2022 185,795 314,644 - 2023 55,741 311,782 - Thereafter 15,720 2,247,873 - Total $ 2,589,138 $ 3,832,672 $ 8,544 |
Mortgage Loans Payable (Tables)
Mortgage Loans Payable (Tables) | 3 Months Ended |
Mar. 31, 2019 | |
Mortgage Loans Payable Tables Abstract | |
Schedule of principal balances of mortgage loans payable | Mortgage loans payable March 31, 2019 December 31, 2018 Vision Bank $ 15,484,514 $ 15,636,243 Atlanta Postal Credit Union 17,194,853 17,313,481 First Oklahoma Bank 386,311 389,599 Vision Bank – 2018 929,048 936,750 First Oklahoma Bank – 2018 739,622 743,076 Total mortgage loans payable $ 34,734,348 $ 35,019,149 |
Schedule of Principal payments of mortgage loans payable | Year Ending December 31, Amount 2019 – Remaining $ 849,221 2020 1,180,685 2021 17,049,176 2022 661,457 2023 698,181 Thereafter 14,295,628 34,734,348 Less: Deferred financing costs, net 223,551 Total $ 34,510,797 |
Operating Lease Agreements (Tab
Operating Lease Agreements (Tables) | 3 Months Ended |
Mar. 31, 2019 | |
Leases, Operating [Abstract] | |
Schedule of future minimum rental income | Year Ending December 31, Amount 2019 - Remaining $ 4,225,664 2020 5,098,410 2021 4,660,509 2022 2,444,252 2023 1,740,243 Thereafter 2,815,827 Total $ 20,984,905 |
Related Party Transactions (Tab
Related Party Transactions (Tables) | 3 Months Ended |
Mar. 31, 2019 | |
Related Party Transactions [Abstract] | |
Schedule of future minimum rental payments | Year Ending December 31, Amount 2019 - Remaining $ 136,350 2020 186,791 2021 192,394 2022 198,166 2023 151,944 Total $ 865,645 |
Organization and Description _2
Organization and Description of Business (Details) - $ / shares | May 17, 2019 | Mar. 31, 2019 | Dec. 31, 2018 |
Postal Realty Trust, Inc. | |||
Organization and Description of Business (Textual) | |||
Common stock, shares authorized | 600,000,000 | 600,000,000 | |
Common stock, par value | $ 0.01 | $ 0.01 | |
Subsequent Event [Member] | IPO [Member] | Amendment [Member] | |||
Organization and Description of Business (Textual) | |||
Common stock, shares authorized | 500,000,000 | ||
Common stock, par value | $ 0.01 | ||
Preferred stock, shares authorized | 100,000,000 | ||
Class A Common Stock [Member] | Subsequent Event [Member] | |||
Organization and Description of Business (Textual) | |||
Common stock, par value | $ 0.01 |
The Company's Initial Public _2
The Company's Initial Public Offering and Formation Transactions (Details) - USD ($) | 1 Months Ended | ||
May 17, 2019 | Mar. 31, 2019 | Dec. 31, 2018 | |
Postal Realty Trust, Inc. | |||
The Company's Initial Public Offering and Formation Transactions (Textual) | |||
Common stock, par value | $ 0.01 | $ 0.01 | |
Subsequent Event [Member] | Class A Common Stock [Member] | |||
The Company's Initial Public Offering and Formation Transactions (Textual) | |||
Common stock, par value | $ 0.01 | ||
Subsequent Event [Member] | Postal Realty Trust, Inc. | |||
The Company's Initial Public Offering and Formation Transactions (Textual) | |||
Sold IPO | 4,500,000 | ||
Public offering price | $ 17 | ||
Gross proceeds from initial public offering | $ 76,500,000 | ||
Net proceeds of initial public offering | 71,100,000 | ||
Underwriting discounts | 5,400,000 | ||
Repayment of outstanding indebtedness | $ 31,700,000 | ||
Formation transactions, description | The initial properties and other interests were acquired in exchange for 1,333,112 OP Units, 637,058 shares of Class A Common Stock and 27,206 shares of the Company's Class B common stock, par value $0.01 per share (the "Class B Common Stock"), and $1.9 million of cash. In addition, the Operating Partnership purchased a 100% interest in 81 post office properties in exchange for $26.9 million in cash, including approximately $1.0 million paid to Andrew Spodek, the Company's chief executive officer and a director. | ||
Subsequent Event [Member] | Nationwide Postal and Affiliates Predecessor | |||
The Company's Initial Public Offering and Formation Transactions (Textual) | |||
Sold IPO | 4,500,000 | ||
Public offering price | $ 17 | ||
Gross proceeds from initial public offering | $ 76,500,000 | ||
Net proceeds of initial public offering | 71,100,000 | ||
