Postal Realty at East Coast IDEAS: Strategic Growth and Market Position

On Wednesday, 11 June 2025, Postal Realty Trust Inc (NYSE:PSTL) presented at The 15th Annual East Coast IDEAS Conference, outlining its strategic position as the largest owner of properties leased to the United States Postal Service (USPS). CEO Andrew Spodik highlighted the company’s robust growth and opportunities, while acknowledging challenges like rising interest rates. Postal Realty’s unique market position and innovative strategies were emphasized during the conference.

Key Takeaways

• Postal Realty owns 7% of the USPS-leased property market, with significant growth potential.
• The company maintains a 99% tenant retention rate and has consistently collected 100% of rent.
• A focus on off-market deals results in 75% of acquisitions, with 100-200 properties acquired annually.
• The company targets acquisitions of $80-90 million at cap rates of 7.5% or higher.
• Postal Realty’s debt portfolio is predominantly fixed-rate, averaging under 5%.

Financial Results

• Growth: Since its IPO six years ago, Postal Realty has seen a sevenfold increase in square footage, rental revenue, and property count, growing from 270 to nearly 1,800 properties.
• Acquisitions: The company plans to acquire $80-90 million in properties annually, focusing on cap rates of 7.5% or more.
• Lease Structure: Implementing 3% annual escalations on leases, with 56% of the portfolio affected from 2022-2026, and 30% having ten-year leases.
• Cap Rates: Aims to end 2024 with acquisitions above a 7.5% cap rate, improving from a 6.5% cap rate in 2021.

Operational Updates

• Property Types: Focuses on last mile and flex facilities, with industrial properties acquired opportunistically.
• Retention Rate: Maintains a 99% tenant retention rate over the past decade, with only two vacancies in a portfolio of over 1,750 properties.
• Maintenance: A master contract system with roofing manufacturers has been implemented for portfolio-wide replacements.

Future Outlook

• Growth Strategy: Continues to pursue off-market deals through operating partnership units and established relationships.
• Potential Sale-Leaseback: Anticipates opportunities with USPS for its owned properties, comprising 7,000-8,000 buildings.
• Profit Center Opportunity: Envisions future profit from providing maintenance and upgrades to USPS facilities.

Q&A Highlights

• Motivations for Selling: Sellers are primarily motivated by life events, estate planning, and liquidity needs.
• USPS Lease Terms: Postal Realty has successfully negotiated lease escalations and longer terms, unlike smaller property owners.
• Bidding Strategy: The company closes a high percentage of deals it contracts on, expanding its portfolio by 5-12% annually.

Postal Realty Trust’s strategic insights and comprehensive growth plans were thoroughly discussed at the conference. For a detailed understanding, readers are encouraged to refer to the full transcript provided below.

Full transcript - The 15th Annual East Coast IDEAS Conference:

Jeff Elly, Three Part Advisors, Three Part Advisors: Afternoon everyone. Jeff Elly with Three Part Advisors. Thank you all for joining us. Next presenting company today is Postal Realty. PSTL is the ticker.

Here with us today from the company we have Andrew Spodik, CEO Jeremy Garber, President and Jordan Cooperstein, VP of FP and A and Capital Markets. Always forget that part. Anyway, so Postal Realty is a IR client of ours. So if anyone would like a follow-up meeting or call, please reach out to me directly and we can go ahead and get that scheduled for you. And with that, I’ll just go ahead and turn it over to Andrew.

Andrew Spodik, CEO, Postal Realty: Thank you, Jeff. Thank you for joining us. I see some familiar faces. I see some shareholders and I see some people that we haven’t met before. So I’m gonna apologize for the people that have heard this, but I’m gonna go back to the origin of the story and just to give you some context.

So I can’t take credit for the idea of becoming a postal owner. My father started buying post offices in the early eighties. What he found very early on is what we’ve proven out to be true, which is that the postal service always pays their rent on time, 100% of the rent, 100% of the time. That you can own and operate properties throughout the entire country without the need for any on-site personnel at the facilities because of the preferential lease structure. And most importantly and the most misunderstood fact is that the Post Service very rarely leaves their assets.

