Postal Realty Trust Inc Q1 2025 Earnings Call Transcript

The following is excerpted from the question-and-answer section of the transcript.

Question: Jonathan Petersen - Jefferies - Analyst : Good morning, guys. Congrats on all the lease renewals and being done for 2025. Can you give us -- I apologize if I missed this, but can you give us the GAAP and cash leasing spreads on the '25 lease renewals? And then in the press release, you said you've already agreed to rents for '26. So can you give us some indication of what the leasing spreads will be into next year?

Question: Jonathan Petersen - Jefferies - Analyst : Okay. All right. That's fine. You mentioned in your productive conversations in Washington, D.C. around DOGE and kind of support for the USPS. Maybe can you talk a little bit more about that? I mean, are there any specific things that you're worried about? Or maybe on the flip side, are there some opportunities that would come from more focus on the budget and maybe improving efficiencies at the post office?

Question: Jonathan Petersen - Jefferies - Analyst : Okay, great. All right, that's all for me. Thank you. REFINITIV STREETEVENTS | www.refinitiv.com | Contact Us consent of Refinitiv. 'Refinitiv' and the Refinitiv logo are registered trademarks of Refinitiv and its affiliated companies. MAY 01, 2025 / 1:00PM, PSTL.N - Q1 2025 Postal Realty Trust Inc Earnings Call

Question: Steve Dumanski - Janney Montgomery Scott - Analyst : Good morning, gentlemen. Approximately 32% of the portfolio is currently subjected to 3% annual rent escalators. So firstly, congratulations on your diligent efforts in executing these leases, incorporating the increases. Just want to see, do you have a potential figure of what is attainable for the overall portfolio to have these annual increases by year-end in terms of a targeted percentage?

Question: Steve Dumanski - Janney Montgomery Scott - Analyst : Thank you for correcting me. I appreciate it.

Question: Steve Dumanski - Janney Montgomery Scott - Analyst : Yes, that's all for me.

Question: Barry Oxford - Colliers Securities - Analyst : Thanks guys. Real quick, could you talk about the cap rates that you're seeing in the marketplace right now? Has there been any real changes? Or are they kind of holding pretty steady from what you were seeing at the beginning of the year?

Question: Barry Oxford - Colliers Securities - Analyst : And Andrew, I know you said this many times, but external factors in the economy generally don't affect the acquisition volume because people are selling for different reasons. Is it fair to say that, that still remains true in regards to tariffs that, look, the people who are going to be selling just aren't making decisions based on that.

Question: Barry Oxford - Colliers Securities - Analyst : Right. Andrew, you mentioned the underwriting. And if we were -- if -- [IF] were to get into an environment where the government might be reducing their real estate footprint, again, [IF] Are you underwriting right now in regards to taking extra care for lack of a better word, to make sure that the properties that you're going after and acquiring are, for lack of better word, mission-critical?

Question: Barry Oxford - Colliers Securities - Analyst : Great. Thanks for the call guys.

Question: Barry Oxford - Colliers Securities - Analyst : Yeah.

Question: Jonathan Petersen - Jefferies - Analyst : Great, thanks. Hello again. Just one follow-up on acquisitions. You mentioned one of the acquisitions in 1Q, you used OP units, and it was from a buyer that you've used OP -- or seller you've used OP units for previously. Can you remind us in 2024, like what percent of acquisitions were funded with OP units? And I know it's probably an impossible thing to give guidance on, but maybe just some guideposts on how to think about how often you might use OP units on future acquisitions?

Question: Jonathan Petersen - Jefferies - Analyst : Okay. Super helpful. Alright. Thank you, that's all.