Underwriting discounts | 5,400,000 | ||
Repayment of outstanding indebtedness | $ 31,700,000 | ||
Formation transactions, description | These initial property interests and the business and assets of NPM were acquired in exchange for 1,333,112 OP Units, 637,058 shares of Class A Common Stock, 27,206 shares of Class B common stock, par value $0.01 per share, and $1.9 million of cash. In addition, the Operating Partnership purchased a 100% interest in 81 post office properties in exchange for $26.9 million in cash, including approximately $1.0 million paid to Andrew Spodek, the Company's chief executive officer and a director. | ||
Subsequent Event [Member] | Nationwide Postal and Affiliates Predecessor | Class A Common Stock [Member] | |||
The Company's Initial Public Offering and Formation Transactions (Textual) | |||
Common stock, par value | $ 0.01 |
Summary of Significant Accoun_4
Summary of Significant Accounting Policies (Details) - Nationwide Postal and Affiliates Predecessor - USD ($) | 3 Months Ended | |
Mar. 31, 2019 | Mar. 31, 2018 | |
Land [Member] | ||
Total | $ 179,202 | $ 165,827 |
Building and improvements [Member] | ||
Total | 456,550 | 196,530 |
Tenant improvements [Member] | ||
Total | 18,166 | 13,197 |
In-place lease intangibles [Member] | ||
Total | 69,504 | 55,439 |
Above market leases [Member] | ||
Total | 19,603 | |
Below market leases [Member] | ||
Total | $ (78,302) | $ (70,119) |
Summary of Significant Accoun_5
Summary of Significant Accounting Policies (Details 1) - Nationwide Postal and Affiliates Predecessor - USD ($) | Mar. 31, 2019 | Dec. 31, 2018 | Mar. 31, 2018 | Dec. 31, 2017 |
Cash | $ 394,217 | $ 262,926 | ||
Restricted cash: | ||||
Maintenance reserve | 600,053 | 598,949 | ||
Total cash and restricted cash | $ 994,270 | $ 861,875 | $ 908,244 | $ 694,418 |
Summary of Significant Accoun_6
Summary of Significant Accounting Policies (Details 2) - Nationwide Postal and Affiliates Predecessor | Mar. 31, 2019USD ($) |
2019 - Remaining | $ 9,548 |
2020 | 12,727 |
2021 | 12,727 |
2022 | 12,727 |
2023 | 12,727 |
Thereafter | 163,095 |
Total | $ 223,551 |
Summary of Significant Accoun_7
Summary of Significant Accounting Policies (Details Textual) - USD ($) | 1 Months Ended | 3 Months Ended | ||
Jun. 30, 2019 | Mar. 31, 2019 | Mar. 31, 2018 | Dec. 31, 2018 | |
Summary of Significant Accounting Policies (Textual) | ||||
Offering and other costs | $ 2,900,000 | |||
Depreciation on buildings straight-line basis over | 39 years | |||
Acquisition costs | $ 10,120 | $ 12,047 | ||
Impairment loss | ||||
Amortization expense | 3,179 | 3,125 | ||
Subsequent Event [Member] | ||||
Summary of Significant Accounting Policies (Textual) | ||||
Offering and other costs | $ 2,600,000 | |||
Nationwide Postal and Affiliates Predecessor | ||||
Summary of Significant Accounting Policies (Textual) | ||||
Mortgage loans payable | 33,423,184 | $ 33,586,000 | ||
Purchase price of property acquired | 645,120 | $ 380,477 | ||
Loans payable, net of book value | $ 34,510,797 | $ 34,792,419 |
Intangible Assets and Liabili_3
Intangible Assets and Liabilities (Details) | Dec. 31, 2018USD ($) |
In-Place Lease Intangibles [Member] | |
2019 - Remaining | $ 649,965 |
2020 | 856,374 |
2021 | 825,543 |
2022 | 185,795 |
2023 | 55,741 |
Thereafter | 15,720 |
Total | 2,589,138 |
Below market leases [Member] | |
2019 - Remaining | 268,293 |
2020 | 354,296 |
2021 | 335,784 |
2022 | 314,644 |
2023 | 311,782 |
Thereafter | 2,247,873 |
Total | 3,832,672 |
Above market leases [Member] | |
2019 - Remaining | 5,617 |
2020 | 2,927 |
2021 | |
2022 | |
2023 | |
Thereafter | |
Total | $ 8,544 |
Intangible Assets and Liabili_4
Intangible Assets and Liabilities (Details Textual) - Nationwide Postal and Affiliates Predecessor - USD ($) | 3 Months Ended | |
Mar. 31, 2019 | Mar. 31, 2018 | |
Amortization of in-place lease intangibles | $ 216,293 | $ 210,036 |
Amortization of acquired above market leases | 2,370 | 2,370 |
Amortization of acquired below market leases | $ 88,125 | $ 68,588 |
Mortgage Loans Payable (Details
Mortgage Loans Payable (Details) - USD ($) | Mar. 31, 2019 | Dec. 31, 2018 |
Total mortgage loans payable | $ 34,734,348 | $ 35,019,149 |