We’ve been able to maintain a 99% retention rate over the past ten plus years through pretty much every economic cycle, government shutdowns, through COVID, through every administration, through different postmaster generals. Anyway, so he continued to grow the portfolio. He semi retired in the early 2000s and I took over. Institutionalized the business a bit more by nature than by strategy. Continued to grow the portfolio a little bit more aggressively.

Became the largest owner of assets leased to the postal service. My father passed away in 2016. I was approached by an investment banker to create a public company around our portfolio. Never given it any thought, didn’t really have any investors, didn’t answer to anybody, was very low levered. Spent a bunch of time trying to figure out what the opportunity set was, what the market was, whether the public platform was the right way to go.

Spent about two years researching and I learned a lot. Sometimes when you’re in a business doing the same thing every day, all day, you’re focused on the grind, you’re focused on whatever deals are put in front of you, and you don’t have the context of the overall market. So just to contextualize what we’re talking about, there are 23 to 25,000 leased postal facilities throughout the country. Postal service pays $1,600,000,000 in rent. It’s interesting that that 1,600,000,000.0 is only 1.5% of their expense line item.

70 to 80 is labor, which actually does make sense. And there are about 17,000 owners of those 23,000 to 25,000 facilities. That’s how fragmented the market is. A little more data on what the ownership looks like. Average owner is in their 60s to 80s.

Average owner owns their property forty to fifty years and has little or no depreciable basis. That $1,600,000,000, regardless of what margin you put on it, this has got to be a 12 to 15 plus billion dollar market. We are today the, by far and away, the largest owner. We own 7% of the market. The next 20 largest owners altogether only own about 11%.

So you’ve got 80% of the market that’s up for grabs. What you’ll find in our presentation, and after I give you this little background we’ll open it up to questions, what you’ll find in a lot of our answers, if not all of them, is that our relationship with the Postal Service is different than the majority of other owners. It’s because of how long we’ve been doing this. It’s because of the size and scale, because of our platform, and because of how we operate these properties. And as a result of that, we are able to accomplish things with these buildings that the average owner is not able to do.

And that was part of my thesis in going public. The other part of the thesis was around the operating partnership unit. And now I understand that not many people in this room are familiar with REITs, so I’m I’m gonna give you a little background on what that means. If you create the REIT the way we did, which is with an UPREIT structure, it provides you with a currency. That currency is called an operating partnership unit or an OP unit.

And it gives you a currency that you can exchange for a property and allow the owner of the property to defer their capital gains. So as I said, these people have owned these buildings for forty to fifty years, so they have little or no basis. They have no shelter for their income. They have no shelter for capital gains. So if they’re selling their property for a million dollars, they’re gonna be hit with a 20 to 25% or $202,150,000 dollar capital gains tax hit.

If they contribute their property to the public company and take back these operating partnership units, they defer their capital gains tax. They get a full million dollars of these operating partnership units. They are able to collect a distribution which equals our dividend which today is between 6.57%. They avoid the hassles or headaches of ownership, that is any lease negotiation, any potential vacancy, any capital expense, anything like that. And they’re able to be an owner of postal, which most of these people are very proud owners of postal assets.

And so I believed that this was always also going to be a big driver of the public company, and it has been. We’ve done 10 to 15% of our deal flow with the use of this currency. But more than that, 75% of our deal flow, and we buy about 100 to 200 properties a year, is is off market. And I mean properly off market, not touching a broker, pure purely inbound calls from owners or owners that we’re reaching out to. And a and a lot of that deal flow is because of this currency.

It’s also because of our reputation, it’s also because of how long we’ve been in the space. But that currency is very valuable to owners. And we don’t use it all the time but it’s a very important tool for us. Anyway, so for those two reasons we went public. I seeded the public company with my personal assets.

This was not a monetization for me. I took back all of my equity in these operating partnership units and stock. And we continue to grow the public company. I’ve been public about six years. We’ve grown the company by over seven times square footage, rental revenue, property count, what was $2.70 properties, is now close to 1,800 properties.

