PSTL - Earnings call transcript Q3 2021 | Postal Realty Trust, Inc.

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Operator

Greetings, and welcome to Postal Realty Trust Third Quarter 2021 Earnings Conference Call. At this time, all participants are in a listen-only mode. A brief question-and-answer session will follow the formal presentation [Operator Instructions].

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

may begin presentation. your You

Jordan Cooperstein

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

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

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

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

Andrew Spodek

Service successful and leased share afternoon, execution excited Postal you cash flows from accretive to quarter delivering plan, rents. acquiring assets, us thank another for today. strategic Good to the our and in-place our of joining I'm stable on

additional financial we This quarter, further company's the support strengthened growth. to ongoing flexibility sheet providing balance our

on As attractive added to bringing the portfolio acquisition leased properties by year properties XXX the postal through $XX we Since the properties rental $XX for to year. grown Xnd, targets more meet count exceed to annualized our Postal IPO, the to nearly In have for property million X we approximately our times. source continue approximately third our to million, $XXX income total or acquisitions pace tripled leading industry Service, and square quarter footage November our our consolidator XX quadrupled we our and of opportunities. the for than million, for

our of for portfolio runway square represents the additional USPS, footage plenty still the X% providing growth. under of to leased However,

executing to rate Postal remain square foot critical in Given fully flexibility, Milwaukee our targeted and a on the in our financial quarter Service. downtown transaction network, represents we below acquired partner price mission we $XX industrial This occupied our a confident strategy. end, Subsequent our by as reputation a purchase range. cap million, XXX,XXX property

first for rent, entice The pays largely capacity, Postal other relevant multiple find our buyer want the the understand has as that track to and country with of see their we assets as assets will the irreplaceable assets Service. remains new quality, who sellers financial for and interest from continue Postal is leased personnel. start to us. lease properties that need right remain the we any high tremendous our assets market consolidation relocate The to and The value as in its supports proposition to natural characteristics onsite buildings Postal it Realty be could continue to Service e-commerce owned range. individuals. us by structure large we delivery. and to last rarely continue value our and proven us to that investing ability ever. any private an record With ever given allows and mile below in they targeted portfolio. sources critical are process we offer in all a highly logistics we to consideration, of fragmented network decades the working potential reiterate diligence may be As operate USPS growing of industry confident expect pursue these our to due critical the need add opportunities, without operate for these infrastructure ago I the that that Postal our over mission But to

secure have We pipeline, now operate to and our robust supports for effectively properties all turn our call create which I'll and of proven ability a flows, and to a an cash over stakeholders. experienced team, competence value to stable Jeremy. own the

Jeremy Garber

XXXX, third of In in third Thank past of the XX% XXXX, we rental the reflecting quarter over completed and growth year. you, internal the Andrew. acquisitions quarter produce income from a increase

to property. XX As third Andrew quarter XX,XXX feet from square and interior XX inclusive November properties, net XXX,XXX last we properties, from through mile square mentioned, Xnd, portfolio leasable feet of acquired our properties feet XXX,XXX square XX,XXX and adding the during XX one square feet industrial flex from

total leases our each rents. of once representing manage As of years our again basis. XX% remain collected an for the anticipated, we next expirations three We effectively lease renewal annual rent on our approximately up in XXX% and of

one USPS less And a our gave Ohio. previously, property East the rent. property East and square XX, terminate our half have percent in to portfolio footage the annualized XXXX, lease Liverpool, notice of The of at September they vacated. of as represented stated than As Liverpool

evaluating the building. forward moving are the for with alternatives lease for We property and marketing

these XX service. selecting speaks As we our plus over underwriting as very we process the rate. retention well higher to This years, last be that in the a buildings, have to maintained for reminder, XX% the to locations need determine rate important Postal as

in we investment This sector. accelerate provides over focused managing, in deep through trust advantage as our primarily to decades USPS and to results estate on third real and believe these the now properties position. and assets of our Postal the traded quarter walk will call history I'll a to publicly continue singular acquiring us of only the Postal leased to As experience operating with Rob capital the factors scale. we turn bring all

Robert Klein

Thank you, Jeremy, and us joining on you, thank everyone call. today's for

we what plan Following up well further structure. the executing is on to supported both our capital discussed, to took by and on our Andrew Postal continue Realty Jeremy and steps strengthen growth positioned is

diversified with a and mix and $X.XX maintain of debt. floating The quarter's sheet of this share funds third from funds reflect per balance from rate with of fixed adjusted operations share. per We a diluted results $X.XX operations diluted

