PSTL - Earnings call transcript Q4 2020 | Postal Realty Trust, Inc.

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Operator

Thank you for standing by. This is the conference operator. Welcome to the Postal Realty Trust Fourth Quarter 2020 Earnings Conference Call. [Operator Instructions]. I would now like to turn the conference over to Jordan Cooperstein. sir. ahead, go Please

Jordan Cooperstein

afternoon, Quarter welcome Earnings Good Realty the Trust Fourth Conference everyone, you. to and Postal Thank Call.

statements Officer; to limitation, will Robert On Andrew the contained the statements this on a the Chief are any in information, Actual a week use President; be obligation the The the affected events specifically forward-looking update statements Please made on for this variety Spodek, have Brandwein, include the of Financial Klein, company Chief Securities Executive forward-looking of call Accounting call Officer; be risks Reform those that provisions Jeremy that including, harbor note may today, Officer. statements and Matt we and conference safe by results Statements those beyond any does described Chief Litigation without forward-looking and XXXX. whether Garber, by the company's Securities of including, may call. and statements, not are filed XX-K, materially new Commission are company related Exchange the disclaims which company's not statements acquisitions covered control, forward-looking its other this among are assume Act and to differ later result from and on of effect with otherwise. forward-looking, in facts in will Private and timing status the of forward-looking as the contained future service. filings. ongoing our or pending terms pandemic factors historical others, COVID-XX by our and considered our and the its the These postal negotiations and statements business; of

operations. certain funds the measures, company Additionally, from as financial on non-GAAP from operations such and this may refer funds call, to adjusted conference

these You company's in can currently find GAAP release. comparable tabular the measures most earnings the of non-GAAP financial to reconciliation measures a

Postal With Andrew be Realty on will Chief Executive Investor the website. that, to of over Additional Officer Relations Spodek, page our information may call the I Trust. turn of found now

Andrew Spodek

Good all Call. Fourth for Postal are our square normal Postal to IPO. we joining doubled was for Trust's afternoon, you footage and new and success a Realty XXXX and safe return Quarter that quadrupled We revenue than and our you portfolio more a all XXXX soon. Earnings hope since well thank our We Realty. can

course credit our Logistics million acquired year, acquisitions the for Over of we in borrowing properties year. XXX growth. our facility to the the our raised the successfully We for million, and $XXX $XX support under within gross increased our exceeding goals capacity USPS over network proceeds

component accretive we proceeds gross that additional access reloaded and increase opportunities Just of raised These on we to appropriately in offering continue facility. scale base our broadened positioned accomplishments out highlight sources oversubscribed our infrastructure team. logistics an important logistics various of capital believe opportunity our are focus as it. the the the well Across of as of the and country, is of USPS on to network the is our we of to pursue our successfully given after investor platform a there critical the many that that consolidation ensure $XX USPS investing capacity and our million an the commitment We network. further and in year-end, proving stability we credit an platform, the are the strategy, to in our

Industrial, feet; Last less properties within feet. our platform we XX,XXX are: classify terminology Mile, Realty's are which are square square which with square than properties to Flex, adapting are are to XX,XXX properties to and categories this network. footage properties grow, X,XXX square feet; X,XXX The greater which Postal As appropriately continues than our

Kansas; and in Pennsylvania; purchased Topeka, Postal industrial located Warrendale, we Over the past two Alabama. Birmingham, quarters, properties

building being include quarter acquisition North XXXX fourth properties of Carolina largest. our the with Greensboro, office, warehouse Flex office Our and retail, the

portfolio. to backbone leased USPS the focused Finally, the and XX% properties our we of the these relative continue The our approximately network, remain are fragmented, of adding capital accretive cost properties. properties Mile and given postal for logistics investment size of comprise on postal XX% to are highly relationship, market These and well and are positioned we Last opportunities. approximately postal is we believe

a started. aggregated commitment Service, As we acquisition spectrum further in of properties, to their network of of renewing our universally opportunity the the universe. evaluate we infrastructure network. throughout and have USPS country. United Postal start, is we've properties the largest as our logistics owner total only program is XXXX X% property to credit the And recognized and the opportunities continue of quality to by importance this leased States their The enhanced Postal only demonstrated of wide the approximately strong Postal off growth critical for tenant, logistics gotten a This

rate to We or exceed acquisitions of within cap of range expect to weighted meet $XXX X% million our average X%.