And truthfully, this is a slower pace than I would have liked. We got slowed down with COVID and we got slowed down the past two years or so with the rise in interest rates. We’ve articulated this year to buy eighty to ninety million dollars at or above a seven and a half cap, which is accretive out of the gate. But what is interesting is the accretion we’re able to add through our internal growth by marking these leases to market and by renegotiating our leases and able to accomplish a 3% annual escalation in our leases. This is one of the biggest examples that I could provide of a proof of concept in the platform.

The average owner has a five year fixed lease, no escalations. We’ve been able to get 3% or better from 2022 all the way through ’26. And we have, because of this escalation, we’ve also instituted ten year leases on a lot of the new leases that we’re executing. These are again both things that the other owners don’t have. Just as a statistic, when we are finished completing executing our leases through ’26, which are agreed to, 56% of our portfolio will have these escalations.

And about 30 some odd percent will have ten year leases. This is a tremendous opportunity. This probably gives you, you know, 2 plus cents of earnings just in the 3% annual escalations that we’ve already executed to date. Again this is all for the benefit of shareholders and shows that this platform has a tremendous value and will continue to show those values as it goes on. I think that should start us off.

Is there something that you think I missed?

Jeremy Garber, President, Postal Realty: You wanna talk about postal real estate, how we define them. Sure. So

Andrew Spodik, CEO, Postal Realty: from IPO, we’ve been educating the world on what postal real estate looked like. When my father bought them, he didn’t know the postal was even leased their assets. Most people don’t. There are a lot of assets that they lease. We bucketed them into three different types of properties.

Last mile facilities, which are smaller facilities, 2,500 square feet and under, which I would think of as a rural facility. Flex facilities, which are 2,500 to 50,000 square feet. And industrial facilities, which are larger. Our bread and butter is buying the flex and last mile facility. The industrial buildings, even though we do look at them, even though we do buy them, it’s more opportunistic and episodical.

There’s not they’re pretty expensive on a cap rate basis and a per square foot basis, and so we don’t find ourselves to be very competitive or to be tremendously value add. And so therefore we focus on the flex and last mile facilities. As I said before, because of the preferential lease structure, we’re really able to go where the deal takes us. Any geography, any size, any market. Once a deal is presented to us, there’s two main underwriting criteria that we look at.

and foremost is whether we believe the postal service either needs to be in that building or wants to be in that building. We’re able to determine that because of how long we’ve been in this business. We’ve built a proprietary database with many data points that I’ve put together for decades. Once we’ve determined that, we underwrite the real estate as it falls within that market. We’re buying these on average around a $160 a foot.

For those of you that know anything about real estate, recognize how inexpensive that is. If you want to compare that on a value basis on a per square foot to other double or triple net players, whether it’s a Family Tree or Dollar General or anything like it, those are typically trading north of $200 a foot. And if you go up to bank branches or pharmacies, they are in the, you know, 400 to $600 a foot. I would argue that our credit is better. I would argue that our rent collection and retention is better.

You know, the way that my father always looked at these was as a government or real estate backed bonds. That’s still how we look at it today. So what Jeremy’s speaking to is the value of the network itself. And so there are different ways to look at what we’re investing in. There’s the real estate, which I just explained, but there’s the business itself.

Right? Everybody thinks about this in their own way. But if you look at it, it’s almost like a two headed animal. You have the government agency part, there’s a constitutional right of the American people to universal service that the American people desperately care about and will fight for. You have the political impact when a potential post office is talked about foreclosure.

And those political reasons and government reasons are reasons why a lot of these buildings stay open. But there’s the business aspect, right? This is not just about the postal service. We’re investing in critical American infrastructure, critical logistics infrastructure. These are nodes on a logistic chain and the postal service has a virtual monopoly on delivery to the last mile.

They deliver to a 169,000,000 delivery points five, six days a week. Those delivery points are arguably the target market of every online retailer. It could be Amazon. It could be a small seller on Etsy or eBay. Everybody needs to get to the American people as fast as possible and that is usually quickest and most efficiently used by the postal service.

