Postal Realty Trust Inc Q3 2021 Earnings Call Transcript

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

Question: Jon Petersen - Jefferies, LLC - Analyst : So in the fourth quarter, looking at your supplemental, you had an industrial acquisition. I think maybe I didn't quite catch this. But, Andrew, I think you said that was a property you guys bought in Milwaukee. If you can give us maybe some more details on what the cap rate is there. And then I think as we close out the year, it looks like maybe about a third of your acquisitions across two properties in terms of dollar value will be from industrial. I guess as we look into 2022, I mean, how do you think that ratio will change going forward?

Question: Jon Petersen - Jefferies, LLC - Analyst : And then in the press release, you guys talked about having 59 leases that have expired or are scheduled to expire. I guess, is there anything to think about there in terms of leases that might be in holdover in terms of negotiations there or maybe some sticking points on renewals? REFINITIV STREETEVENTS | www.refinitiv.com | Contact Us consent of Refinitiv. 'Refinitiv' and the Refinitiv logo are registered trademarks of Refinitiv and its affiliated companies. NOVEMBER 08, 2021 / 10:00PM, PSTL.N - Q3 2021 Postal Realty Trust Inc Earnings Call

Question: John Kim - BMO Capital Markets - Analyst : Just wanted to ask about if you could elaborate on the renewal rates that you signed versus expiring, both during the quarter and what you've agreed to for the remainder of the year?

Question: John Kim - BMO Capital Markets - Analyst : I think there was a reference that some of your leases were below market, so I just wanted to see if that was actually brought to higher rates on renewal?

Question: John Kim - BMO Capital Markets - Analyst : With your cost of debt declining and your WACC overall getting more attractive, are you more inclined to do larger industrial acquisitions like you've announced for the fourth quarter?

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

Question: Ed Groshans - Height Capital Markets - Analyst : So I guess first, Rob, to your end, I think you said the term loan matures in 2027 or -- is that correct?

Question: Ed Groshans - Height Capital Markets - Analyst : So I was just -- just given where rates are, I just want to get your indication of, would you be willing to, or is it possible to extend that maturity out fairly significantly at probably higher than you're paying now but at what I would deem a relatively low rate? And the reason I asked that is AGO just did $400 million deal to 2051 at 3.6% and I think that's -- so I was just wondering how you think about those opportunities.

Question: Ed Groshans - Height Capital Markets - Analyst : I mean I just got that hit my newsfeed, and it was just 3.6% out to 2051 is a pretty good rate. And then I understand that you're not a big issuer and so you can't tap the markets maybe from maybe something you're considering. But I don't know with your banking group how competitive they could be on something longer to lock in the low rate. Andrew, you mentioned the East Liverpool asset and the closure there. Is that the only one that closed this year or whether (multiple speakers) terminated or vacated? REFINITIV STREETEVENTS | www.refinitiv.com | Contact Us consent of Refinitiv. 'Refinitiv' and the Refinitiv logo are registered trademarks of Refinitiv and its affiliated companies. NOVEMBER 08, 2021 / 10:00PM, PSTL.N - Q3 2021 Postal Realty Trust Inc Earnings Call

Question: Ed Groshans - Height Capital Markets - Analyst : So you said you're marketing for lease and other opportunities. Do you plan to hold it?

Question: Ed Groshans - Height Capital Markets - Analyst : It would seem -- because it would just seem like your comments, you want to stay focused on US Post Office, primarily single tenant. Given that they vacated the spot, that that would not be aligned with the strategy?

Question: Ed Groshans - Height Capital Markets - Analyst : And you did address this a little bit on the industrial properties. Do you -- is there an industrial property that can get you a cap rate above seven, or is that unlikely?

Question: Ed Groshans - Height Capital Markets - Analyst : And the 575 square feet (sic - "575,000"), the other properties that you bought at above seven, were they of similar size, several hundred thousand square feet?

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

Question: Ed Groshans - Height Capital Markets - Analyst : And it seems like, if I'm not mistaken, there was about 50 properties were last mile, and there does seem to be a pretty good pipeline in last mile properties out there. Is that fairly accurate?

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