activity Let some and Jeremy me initiatives. operational it give turn over you on to other acquisition update an leasing, to

Jeremy Garber

Thank you, Andrew.

occupancy, rents. maintained of our For XXX% we portfolio and XXX% XXXX, our collected

are our We properties. receipt executed leases XXXX of for in of holdover and all fully XXXX

January, executed lease Together our share other master years. average is renewals, subject are lease that this master weighted X now activity previously was in lease to We for this XXXX. with leasing the and a to in our we February to to set The brings that under lease received renewal properties renewal term next XXXX. pleased expire XXX

annual now XX, are our lease just which our of expirations, represent March of on working rent. We X% XXXX as

owner. acquisitions Director rate between XXXX leasable million joins weighted the at Evercore quarter occupied our of our capital contains After Rob We finance, Partner banking Officer. the average net real an positions bringing fortified in investment as teams, we and knowledge additional March accretive and accounting over our estate approximately while at about XX From us forward prospects and acquired through feet. for strengthened Managing $XX adding we the Financial Partners remain and continue from we've perspective, human a like welcoming members with call a leadership corporate team, very discuss results. cap extensive an you I senior a and with close As sharing Properties, to private acquisition, look our team, is at Robert with Managing his of million. markets team Monday finance our estate progress portfolio the our operations of XX, our volume to real the X.X% as With XX, and X%. to number With Klein of Chief new fourth million active our $XXX million fourth growth would financial turn properties to confident to total over quarter the that, capital approximately this and to Rob throughout a XXX% X.X had interior year. to square March $XX of

Robert Klein

through together. joined the evening. a to this strategy, all foundation Thank thank the industry look shareholders imminent. of new you and and be and you, a growth and company move all because of grow extraordinary The value shared Jeremy, I'm of strong part us ongoing unique vision to as to and same the opportunity to and we Postal for team forward we management is all business for with accelerating Realty's I plan. and fragmented of of goal the participating engaging you the execution to with I our honored consolidation of contribute excited existing deliver ahead to team,

share a both XX% per to share the FFO and FFO results The diluted quarter in as grew improved to AFFO to pleased equity common per on share the which a compared for of raise quarter share $X.XX growth share strong from per while last substantially AFFO XXXX. from are accounts fourth last grew year, We basis $X.XX. to per our $X.XX July.

FFO and diluted For $X.XX AFFO year, the $X. diluted per was share share per was

offering, on we cash rate $XXX purposes. acquisitions, weighted for million of interest $XX of debt million Moving sheet. had a balance Warrendale fixed-rate approximately interest facility which with average the portion $XX.X XXXX, other as mortgages. of on facility we to of in gross fixed-rate at outstanding a of million years. proceeds an of mortgages and December rate upsized of as rate to million mortgage for comprised used of XX our facility mortgages was on distribution that million $XX.X $XX XX, a of X.XX% $XX rate The At floating and include X.X%, million the gross of million $X.X Subsequent debt general credit repayment our on fixed well in and of corporate X.X% year-end, carried debt our the raised a repayment of

at have combined a XX, million As approximately mortgages average of we million X.X%. $XXX of interest and our facility $XX $XX.X approximately million rate fixed-rate of March weighted outstanding on credit

to $X.XX consecutive flows of basis of common XXXX. cash AFFO since growing May our share XX, distribution. and an $X.XXXX company A on in declared acquisition for Our increase the public cash share we the property sixth dividend On activity available dividend The stock. equates support represents Class January a quarterly dividend and XXXX, per annualized per and went

We are prepared are prepared questions. concludes open plan. of our remarks. This like year our Operator, call growth strategic well positioned we'd the to another for execute for and to on