And every delivery service provider out there leverages this network in one way or another. Amazon is the proof of that. They built their entire warehouse network around the postal service. And the goal was to be able to take their packages from their warehouse and by the way, many of other larger retailers have copied their model and delivered it to the post office before, I don’t says around 6AM. And then the mail carriers need to deliver that last inch.

It just shows the use of the network and the leverage of the network. Not everybody is Amazon, but everybody needs to get and deliver to the American people as quickly as possible. I’ll now open it up to questions, focus on particular areas if anybody would like. So the way the postal service historically and currently looks at this is they go into a market and they choose a property, a piece of land, not a building. And they choose it for various reasons.

Usually, it’s because of that property’s access to local roads and highways and and ease of ingress and egress. And then they build a building to their to their specifications. And they do it interestingly enough. They don’t want to go to a large developer. Right?

It would be very logical to me that when they rolled out this network in the sixties and seventies to go to Toll Brothers of the like and say, can you build me 10,000 buildings? And they didn’t do that. They went to the local towns and counties and offered local people the ability to buy based on an RFP to build their local post office. And they still they still do that today. We’ve helped local towns and cities with their, let’s call it postal issues.

We bought properties from local municipalities. And and we’ve engaged in versions of that, but we don’t typically build from the ground up. We bought buildings that needed to be built, but the contracts were already in place. It’s it’s a little complicated just because you you would have to go into the town. You would have to basically tie up and contract a bunch of properties you think they’d be interested in and then go to the postal service.

If not, they’re going to the owner of that parcel. So it’s it’s it’s it’s a little it’s it’s a little nuanced.

Jeremy Garber, President, Postal Realty: Of the older buildings need upgrades of some sort? So

Andrew Spodik, CEO, Postal Realty: I would argue that most of them need upgrades. Postal service is not very good at maintaining their buildings and investing in their buildings. The good news is this is not an expense of the owner. I believe that as time goes on and as the portfolio grows, that is one of the areas of potential profit centers for the company. The buildings that we buy in general are not a major focus of the postal service.

From a maintenance standpoint, they’re focused on their larger processing facilities. At some point, I believe that there will be a value in leaning on us and saying, listen, you guys own 5,000 buildings. I’d like to paint them all. I’d like to put lighting in all of them. I’d like to do roofing.

And that that would be another version of a profit center for us because we could execute on that. And and it would be very, very interesting. Today we’ve done that, but it’s not very common. Yes? So it’s a great question.

The main reason for selling is typically either life events, estate planning, or liquidity needs. It’s not a very heavily financed space. It’s not driven by that. It’s typically driven by the family. And a lot of these owners are relatively unsophisticated people, especially the smaller ones.

They were, you know, local contractors or local landowners in a town. They ended up either building the building or owning the building or buying it from the original builder. They assumed that they would pass this building on to their kids. Their kids no longer live close to this town. The kids want cash.

They don’t want a building. Def definitely not a post office. You know, it’s not sexy but it pays the rent. That’s usually what happens. And what you find is, and this is what I was getting to in my original thesis, is the larger owners, the people that build twenty, thirty, 40 buildings in a surrounding town and county, were typically the larger construction companies, were typically a couple of brothers or partners.

Those people are in their eighties. The children and grandchildren have these buildings. They’re all partners. They have different views of what’s supposed to happen. And the currency, the operating partnership unit, gives you a lot of flexibility because not everybody has to make the same decision.

And it’s a way to disband a partnership or an ownership group in a very nice, elegant way that’s very easily estate planned. And so the larger owners that my father and I have tried to buy their portfolios for decades that wouldn’t talk to us about price or cap rate are very interested because it is currency and have taken them on on a number of transactions over the years. Thank you. Yes? So we go where the deal takes us.

