Postal Realty Trust (PSTL) 16th Annual Midwest Ideas Conference summary

Business model and market overview

• Owns postal real estate in 49 states, focusing on properties leased to the Postal Service, a market of 23,000 leased facilities worth $12–$15 billion.

• Market is highly fragmented, with 17,000 owners, mostly older individuals with long-held assets.

• Postal leases are stable, with a 99%+ retention rate and 100% rent collection, even during economic downturns.

• Most transactions occur due to estate planning or life events among owners.

• Focuses on last mile and flex properties, with industrial assets as opportunistic buys.

UPREIT structure and acquisition strategy

• Uses an UPREIT structure, allowing property owners to exchange assets for operating partnership units, deferring capital gains tax and aiding estate planning.

• About 5–10% of deals use this currency, driving significant off-market deal flow (75% of acquisitions).

• Portfolio has grown from 270 to over 1,850 properties, acquiring 200–300 properties annually.

• Acquisitions target cap rates at or above 7.5%, with 2023 guidance raised to $90M+ in purchases.

Financial performance and guidance

• Updated earnings guidance to $1.24–$1.26 per share and same-store NOI growth to 7–9%.

• Achieved 8% year-over-year earnings growth, attributed to operational efficiencies and lease mark-to-market.

• 56% of portfolio will have 3% annual escalations, and 32% will have 10-year leases by 2026.

• Shareholders benefit from tax-advantaged distributions, with 30% of dividends as return of capital last year.