Operator

Instructions]. [Operator

from Stevenson Janney. question Rob is with Our first

Robert Stevenson

and per not were a been acquiring assets, a foot talk recently. the not or whether that, like well of about quarter per market, than bit to driving the there's leases you sort you certain there? was the that Can on et whether was was or more guys below square little rent what a read cost what bit redevelopment cetera, little square had on wanted first get -- acquisitions? and it And the just color seems lower demonstrably or not some foot color whether the play It

Andrew Spodek

two a we would rents. it purchased industrial office the appreciate buildings though by space. Kansas I large Andrew. best portion warehouses, as categorize The very being is this have that numbers that in assets of They're being even is for skewed are Rob, Topeka, question. used low that

the the was so per rents low, square are because price foot purchase of size low assets. of the And the just

Robert Stevenson

the potentially you then And the managed can is and family bringing the any impediments the in what of timetable assets in for Okay. remind assets? us

Jeremy Garber

Sure. Rob, it's Jeremy.

So created related REIT that original the seasoning acquiring has the for restriction ended. the assets from period

assets. know, for with years. these been managing we've assets As very many familiar you We're these

been As of today, But soon let information contacted have additional the of as will representatives any family. we by to we you have know as we not share.

Operator

is next from Petersen with Our question Jon Jefferies.

Jonathan Petersen

XXXX? Anything rates, the to your acquisitions evolving and sellers? that turn XQ you're Maybe rates some done far. pricing maybe the kind on so of motivations as properties Interest how with ability all of stick the stuff. color rising, of that cap stuff that we in you've to economy certainly Any rates paying? into Any behind is of changing and page just reopening, kind acquire cap impacting

Andrew Spodek

cap continuing constraining question. still We're to our assets, purchase. lot purchase to rate point X%. past of X% hasn't seeing It this average weighted changed people's is on are they're sell view Jon, I sellers We've motivations properties, Andrew. -- for strong rates their their ability was seeing to directly much very on appreciate from seen kind from to everybody, people. This and within pretty different our cap and year general. future. We're a in range of on the and strange liquidity their of it's their affected we of interest

And from seeing us. that so interested still to of a inbound selling sellers calls lot in we're are

Jonathan Petersen

aware stuff That's leasing -- the we renewals was see like. of was going on XQ And I you we're that volume, Got enough can be was the of color spreads meaningful that guess, I it. what any movements revenue helpful. holdover. then in it guys should in a lot to if give you there any renewed of? look wonder And that

Jeremy Garber

these So We're to I'll improvement not to shared and we X% of sharing we annual renewals. in closed XXXX talk successfully have a spreads, all properties. XXXX. that expect but releasing see X% on the out to NOI we Yes,

impact QX, to In terms significant I relates holdover to going as anything in believe of see the any we're it renewals. don't

Jonathan Petersen

it's then one positive, straight-line positive rent I negative. And turned noticed quarter, $XXX,XXX, question. this usually modeling Okay. the adjustment just almost

Just there there? call to one-off anything is curious, out

Andrew Spodek

Yes.

So holdovers. associated part includes the rent the straight-line our with reimbursement of of

the So that. That to fact we in led all the squared were certainly, based that increase mentioned away. an on holdovers that

I the number imagine that. than certainly forward, be Going would less would

Operator

BMO. with our question from is And Lee next Frank

Frank Lee

are presentation, your coming of non-U.S. from X% disclosed you [indiscernible] In rents tenants.

industrial tenants And this expect acquisitions? from assets? over industrial curious, to percentage from we time recent as or this acquire all increase you more flex is Just could office

Andrew Spodek

don't that individual solely anticipate facility in tenant. Postal Frank. it the but it, are transactions tenanted of that our properties that that Yes, X% year. This last a number service specifically make they to Andrew. we at are that source sense, We've Warrendale tenant look end secondary that service. do significantly if related purchased do By continued and is purchase properties we have X and have tenants are because, a secondary occupying. at Postal rise, the do is is that rising will We we again, deals Thanks, the in the additional that to by nature, the focus very that

Frank Lee

with then office pipeline in been or how impacting assets, office properties? or completed the interest view so on And is Okay. lower your more rates, this which versus at rise either post cap recent rates has traditional far industrial acquiring your the

Andrew Spodek

Thankfully, cost low, and is we a good our facility. very of have capital pretty credit

from with and all in We continue to at or try replacement Postal that to up the understanding we and cost that's interested do. value that the for we good properties it basis do a we'll they from continue postal deal-by-deal a underwrite if all underwrite is in be way facility that sense basis. different estate particular need it's a that look the in to perspective, types a properties. facilities to to that. at can would being or And the the deal property real these and industrial area, larger to If at the asset the like want right? on service then That's We service in, makes below property-by-property that Last Mile a everything

Operator

Instructions]. [Operator

from is Davidson. Our next question with Barry Oxford D.A.