What you’ll find if you look at a map is that we our concentration is predominantly East Of The Mississippi. And there’s a big reason for that. Because when the Postal Service rolled out this network, started on the East Coast and went to the West Coast, and when they hit the Mississippi they started building and owning for their own account. And I should reference that, you know, the Postal Service owns seven or 8,000 buildings. They don’t lease those buildings, they own them.

And as this company grows and as the Postal Service looks at its own balance sheet and its own books, there’s I believe a possibility at some point that I don’t control but I believe will come, where they may want to do a sale leaseback on those properties. And I believe building this platform and doing what we’re doing and being the partner that we are puts us in a pole position if that opportunity does present itself. Correct. So the pulse service is not providing longer leases or escalations to other owners. And so they’ve asked for them, but they’ve not gotten them.

Most smaller owners are I’m gonna use the word intimidated even though I don’t believe that it’s intentionally intimidated. They typically sign and accept whatever leases are presented to them, which is part of the opportunity that we have because we know where there’s upside in rent and we’re able to negotiate them in a way that, you know, most other owners that don’t have the confidence and certainty of execution that we have aren’t able to do. So the postal service could say no to me. Yeah yeah, it’s all good. It’s all good.

You’re thinking about the IRS for some reason. The postal service has said no to me on many occasions. And I’m sure they’ll say no to me on many more occasions. I believe that with any negotiation, with any relationship, if you’re reasonable in what you’re asking for and you can present a business case of why it’s not just reasonable but it’s commercially reasonable, it’s very difficult for the other party to say, to not consider it. They can still say no.

And so in years past the poll service has said no. I’ve asked for escalations in years past. I took the opportunity of the hyperinflationary environment that we were in in ’22 to hold my line in a way that I never held it before. And I made a business case to them that was very hard to refute, right? I mean we were owning a lot of properties, the costs of everything are going up, and I don’t have any, you know, I don’t have any increases in my rents and you still want me to maintain these buildings and to replace a roof or do whatever I need to do or pay employees or whatever costs that we all dealt with, the lease needs to reflect it.

And so and I very clearly told them that because you haven’t done this for fifty years is not a good enough reason for me to consider not needing it in my lease.

Jeremy Garber, President, Postal Realty: Sure. So

Andrew Spodik, CEO, Postal Realty: let let me explain that. That’s a good question. That’s something that I I should have spoken to. So these are not triple net leases. These are how we refer to them as a modified double net lease.

And so how I how I describe them is the owner is responsible for insurance. The owner is responsible for roof and structure. On the majority of these buildings roof structure and building systems. So building systems would mean like the plumbing or wires in the wall, like that kind of thing. Our largest single expense is roofs.

And the real estate taxes, would be your largest single expense, is a pass through expense that’s reimbursed by the postal service. So if anybody looks at our financials, you’ll see, you know, the expense and you’ll see the recoup of the money.

Jeremy Garber, President, Postal Realty: We’re not

Andrew Spodik, CEO, Postal Realty: really, it’s not outlets. It’s the wires in the wall, which I don’t know how often wires in the wall, I don’t know how many of you experience it. It’s not usually something that’s a terribly large expense. Correct. We don’t have to do the normal maintenance and carry of the building, the janitorial, landscaping, snow plowing, the utilities, all the operations of the building is not on us.

Majority of the maintenance CapEx is not on us. What’s also interesting to note, again I don’t know how many of you are familiar with real estate, but I’ve described this as a continued occupancy. And so what that means is if the lease ends today, the next lease starts tomorrow, we don’t do any tenant improvements, We don’t do any build outs. We don’t give any free rent. We don’t pay leasing commissions.

And so what other real estate companies have is they have a like a a gross effective rent and a net effective rent. Our gross and net are the same, and that’s a big deal. There’s no leakage in your income.

Jeremy Garber, President, Postal Realty: When do you replace the roof and who determines when that roof gets replaced?

Andrew Spodik, CEO, Postal Realty: So we determine it. What we do is, one of the things that I did when I took over the management of the company. I don’t know if, my father was pretty anal. I don’t know about anal, but what I did was and what my father did and what most other postal owners do, which is logical, is if your roof has a problem, you call a local roofer. And what most postal owners get as a result of that is a local guy in a pickup truck and a bucket of tar and that’s the result that they get.