September weighted approximately approximately of $X X.X% million XX, interest gross of of of million facility with $XX.X As revolving a fixed cash XXXX, of comprised credit and million million of our floating and rate rate debt average debt. of rate $XX we on nearly had debt $XXX

below At have consistently XX.X% respectively. net end, X.X targeted times We quarter adjusted those debt and annualized net metrics XX% debt remained were our EBITDA. to to value enterprise X and times

flexibility the of pricing unsecured and a XXXX The a January discussed a facility As loan. third a term and as up aggregate that our to and respectively, grid, during the number provide line additional credit other needs lower greater on our platform. accordion grow revolver we new last senior quarter, capital includes features new to million loan XXXX we term and of revolving an facility dates our with into features to for operations maturity entered and continue $XXX in call, in

and the mortgages. lowered approximately have approach million $X access provide of In interest us third quarter, necessary partnerships the rate operating for of fixed approximately $X.X rates ATM that issuances established multiple with financial Additionally, with sources capital program optimize management. our total million. flexibility disciplined our our to funding The unit on the and of we continued we consideration we regarding

platform business, the invest growth total going people, incremental support and continue we increases. forward To experience our Given infrastructure. our these of ongoing initiatives, expense technology some of G&A to our will in

And a Furthermore, consistent note on raised share. growth, expect basis, We company's will to our I'm be IPO. quarter quarter-to-quarter, our an may dividend our of G&A quarterly we variability revenues decline. $XX.XXXX have while since some will Directors every scale. our raised that of our of per benefit pleased percentage as dividends the annual there Board we Reflecting cash from

well look we return our ahead, total remains profile positioned. As

retention have and proven long contributing dividend. growing a to lease of a cash and We rate stable history flows historical tenant and a high creditworthiness

execute a of on to and concludes Additionally, our by and increased we to for would pipeline have further will industrial a well we Operator, positioned new balance This sheet providing robust unsecured facility mile, questions. open us prepared allow call facilities. our remarks. like flexibility flex the last USPS, that enhanced credit capacity

Operator

Jeffries. from line comes [Operator Instructions] Our Jon first with Petersen question

Jon Petersen

an industrial had your So fourth quarter, at in looking supplemental, you the acquisition.

maybe you this. think Milwaukee. was said property bought guys I you I that think didn't quite catch I in a Andrew,

cap be what at that terms mean, about across how And give If guess as I going value industrial. dollar you will looks us of into the from your think acquisitions think the look properties as a two XXXX, you I in change rate we on forward? like can more is of maybe ratio there? do then it third some close will maybe year, out we I details

Andrew Spodek

which range. order as the in buy range is to X% buy that industrial cap much a it to it's property, rate difficult X% within targeted, So knows, had to everybody pretty large we the

in the the all we're is or acquire And Xs. this mile, quarter. target in to important So is I Postal long low they're as this and types, source that We Service this happy as different it's last target to it's asset would the able Postal important asset we're in say an whether past below industrial, and to Service. flex properties the range. very

Jon Petersen

that to might then may terms an about of some XX renewals? terms sticking on there expire. there of are leases about the I points negotiations in you be guys holdover or think and have having press be that guess, expired is in talked anything release, leases to scheduled there the And in

Jeremy Garber

renewing So as getting continue vintages, renewals. a XXXXs the with you annual all process know, lease on are go We're on together. so we through USPS done to

and of terms a XXXX have an to and processing on We our agreed continues documentation. LOI be just it all

So will issue them be all with don't hopefully end. we that expect any there in before year coming

Operator

of question John Kim Our the BMO. from comes line with next

John Kim

you've of you quarter ask Just the if what elaborate agreed versus during could signed both to expiring, the you the and the for rates wanted remainder on year? that about to renewal

Andrew Spodek

release as will What is spreads somewhere bring rates So don't we NOI that on annual X% and into X% with portfolio. the share you between we street rates. renewal specific renewal know, do the

John Kim

I some market. were was a below think of leases your reference there that

I wanted just on to was actually rates brought renewal? So that see higher to if

Andrew Spodek

X% seeing discuss that at market, as as X% market. are year-over-year. certain that our leases it discuss are rolling, rents roles, When we're a But we certain rents below lease to we are There portfolio. are increases the

So on anywhere a five NOI year XX% XX% between and and it's increase. vintage,

John Kim

With declining do cost your quarter? inclined fourth getting debt more larger you for announced acquisitions of [WACC] you’ve overall industrial to attractive. the and like more Are your

Andrew Spodek

As past, in concentration be industrial I some kind stated in in mile. important go have concentration may I are properties a flow flex the so, the Postal use. or mean, the as don't and takes the higher deal have quarters we last us. flows. higher as may It's for that flow or particular There deal a asset Service, how to specify will or quarters of any type the really target long we as

John Kim

you to -- other I you ability. industrial any side, But particular, on on focus critical that them. one USPS the that tenants? assets at opportunity leases, are re-leasing do when look in opportunity? has know for And industrial the mission open you to asset in that there I acquisition is that But realized to had maybe

Andrew Spodek

are Postal deals buildings Those and other of also single on that to properties not look are and Service, multi those the Postal are we that acquire have and we by that at tertiary evaluated and underwritten while solely tenant tenants. the So credit secondary tenant terms the occupied lease look tenancy Service.

we look at So those do properties.

comfortable and deals we look that structure focus industrial whether We our quality with, secondary with that is as terms But otherwise, will Postal. are are and on as at. that lease continue credit to comfortable and still the of it's long those the we a are pure believe is as as tenant And long we're those things or our properties. will play mandate look at we

Operator

line comes Instructions] Ed Groshan [Operator Height next the question Capital from Our Markets. with of

Ed Groshan

that to your XXXX first, the you think -- loan term guess is matures Rob, I said end, in So I or correct?