Barry Oxford

on Jeremy, to Great. kind to from XQ. high driving basis? going looking CapEx buildings quarterly the is out line, the saw to pay Or that fairly of that at one, that? going you're more it a was there, XQ of Is typical X CapEx or be X behind jumped I

Robert Klein

This Thanks the is Yes. Rob. question. for

those revenue And catch-up vary projects. the was the that nature So those to holdover CapEx CapEx expenses. were were leases high with there timing related Matt these and well. to quarter-by-quarter, But in that and QX a on onetime as mentioned earlier. rent based leases executed the recurring it's expenses of also were from given going associated Obviously,

that, think don't that's to going I So something that's quarter. each occur

Barry Oxford

occur, makes bulk I when going that in pipeline, Or to No, sense. the to And still occur more going your at forward are the question, area? Last are you will then the a acquisitions Great. Mile? your it those Okay. be look and in Flex where guess, going Andrew, of

Andrew Spodek

properties to quarters Last in Thanks, Flex going asset within they heavily we the grow Look, -- And from Barry. in believe that From different are that I that business. network. types continue are the Services want believe fall properties We all by, looking more is that you're Postal in, within the continue sense logistics industrial. that Service the real to acquire share as at the they the standpoint. be see to that of perspective, as go and quarterly uses a be quarters we And we're estate or Postal Flex looking certain that not or this our makes weighted need for space. to to lion's a Mile

particular Realty one by asset diversified, area. of have the we but by class, region by in one of we geography. within Postal But focused so is believe space And just different these We that owning we're well. we benefits nature, classes, asset and as that look and aren't not Flex also that

Barry Oxford

it be Is to say from fair opportunistic you'll quarter-to-quarter? just

Andrew Spodek

Yes, fair that's very say. to

Operator

question is Gorman from BTIG. next with Our Michael

Michael Gorman

itself? of Have Andrew, the purchase the any wondering they that the given have there selling facilities to any in facilities portfolio? you I with pipeline interest the USPS that they was relationship in in USPS, acquisition just opportunity from is all shown their have any the owned

Andrew Spodek

are buildings in, we to but are buildings majority nature, we're that business. have that the they're that properties move building. Appreciate out of Those not are, or an vacate the to they're want by not question. that interest things buildings, of their it's the interested shown they selling -- own looking in They only vacate just our

that so you they they an occupying. expressed in currently I have not When will interest buildings let they And the do, are know. selling

Michael Gorman

the a or that there represents of criteria? it amount larger building's That Flex it an the then So make your for some And does go much to certain meet buildings up USPS is a when of how revenue lower in have building the acquisition, it. you're to Got the makes you willing in the acquisition to right? for think about bound industrial buildings, sense.

Andrew Spodek

From buying focused occupied that I'm my by Postal perspective, really on the Service. are properties

really really from my property tertiary Service. of and We and that Service But the and them stick standpoint, secondary with sense, If we're driving what pursue makes estate Postal it will The it's and underwrite the is deal we're tenants by real not motivation. on. can are single-tenant occupancy we a sense the focused opportunity. Postal to towards. then It's important make to make we the it not occupied sole want the really not is what

Michael Gorman

on Got for noticed seller to number, hadn't summary. before. assume me. similar one it. that that small structure in And thought financing was then the something the one the that's seller's OP And OP a I financing seeing an where It's requests but if there, structure in I or in of unit last the financing debt case, I was deal stake the kind building. increased wanted are keep end the unit that to in your they that it holdover you discussions? for

Andrew Spodek

Sure.