I’ve always looked at this as a portfolio, not as an individual assets. And so what I did was I called manufacturers and I said, listen, I’ve got 500 buildings. Now we’ve got seventeen fifty buildings. And I was like, these are the amount of roofs I have. I’d like to work out what I referred to as a master contract on a price per square foot basis.

And now what I do is, instead of calling a local roofer, I call Duralast or Firestone or GAF or whatever you want to call. They then send out a roofer for me. So what, I know a bit about roofing just by doing this, but what you’ll find is that manufacturers actually rate their roofers. And there are, you know, preferred roofers based on the scoring that they get when they install. They send out their top tier roofers.

They give us a price on the roof. I get a manufacturer’s warranty on the roof. The manufacturer inspects the roof, makes sure there aren’t any mistakes. And then I have a roof for twenty to thirty years. And we systematically roll out a replacement program over the course of our portfolio depending on the age, useful life, etcetera.

Jeremy Garber, President, Postal Realty: So you don’t just wait until you get lots of repairs?

Andrew Spodik, CEO, Postal Realty: So it depends, actually. So sometimes we will. So an example where we’re not getting where there’s like, let’s call it a lease rolling in three or four years. Even if the roof arguably needs to be replaced, I may wait till the lease rolls. But most of the time, it’s more systematic.

Correct. Correct. Right. So I should speak to that also, which is in six years, started with two seventy one properties. We’re now north of seventeen fifty properties.

We’ve had two vacancies. Again, 99% retention rate. The one of the properties we’ve sold made a marginal profit on it even though it was vacant. We don’t deal with vacancies very often but we often get the question what happens to these buildings when they do go vacant? These buildings are very, as I was saying, well located.

They have very good land to building ratios because of the amount of parking they require. We’ve seen them be bank branches or pharmacies, law offices, doctor’s offices, hardware stores. They’re very easily converted buildings. Luckily we don’t have to deal with it very often. So the honest answer is I don’t know.

The answer that I’m always told is that there’s another buyer, no matter whether there is or not. So I I you you you never know the truth, You know, no no matter what transaction you’re looking at, I’m sure that everybody’s dealt with this in their life, whether it’s a homeowner or or something. There’s someone else bidding against you but they like you better for some particular reason. We get that all the time. So it’s it’s it’s hard to know the answer.

Jeremy Garber, President, Postal Realty: Percentage of the stock did you buy from?

Andrew Spodik, CEO, Postal Realty: So the nuance to that question is in the bidding. So we close a very high percentage of the deal we get into contract on, and deals that we start bidding on we don’t always continue till the end. And so that’s why the answer is not such a simple one. While we’re bidding on a property, we will in in in competitive cases where I think I’m really bidding against somebody, I will strategically start diligence during the bidding process to see how much I really want the building. And so I don’t always complete the bidding process.

And when it is a very competitively bid deal, I don’t usually bid.

Jeremy Garber, President, Postal Realty: Sorry. It’s not a specific answer. What percent do you start and pitch?

Andrew Spodik, CEO, Postal Realty: Oh, vast majority. Eighty eighty plus percent. Right. And and the number will skew based on dollars. And I and and I’m gonna say that because you’re you’re asking a specific question, and I I I wanna be clear.

On industrial assets, I may start a bidding process knowing there’s a good likelihood I’m not gonna finish it, but wanna stay in the mix. You you know what I’m saying? And so the the numbers will skew drastically if I’m trying to at least keep my finger on the pulse of an industrial property that I know once my bidding is, like, I’m not chances are I’m not gonna buy it.

Jeremy Garber, President, Postal Realty: And how many will you buy a year on average?

Andrew Spodik, CEO, Postal Realty: We buy two to 300 buildings a year.

Jeremy Garber, President, Postal Realty: So you’re expanding the portfolio to five to 12% a year.

Andrew Spodik, CEO, Postal Realty: So the past two years is 200. The year before that was 300. Right? So depends how you how you look at it. But but the numbers are not are not drastically off.

