The following is excerpted from the question-and-answer section of the transcript.
(Questions from industry analysts are provided in full, but answers are omitted - download the transcript to see the full question-and-answer session)
Question: Rob Stevenson - Janney Montgomery Scott, LLC - Analyst
: Andrew, what is needed here to take this from a non-binding LOI to an actual contractual agreement? Is there any dependency here on congress
or for funding approval or anything like that?
Question: Rob Stevenson - Janney Montgomery Scott, LLC - Analyst
: Okay. And I mean, at this point, given your relationship and your conversations with them, is this going to be the road map for '23 and '24, where
you have expirations, you continue to get paid, a new agreement is reached formally in the midyear or the following year? Or is something different
happened with the '22s that won't be repeated in '23 and '24 and forward at this point?
Question: Rob Stevenson - Janney Montgomery Scott, LLC - Analyst
: Okay. And then, Rob, just one question for you. On the debt side, I mean, when you look out today, given what has been happening in the term
loan market and the interest rate hedge costs, et cetera, where -- is the line of credit basically the only good source for you on the debt side? Are
there other avenues that you're looking at that you think are more attractive or better fit the capital structure? How you sort of characterize that
today?
Question: Rob Stevenson - Janney Montgomery Scott, LLC - Analyst
: Where is pricing on the secured side versus your line today?
Question: Eric Borden - BMO Capital Markets - Analyst
: It's Eric on for John. I appreciate the color on the annual rent escalators of 3.5%. I was just kind of curious, going forward, is this hopefully the new
standard? Or is it in the '23 and the '24 and then beyond for the lease expirations?
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MAY 03, 2023 / 12:30PM, PSTL.N - Q1 2023 Postal Realty Trust Inc Earnings Call
Question: Eric Borden - BMO Capital Markets - Analyst
: Okay. That's helpful. And was there any change in duration of the lease or how you guys are thinking about the renewal process there?
Question: Eric Borden - BMO Capital Markets - Analyst
: Okay. I appreciate that. And then last one for me. Was there any additional rent catch-up payments in the first quarter?
Question: Michael Gorman - BTIG, LLC - Analyst
: Andrew, I was just wondering if you could talk for a minute about maybe what other catalysts are out there to help that bid-ask spread compressed.
Obviously, in the other markets, we're seeing more pressure from the leverage side of the equation, but I get the sense that there aren't a ton of
heavily leveraged sellers in your space. So I'm just curious what else could be the catalyst that helps that kind of remaining spread close over the
balance of '23 or maybe as we normalize later this year and into '24.
Question: Michael Gorman - BTIG, LLC - Analyst
: Okay. Great. That's helpful. And then maybe kind of on that same line, I know you're active on the ATM in the quarter. Maybe just an update on the
appetite for OP units as you discussed with some of the sellers, especially if they have a handful of properties versus 1s and 2s?
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MAY 03, 2023 / 12:30PM, PSTL.N - Q1 2023 Postal Realty Trust Inc Earnings Call
Question: Michael Gorman - BTIG, LLC - Analyst
: Okay. Great. And then, Rob, maybe just one last question for you, and I'm sorry if I missed it. But obviously, the Board made the decision on the
dividend, which I understand in this environment. How -- I guess, the question is, especially with the new leases coming in, how long can you hold
the dividend where it is before you get down to the REIT minimums in terms of payouts?
Question: Jon Petersen - Jefferies, LLC - Analyst
: I actually just wanted to follow up on that dividend question. So maybe to kind of ask it another way, if we think about what you guys might do
with it over the next few years, are we holding steady for a while here so you can preserve more cash flow? Or do you expect to grow it in line or
kind of below where earnings growth is? Like how do you think about what drives dividend increases in the future?
Question: Jon Petersen - Jefferies, LLC - Analyst
: Okay. And then I think I missed it, you said it right at the top of the call. What was the cap rate on the acquisitions you did in the first quarter?
Question: Jon Petersen - Jefferies, LLC - Analyst
: 7.6%. All right. Great. Nice job. That's all for me.
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MAY 03, 2023 / 12:30PM, PSTL.N - Q1 2023 Postal Realty Trust Inc Earnings Call
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