Vision Bank [Member] | ||
Total mortgage loans payable | 15,484,514 | 15,636,243 |
Atlanta Postal Credit Union [Member] | ||
Total mortgage loans payable | 17,194,853 | 17,313,481 |
First Oklahoma Bank [Member] | ||
Total mortgage loans payable | 386,311 | 389,599 |
Vision Bank - 2018 [Member] | ||
Total mortgage loans payable | 929,048 | 936,750 |
First Oklahoma Bank - 2018 [Member] | ||
Total mortgage loans payable | $ 739,622 | $ 743,076 |
Mortgage Loans Payable (Detai_2
Mortgage Loans Payable (Details 1) | Dec. 31, 2018USD ($) |
Mortgage Loans Payable Details 1Abstract | |
2019 - Remaining | $ 849,221 |
2020 | 1,180,685 |
2021 | 17,049,176 |
2022 | 661,457 |
2023 | 698,181 |
Thereafter | 14,295,628 |
Total mortgage loans payable | 34,734,348 |
Less: Deferred financing costs, net | 223,551 |
Total | $ 34,510,797 |
Loans Payable - Related Party (
Loans Payable - Related Party (Details) | 3 Months Ended |
Mar. 31, 2018USD ($) | |
Loans Payable - Related Party (Textual) | |
Principal amount | $ 3,544,215 |
Interest rate | 1.90% |
Maturity date, description | The loans bore interest at 1.9% per annum, require interest only payments, and mature between August 1, 2036 through July 1, 2041. In June 2018, pursuant to a loan modification agreement, these notes were assumed by an affiliate of the Predecessor and recorded as an increase in equity of the Predecessor. |
Interest expense | $ 18,616 |
Operating Lease Agreements (Det
Operating Lease Agreements (Details) | Mar. 31, 2019USD ($) |
Leases, Operating [Abstract] | |
2019 - Remaining | $ 4,225,664 |
2020 | 5,098,410 |
2021 | 4,660,509 |
2022 | 2,444,252 |
2023 | 1,740,243 |
Thereafter | 2,815,827 |
Total | $ 20,984,905 |
Operating Lease Agreements (D_2
Operating Lease Agreements (Details Textual) | 3 Months Ended |
Mar. 31, 2019 | |
Operating Lease Agreements (Textual) | |
Lease expiration, description | The leases expire at various dates through February 28, 2027. |
Income Taxes (Details)
Income Taxes (Details) - Nationwide Postal and Affiliates Predecessor - USD ($) | 3 Months Ended | |
Mar. 31, 2019 | Mar. 31, 2018 | |
Income Taxes (Textual) | ||
Income tax expense | $ 39,749 | $ 24,514 |
Effective tax rate | 13.40% | 5.90% |
Statutory rate | 21.00% | 21.00% |
Unrecognized tax benefits | $ 707,920 |
Related Party Transactions (Det
Related Party Transactions (Details) | Mar. 31, 2019USD ($) |
Related Party Transactions [Abstract] | |
2019 - Remaining | $ 136,350 |
2020 | 186,791 |
2021 | 192,394 |
2022 | 198,166 |
2023 | 151,944 |
Total | $ 865,645 |
Related Party Transactions (D_2
Related Party Transactions (Details Textual) - USD ($) | Oct. 01, 2018 | Mar. 31, 2019 | Mar. 31, 2018 |
Related Party Transactions (Textual) | |||
Management fee income | $ 257,121 | $ 312,602 | |
Accrued management fees receivable | 0 | $ 80,800 | |
Related party lease, description | The Predecessor entered a lease for office space in Cedarhurst, New York with an entity affiliated with the Predecessor (the “Office Lease”)]2. Pursuant to the Office Lease, the monthly rent is $15,000, which will increase by 3% on each anniversary of the lease commencement date. The term of the Office Lease is five years commencing on October 1, 2018 (with rent commencing on January 1, 2019) and will expire on September 30, 2023. For the three months ended March 31, 2019, straight-line rent expense was $45,532 and was recorded in general and administrative expenses in the combined consolidated statements of income. | ||
Related party receivable | 45,334 | ||
Related party payable | $ 20,000 |
Subsequent Events (Details)
Subsequent Events (Details) - Subsequent Event [Member] - USD ($) | 1 Months Ended | ||
Jun. 30, 2019 | Jun. 26, 2019 | May 17, 2019 | |
Postal Realty Trust, Inc. | |||
Repayment of outstanding indebtedness | $ 31,700,000 | ||
Cash | $ 4,400,000 | ||
Postal Realty Trust, Inc. | Board of directors [Member] | |||
Cash dividend | $ 0.063 | ||
Nationwide Postal and Affiliates Predecessor | |||
Repayment of outstanding indebtedness | $ 31,700,000 | ||
Cash | $ 4,400,000 | ||
Nationwide Postal and Affiliates Predecessor | Board of directors [Member] | |||
Cash dividend | $ 0.063 |