PSTL - Earnings call transcript Q1 2021 | Postal Realty Trust, Inc.

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Operator

Greetings and welcome to Postal Realty Trust first quarter 2021 earnings call. At this time, all participants are in a listen only mode. A question-and-answer session will follow the formal presentation. [Operator Instructions].

As a reminder, this conference is being recorded. to conference like host to now Mr. would turn over the your I President Markets. FP&A, Cooperstein, of Jordan Vice Capital Please go ahead.

Jordan Cooperstein

call. Thank you. Trust conference Realty to the Good evening everyone first and quarter welcome Postal earnings

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

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

over Andrew Executive release. that, most currently the turn non-GAAP these the I You the will Officer Realty comparable to company's reconciliation now can in find of tabular Postal Trust. Chief to measures a GAAP Spodek, of With measures earnings financial call

Andrew Spodek

are a our first of quarter, the in million we for our upsized lease Realty the a for renewal Postal encompassing gross number an offering well. safe including We earnings XXXX call. February you date first maturity receipt milestones hope XXX achieved and extending on proceeds strong XXXX. raising evening overnight Trust's the marketed master completion XXXX, of quarter all $XX of thank to you of and properties and Good joining Building

the front, of last completion continue approximately with capacity On enhanced million our quite supported our mile, meaningfully execute platform U.S. accretive positioning to financial structure. acquisitions as plenty flex a we have acquisition We facilities. by the we confident Postal to in $XX capital about Service industrial of to continue of expand and remain

rent. occupied XXX% experience we our our and collected been portfolio of to-date, have XXX% is As our

Our lease stream. renewals, enhance properties, composite a tenant stable renewal most notably rate, to revenue master XXX The lease the total enhance us to profile. return ones allow our flows our acquisitions, a already historical that credit XX% accretive relate stable cash of serve and to for

We annualized per since have and in raised share our consecutively our $X.XX unit. dividend IPO XXXX to an

Our investment growing activity provides the our fuel dividend. for

unit. and properties OP mentioned unit XXX,XXX we costs, three including I These $XX.XX include flex for industrial closing mile, last XX acquisition at million, excluding $X.X an XX additional per of square the costs, Quarter-to-date, As on closing properties feet. for USPS XX totaling leasable completed $XX.X million, closed deal facilities. we excluding an properties XX priced interior earlier,

consideration. have OP units We another totaling part also contract as XX under include properties that $XX.X the million approximately definitive of

that we market right the Looking is postal our pipeline properties the opportunities. remains are full finding for ahead, and for

years, progress about a the call over we we and market excited the I the to With team sources the resolve including turn expect ahead assets ability about now buyer fortitude walk and of past the to financial year of on the as tenant. to capital as us. opportunity leader few Given natural offer position are consolidation will Postal a made for and position. optimistic capacity the maintain our of Rob to we multiple units, and to build experienced through have to the our continue with OP and results sheet over consideration, an execute balance a our our and our Service and

Robert Klein

Thank Andrew you our to actively this for than everyone joining Andrew's industry. echo a you us continue thank plans comment fragmented positioned ever of are now to and consolidation evening. that we the and pursue I better growth

by well to ready evidenced key us balance to as our conservative Our scalability, continue competitive as afford our platform sheet advantages be access our continuing as earnings capital. to

share share grew from AFFO year, our our improved share truly into per XXXX. share approximately while diluted consideration last basis quarter's a at substantially by as the grew improvement and the on reflect to taking This quarter to When accretive $X.XX XX% both. this compared per first AFFO of numbers January year-over-year FFO of XX% per FFO acquisition equity $X.XX. reflects raise, activity. nature $X.XX per

At on fixed to adjusted was value debt was and At times sheet. to and million just of approximately X.X enterprise coverage had our we $X.X debt and $XX.X rate XX, million million million our dollars gross March X.X cash times. $XX.X of Moving was facility under charge average EBITDA of a XX%, with debt rate debt weighted X.X%, $XX.X on our annualized the of quarter-end, fixed-rate of mortgages. comprised net XXXX, balance net ratio floating interest to of

we to which lower and mortgages carried overall debt earnings these fund we offering. our able raised X.XX%. mentioned, repay repay of a of the upsized cost January, benefit of proceeds going debt in $XX facility outstanding rate our to on used Andrew forward. will million portion The $XX.X an that million As drive mortgages, of gross proceeds interest retiring the By an acquisition, credit were were in in

and increasing in XXXX. trend for dividend acquisition every flows quarterly stock. $X.XX we cash dividend public our share company Class per and quarter of common equates $X.XX in and of property the Our A the declared XX, dividend continue per basis April annualized XXXX, May since On an to growing of continues AFFO our activity distribution. The fuel cash available to share a on went

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

Operator

[Operator Instructions].