a So sellers interest want something the we currency. pay not very seller. in purposes capital unit past. driven sense OP OP it in transaction We we don't something doing gains have And that accommodate. standpoint, that the From advertise see by flow, And transaction. that other because not they're conversations. using we to from it's are or that for unit the made doing it tax cash seeing for, they something looking want the in replicate did. whatever the their It's that, will for a common structure. interest we seller by a we is It like done is do. was I But to motivated if that they

end of we Sometimes a flow. end that those see driver sometimes And being up continue but with deals done to deal being that and believe of units OP they're interest. up kind they good cash, we'll

Operator

[Operator Height from Capital next Instructions]. Groshans our Ed question Markets. is And

Edwin Groshans

just the that one, the these holdover forward? expect had CapEx, a have I financial had holdover the on Like first on to of the Can like they going I is want an statements? we lease resolve, when has seems impacts off they couple And should lines. leases? but do impact the about you straight questions, start impact on talk It with something then type an holdover.

Andrew Spodek

Andrew. Ed, this is

very are will backlog documentation is us. 'XXs new hoping and That of the behind us. the efficiently. XXXXs the that that happy XXXX of and move lease that the We now a that leases believe the to document behind more are place. lot much We We're with put in do had XXXXs was movement

won't hoping be won't so and And that we're that, a issue. backlog recurring continue

Edwin Groshans

in Great. that a And lease a That's like event the happens then it isn't while their once consistently USPS as renewing then. sounds documents. something

that should forward statement, So your efficiency we okay. going -- expect

Andrew Spodek

lease something And time. some Yes. document happens portfolio believe rollout throughout change see that is document The often. of was lease I major very for not this new their a we'll don't --

Edwin Groshans

you expectations And were I just want guess then Could general quarter-over-quarter. that for be was look expectation I They to in briefly to line. little what administrative expenses. just in bit set on would XXXX? our and of a down the touch

Robert Klein

Sure. Rob. the Ed, This Thanks, for is question.

of IPO, G&A. heavy had So a we load when we started

incremental increases, we to G&A has grown, of the down. as revenue, will you'll revenue growth a and continue outpace we've each believe decreased. come year ratio of percentage as to continue However, And see those G&A

equity-based you of that's executive have, substantial a compensation We amount paid as comp. in know,

metric we the a at revenue. as look of is percentage cash generally G&A our And so

Edwin Groshans

as opportune pressure market X put It to the on consecutive access the Certainly, growing that All to Okay. is growth. a has on then touch is of dividends, it's Postal attracting little that's right. and in right? seems just capital raises good. and And bit

impede So growth? And maybe just raises the point dividend can you where dividend? start talk a expectations about the there to with is

Robert Klein

Sure.

to look, dividend quarter the to increase each AFFO goal grow keep the dividend our is as So covered. and we

throw XX% have some X We increase the QX consecutively for we've our year-over-year the and dividend achieved And since stats increasing just out of dividend. about there, XX% 'XX a to a quarters. history past

the one of the is X% discussed yield I as $X.XX per want dividend today, know thing close I up know address ago, came So I dividend our past. that did share X.X%. some we've and market current time which yields to approximately But in

viewed no be targets are dividends. longer they a a or on these maximum our cap future should nor even However, as

Edwin Groshans

to it Fantastic, the -- you for and did be well. talked could paying be point that as that up, uses about I really bring But when used offering from and just did appreciate about on AFFO. question, dividends. dividends. And flow, report dividends Is last All right. last my today's focus is the quarterly cash could still the know in And from dividends for talks that I the you correct? in cover then you as did

Robert Klein

That's correct. Yes.

Operator

question-and-answer will And turn now we to for I Instructions]. end session. Spodek, the have the [Operator closing the remarks. reached of call Andrew CEO, over the

Andrew Spodek

really Rob, joining of behalf Jeremy, today. On us it. appreciate all entire and you We thank myself the team, for

Operator

And at may this you time. your conference, participation. and concludes for lines disconnect Thank today's your this you

Postal Realty Trust (PSTL) 24 Mar 212020 Q4 Earnings call transcript