On June 13, 2021, the Nareit Magazine published an article, “Postal Realty Trust Institutionalizes a Niche Market”, featuring Andrew Spodek, Chief Executive Officer of Postal Realty Trust, Inc. Below is a glimpse of the featured article:
A valuable last-mile logistics network, stable occupancy, and consistent rent growth are among the key factors that make the U.S. Postal Service (USPS) a highly desirable tenant for Postal Realty Trust, Inc. (NYSE: PSTL), the nation’s largest owner and manager of properties leased to the USPS. At the same time, Postal Realty CEO Andrew Spodek has not shied away from recognizing the operational challenges faced by the USPS today.
“I think the current uncertainty about the USPS needs to be acknowledged, and we have done that,” Spodek says, referring to the impact of the pandemic and policy changes in 2020 that led to serious backlogs in mail delivery. However, Spodek says the long-term outlook for its primary tenant remains favorable. “The postal service is a government agency that pays its rent on time, rarely moves, and doesn’t require the landlord to have on-site property management.”
Postal Realty has leased space to the USPS since the early 1980s. “Our properties are currently 100% occupied and have averaged a 98% retention rate for the past 10 years. Despite the headlines and confusion, the USPS is a creditworthy tenant whose total gross lease payments accounted for less than 2% of its expenses in 2020,” Spodek says. Since its IPO in May 2019, Postal Realty has more than doubled property count, tripled annualized rental revenue, and nearly quadrupled owned square footage.
And while COVID-19 led to the loss of almost an entire quarter of acquisitions, the specialty REIT managed to exceed its $100 million acquisition guidance for 2020 by purchasing 261 postal properties for over $130 million, within its targeted weighted 7%-9% average cap rate range.