Your first line question. from with Please of with Rob Janney. the your question Stevenson proceed comes

Rob Stevenson

that done months? be have characterize, the the an lease there with that extension? that to to go is should Andrew, next, Good change about how orderly call Is is under we go been you on XX How remaining? any you the anticipated the roll for likely afternoon over the thinking XX rolls guys Or has guys. time? lease versus you as in can and Postal it, be XXXX current we Service administration addressing essentially that in XXXX previous

Andrew Spodek

leases that Rob. Hi are really much don't believe by being I leases addressed about administration. majority thought or of or the the pretty our

the As believe you And to the it expenses. from rises really total they on I no total of know, has are amount Postal the been accounts lease don't There perspective. right focused our Service what under for X% occasion change of now.

in the process are XXXXs. negotiating the of We

as than that a And and hopeful believe are we So XXXXs them efficiently the get can. move to we XXXXs as the we soon done XXXXs lot XXXXs. and will more

Rob Stevenson

are January? you that back that stuff? term that is the five doing are in shorter Is is basically likely be on that they term years to And master they the for? with did the to similar Or lease looking

Andrew Spodek

five-year term is lease Their fixed in No. duration. typical

Rob Stevenson

having release under in much units? terms $XX.X units. should the you contract Okay. OP expecting of in we And talked of then the via of guys How about some that be OP million

Andrew Spodek

is $XX.X majority OP of that in million units. The

Rob Stevenson

deals deferral interest more it somebody Is $XXX,XXX about you the came that here? you and OP to you do tax be more or units? transaction. too seeing attractive Not units small are XX-plus small are how the makes Okay. to price if you. on that being And assume just But $XXX,XXX it the And would worth stock to Is two thinking here doing with nature? time? I sellers motivated by issuing one

Andrew Spodek

are there questions there. few So a in

unit We smaller all, an thought. it just do transaction an ability it of actually case under of to was to unit we went test offered did a call $X let's smoother went. see the It million OP properties million to first So really we as transactions under. and $X than historically, OP haven't amount, that the how

that we and consider the would on, based the something deal obviously, is terms. it So

and are of seeing the relationship us with Postal and ability properties. in operate people our are in that understand the really a contribute The REIT. the interest are opportunity how the amount around understand in they tremendous front the calling confident to us we We what partnering to set cash interested and of because secured flows their are they how the Service. is property us with They

and or that people and of of up them units properties proud are flow are these the these executing with lot interested it us very And of end about are A so even their of families transaction of entrusting deal not calling all actually lot these in units competition. a lot we and entire of transactions that. of are a portion it. creates us a with use But the

Rob Stevenson

on you units? OP And are Okay. lockups putting the any

Jeremy Garber

one-year than limited standard for It's a else. protection The anything calls more partnership on agreement lockup a strategy tax of OP units.

Rob Stevenson

appreciate I Thanks Jeremy. time. Thanks the Okay. guys.

Jeremy Garber

Thank you much, Rob. the very I question. appreciate

Operator

Please from Your Jefferies. question. Jon line your next the of with comes with question Petersen proceed

Jon Petersen

on some lease you if lease structures? these the And us on Thanks. time, a just then of on renewal? make of agreements? you what with these color over this the master rollup And into master leasing more also were more And And color will history they one? little some maybe of spreads give sense? curious Great. bit Can master lease where the leases the agreement

Jeremy Garber

governing properties It question. no rent on that renewal I within of exercise. amount was postal was structured. dollar and to that's purchased of they really It network it a created portfolio the Jon. The wasn't this It be an this is XXX negotiated. it's lease terms way part we before that Sure is were exercised. It's to There a master unique appreciate anomaly This one their services leases. of to the lease predetermined negotiated. the properties. in be was leases

can't company how portion traction, speak the governing Service properties. with I to be some will And I something as lease that a efficiency Whether the have it. discussed structured. that this it to having point. Postal master that so is probably not at that's a of lease It's there logic or was the grows, will a believe of

Jon Petersen

thoughts am of how I there, Okay. Got of just put generally do be to opportunities this volume have after in more thinking opportunities, your then might do out of are you but XXXX you curious maybe a specifically, seeing? then before for elimination guess But And what sure that you guess, we place? I through think were out all and that I play like are kind law just guys then the And exchange? on acquisition it.

Jeremy Garber

So have we I this before. spoken think about

think I a capital as exchange assets. the a we that there of further know, there And for is wanted of elimination people out generational tremendous be There would opportunity a of XXXX these us. their are the ownership the lot in shift to gains.