Robert Klein

Correct.

Ed Groshan

So significantly be out where possible, I just of, I fairly higher want or get your indication given what maturity that at just -- was probably $XXX at to XXXX willing would would just to that's think but just extend are, did rates deal is to, you deem is I million And X.X% at --. I paying that you’re reason I rate? a the and to than out relatively AGO low asked it

how opportunities? So those think I about you just wondering was

Andrew Spodek

We're available companies size always rates like to we're different evaluating to you of the some at what not type and of the different the here maturities, like, with may issue may of yet products other a posts, bonds you unsecured or us but cover. are reference point

some do little XXXX our revolving XXXX loan as But bit credit term to debt thought appropriate So term, AIG we're and secured we're just out our ourselves, that then And respectively. to on other yet. some to our looking like very at We longer that was it and financings. at like facility option our a that's debt an at then have financed of have moment other the looking not always we different yes, loan we terms.

Ed Groshan

my to just understand hit X.X to big competitive -- that the you're is I not I newsfeed they maybe terminated whether something that rate. markets don't and from the Liverpool East rate. But on you tap considering. mentioned or you're this Andrew, the know I what group So good how issuer low year one you only out pretty banking in in something the be can't and And the those Speakers] Is lock your I then a mean asset could there. [Multiple that got or XXXX so vacated? closed closure longer

Andrew Spodek

a of little over a month. possession had September, we've end the turned at over so They

Ed Groshan

So your opportunities? you for hold and other marketing you it? plan Do said lease to

Andrew Spodek

too options. all it's local tell. weighing opportunity the early an think need give it of to I see happens what there. We to in to We're our market

Ed Groshan

Office, -- seem, that not to would that because spot want just Post stay just given tenant, they was with the primarily on I US that focused seem single comments, it would strategy? you be your aligned vacated it the would like

Andrew Spodek

the a is it's down see of postal options road percent a of got of But our of back, going that under we're property retenenting more now are. the go this our a Again, what asset. total to revenue. half to we Again,

Ed Groshan

address -- that is properties. is you And property the you on an this bit a you rate industrial seven, get that or Do there a little can above did cap industrial unlikely?

Andrew Spodek

have what the current about especially your cap industry, So seven. But defined know, you of bought constrained entire we not given have properties tenancy would how industrial it's environment, in is. rates throughout the regardless

especially as there that of so buy to we would much And property as to difficult love and is certain are all our urban areas properties classes seven, very types in source. above

Ed Groshan

the they feet? a XXX at bought size, properties that several square seven, XXX,XXX feet, the above you have square And similar were other

Andrew Spodek

cap that Yes, but trade work, there were. properties There that most were lower at buildings industrial typically [Technical Difficulty]. two

Ed Groshan

you're about rates? competition in quarter, seeing touched just we I can in of a to know And cap But there the the compression last now what relative you and cap this competition talk discussion And whole market rates. on during last quarter. and was the

Andrew Spodek

really last about quarter the competition. wasn't The conversation

about I is I the any in flight going. difficult more finding tenants people deals. to estate have general. not having the that this rates with to way a are and time in is great it credit think cap assets There's yield that compression are Postal think things was just specific a real this And

market assets We're the seeing range. in in compressing general. that. And just able rate so to still buy that's still capitalization We're our

the properties, lower opportunities are hopeful we if range. to the will to cap that are larger are the off but rate that X% We year we is pursue But year as attempt them. continues had to there good that -- articulated, which the other are still significant end in range X%

Ed Groshan

like, And it mile there. mile there mistaken, if last about pretty was be XX accurate? properties not to good a seem were it last seems I'm properties in that fairly Is and does out pipeline

Andrew Spodek

pursue we all as is make of as a There underwriting continue sense well they Yes. opportunities as mile as from to an facilities, facilities. pipeline And flex as Postal a good perspective. from well of long perspective those last

Operator

BTIG. question from Michael of the next with comes Gorman line Our

Michael Gorman

follow-up, the adding the going that it through I go kind particular particular infrastructure G&A it Is there I going it. apologize heard platform? across conversation areas forward, are a a I sense be I the to makes platform Rob. acquisitions. I'm to the just or just to G&A, quick about which G&A. if underwriting? on targets higher is Are grows if are the curious the look certainly grow just there for had to you're that acquisition as of areas with of missed

Robert Klein

people, order across we'll going But on a as technology cash invest across increase. annual in infrastructure. expense those should the of scale of of percentage platform. to some to as I mentioned, initiatives, It's the experience and G&A platform basis. kind we’ll continue We're decline support revenue incremental to to continue And an

Operator

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

Andrew Spodek

the behalf entire join forward connecting look call you taking to you team, this hope everyone myself the On coming healthy, all you. Thank for next and I'd evening. staying We like with good that months. is we of today. time to to Have on a safe us and and over the thank

Operator

This for today's today. conference. joining you concludes us Thank

your lines may at disconnect You time. this

Postal Realty Trust (PSTL) 9 Nov 212021 Q3 Earnings call transcript