Postal Realty Trust’s Earnings Call Highlights Growth

Postal Realty Trust ((PSTL)) has held its Q2 earnings call. Read on for the main highlights of the call.

Postal Realty Trust’s recent earnings call revealed a positive sentiment, with the company showcasing robust achievements in re-leasing efforts, AFFO growth, and strategic acquisitions. Despite some concerns regarding higher CapEx and cash G&A expenses, the overall performance and strategic direction suggest continued growth and stability for the company.

Strong Programmatic Re-leasing Effort

Postal Realty Trust has successfully executed 10-year leases with the Postal Service, covering 31% of its portfolio with annual rent escalations at 55%. This strategic move has enhanced the company’s visibility and allowed it to issue annual AFFO per share guidance, demonstrating confidence in its long-term operational strategy.

AFFO Per Share Growth and Guidance Update

The company’s AFFO per share for the quarter was $0.33, exceeding expectations. Additionally, Postal Realty increased its full-year 2025 AFFO guidance range by $0.04 to $1.24 to $1.26 per share, indicating nearly 8% year-over-year growth. This update reflects the company’s strong performance and strategic initiatives.

Successful Acquisitions and Reduced Leverage

Postal Realty Trust closed on 127 properties year-to-date for over $60 million, achieving a weighted average cap rate of 7.8%. The company’s net debt to annualized adjusted EBITDA improved to 5.1x from 5.2x, highlighting its focus on maintaining a strong balance sheet and reducing leverage.

Increased Same-Store Cash NOI Guidance

The company updated its 2025 same-store cash NOI guidance to a range of 7% to 9%, up from the previous 4% to 6%. This increase reflects Postal Realty’s confidence in its operational efficiencies and ability to drive long-term value creation.

Appointment of New Postmaster General

David Steiner, with a strong logistics background, was appointed as the new Postmaster General. His appointment reinforces Postal Realty Trust’s alignment with the Postal Service and strengthens its strategic positioning.

Higher CapEx and Cash G&A Expenses

Projected CapEx for Q3 is expected to be between $175,000 and $325,000 due to the timing of projects. Additionally, total cash G&A expenses for 2025 are expected to be between $10.5 million and $11.5 million, attributed to one-time costs associated with the CFO transition.

Variable Operating Expenses

The company noted variability in operating expenses, which affected quarterly results. However, Postal Realty emphasized that it is not a quarterly business, and expenses are managed vigilantly to ensure financial stability.

Forward-Looking Guidance

Postal Realty Trust’s forward-looking guidance reflects strong performance and strategic initiatives. The company increased its full-year 2025 AFFO guidance range to $1.24 to $1.26 per share, driven by efficient re-leasing efforts and successful acquisitions. With plans to meet or exceed $90 million in acquisitions for the year and improved net debt to annualized adjusted EBITDA, the company is focused on maintaining a strong balance sheet and enhancing earnings visibility.

In summary, Postal Realty Trust’s earnings call highlighted a positive outlook, with significant achievements in re-leasing, AFFO growth, and strategic acquisitions. Despite some concerns about higher CapEx and cash G&A expenses, the company’s strategic direction and operational efficiencies suggest continued growth and stability, making it an attractive prospect for investors.