And the so is contributing then if ability law, XXXX further the best be capital the would do their eliminated alternative. them gains to for through to REIT

believe law that currency or I in is that regulation would that unit OP if our So removed. value increase or changed

Jon Petersen

generally you of right what looking then in deals pipeline now? that quantify, number I just your And Okay. of terms guess, you is Can appetite. are of in terms at

Andrew Spodek

Yes.

articulated, XXXX. we for have million gave we as target $XXX So

pace million. pipeline is on to are We very strong. thankfully $XXX very, The that do

properties. deals a deal and lot of of types seeing lot flow, of of good are We different types a different

so And this meet million year. are will number very, or that for to be very that we exceed $XXX confident we able

Jon Petersen

Great. Andrew. Okay. Thanks

Andrew Spodek

you. Thank

Operator

[Operator Instructions].

comes your question. proceed with Your Please the line BMO. Lee Frank question from next with of

Frank Lee

the Any the of Andrew, everyone. for year, this how activity remainder stock's tapping ATM we about opportunistically to think year? the thoughts given afternoon should some performance? of Good and your the acquisition Hi. pre-fund on acquisition funding

Andrew Spodek

pass am to I Hi field, Rob to over to this I that's question. the if Frank. appreciate okay. actually going

Frank Lee

Fine. Yes. Okay.

Robert Klein

Yes.

can So things big know, as do equity a side. with of you have here the tool-shed we quite we on

offerings from unit to looking regularly sources deals debt. and multiple at everything OP then So we ATM the to have of our been

opportunistic be any to of a So and mix we of those things. are going healthy with absolutely all

fit. a with sheet lots fortunately, in position, of room are strong balance very fund low see to our leverage We being we acquisitions and our as

answer the us. that well fund the we yes, at to all going available as to have of are types different equity So look to of debt as is we those

Frank Lee

just a want then strategic plan XX your on postmaster And thoughts think on this network? I months out Great. the could the laid was get have Okay. USPS you impact ago. that question to on

Andrew Spodek

just are which just the the post So the fact are people. these not have the is acquiring, but it in the His to importance obviously offices, the retail that like just we General invest lays we to to And Postal retail network, of plan in this have he of hear the in American of the were invest buildings the out to very not we everything and Service also that would that the that echoes we Postmaster feels but not network, all customer public. invest critical experience. happy gone that importance network the buildings, said infrastructure, since just

from And so to reassuring. the hear was that PMG very

Frank Lee

Great. Okay. Thank you.

Operator

next question Please line comes from of proceed Your Height question. with Markets. with Groshan the your Ed Capital

Ed Groshan

Thank question. you Hope well. are afternoon. for my you taking Good all

what get that the guess consider the of would the Just play any option bank debt expand make there, follow on factors go bank have Or before to expand still we to to on you going line? would consideration And we into to it? to accordion to it? I the Frank's come question cushion to

Andrew Spodek

Good Ed. Thanks capacity Currently, ample on question. our have Yes. we facility.

our exercise. think exploring I to other don't just of things have even But to We we do need have $XX million debt, on off back we our We capital That do that that are yet. source like alternatives pocket. include that do can increase can facility. the in accordion additional put capacity.

And the we the need because have year. pipeline fuel have we at left capacity for do expand to don't our so a debt enough our to moment, acquisition

Ed Groshan

that's more from can those you If there how do going you capacity Is of free us lot? Okay. to do go the you much have give Is there some And properties? any? properties? were sense a a just mortgages,

Andrew Spodek

and a to are for different not we counted they covenants required capacity be whether met with can have properties want that an encumbered be unencumbered test do always facility. We we or choose or are to different our toward if as test

did fourth about we made that a it the think you Warrendale, we and term, the the bought with sense size that quarter, was rate. and actually something put And that's the a mortgage time. consideration on know, that as So all in we the with because with

from that. we see, rather thought we quarter, debt better to a And offering, last our the actually are first to use line So because have of equity et was better you X.XX% always capital a mortgages we But in of few thinking about it and the it a paid our facility. the general, use cetera have on our to than use outstanding. in quarter, capital use proceeds it's can down

Ed Groshan

Feds few revolver And for going help Yes. the to down. are out closed you line a the years to keep

Robert Klein

Exactly. That's right.

Andrew Spodek

right will That's right. do the we obviously thing.

will our cost We down. keep debt

Ed Groshan

And you Right. the there. answering question thank your target. Andrew, is million for $XXX

way on that like, work the the You do can of are like do you to $XXX can will at And you sort you your $XXX Do to have you million? $XXX we i.e., think do pace get more for get answer sense point? million want. this to million. is you cut you, that than clearly out expect you Or easy

Andrew Spodek

Look, So we given that have million. I guidance appreciate the is the $XXX question.

that may of as progresses, out. where things guidance. year that's we the But we today, lay adjust As

Ed Groshan

I Okay. much. so I appreciate have. That's that. Thank all you

Andrew Spodek

Thank you.

Operator

And end Ladies question-and-answer gentlemen, like the Mr. Andrew CEO, turn call we for would of and closing have back I remarks. the the reached Spodek, to session. to

Andrew Spodek

healthy today. Thank everyone We coming taking you. forward with to call next connecting join out months. this myself of the for hope your and tie of team, us behalf and you for thank safe look you is over entire On busy to staying day and the all that we

Operator

conference. Ladies and this does gentlemen, conclude today's

participation. Thank lines you your at for this You your may all time. disconnect

Postal Realty Trust (PSTL) 11 May 212021 Q1 Earnings call transcript