Jeremy Garber, President, Postal Realty: What

Andrew Spodik, CEO, Postal Realty: do you mean? Oh sorry. Got it, got it. So what you’ll find is, and interesting, I was just talking to John about this earlier today. In ’22, first first half of twenty two before interest rates really started moving, we did about $80,000,000 just in the half of the year.

I canceled more deals midway through that year than I’ve ever canceled in my life, which was the smart move. If you look at the first half of twenty two and twenty one as an example, what you’ll find is there were a higher percentage of larger portfolios and larger deals. Once interest rates started to move, I focused more on the smaller portfolios and single buildings because I was able to move cap rates more. I had more control over moving. Right?

So so cap rates for ’21 ended the year, these guys can correct me, six and a half cap. And this year, I’m hoping to end north of a seven and a half cap, and I did the same thing last year. So you wanted to move your cap rates up by, let’s call it, a 100 basis points. The larger players, larger portfolios, they didn’t care. And so I I I I couldn’t get them to the table in that way, and so I focused on doing more transactions, smaller portfolios, less deals.

So today, I’m still in that frame. What you found today is post election, conversations have picked up. People still haven’t really moved their cap rates a lot, but those larger portfolio owners are considering it more. Seven and a half cap is what oh, dollars? Half a million dollars.

Half a million is I think our average. 3%. Annual increase. I’m sorry. What’s 3%.

Jeremy Garber, President, Postal Realty: Oh, so it is three

Andrew Spodik, CEO, Postal Realty: It’s 3%. We got in ’22, I was able to get three and a half percent, but everything since then is three. Yeah. We don’t speak to it. Everybody asks a question of that.

We don’t disclose it. Yes? The answer is yes, but it’s nuanced. So I have a sweet spot in that I want a balance, right?

But the reality is the sweet spot is in that area. So if you think about postal properties in general. Right? Say there are there are 10 post offices within 10 miles. Just right?

There are specific post offices that I wanna own within those 10 miles, but it’s not I wanna own a thousand square foot building in this area of Oklahoma. You follow what I’m saying? It’s it’s it’s it’s in the context of that market. It’s not in the context of the portfolio. If you look at our portfolio, you’ll see our ownership percentage in, let’s say, Flex or Last Mile is also similar percentage wise to the postal services portfolio within that same area.

So typically there are stats about that building. And now I’m talking postal, not real estate. Right? So so I could very easily think that it’s a great postal spec building that they wanna be in, but the price could be three times what the market is, and I’m not buying it. But from a postal spec building, you know, it could be carriers, routes, PO boxes, revenue, employees, like, you know, in addition to demographics and just general things that people look at in real estate.

If you owned pharmacies or banks, right, you would know what those metrics are for those type of of tenancies and which buildings, you know, an average deposit above $5,000,000, an average about you you would know what the metrics are. It’s the same thing with a proposal. Yes? So what we find is average WALT on a transaction that we’re buying is two to three years. People don’t typically sell right after they execute a lease, and they don’t typically sell on the last year of the lease.

From our perspective, if we could choose what we, you know, when they would sell to us, I would want it the day before the lease expires So I can negotiate it myself. So what we’ve articulated to the world is north of a 7 and a half cap. What we do is we balance our debt and our equity. And so we do a mix of the two depending on what’s going on in the world, depending on where our leverage rates are, depending on where our stock is, and we use various tools to be able to do So we have a corporate level unsecured credit facility, which is how we pay for most things. And we draw down on that credit facility and depending on where our leverage is, sometimes we’ll use an ATM and issue shares at the market program, which is fairly common.

Sometimes we’ll use the operating partnership unit, which is also fairly common. We also, once we get to a certain place on our credit facility, then term that amount out and lock in the rate. What you’ll see today is 90 something percent of our portfolio is fixed rate debt. I think our average debt is under 5%. New debt that we’re taking on our credit facility is somewhere between five point five percent and six percent.

So that’s typically how it works. I should also tell you that, again, as a proof of concept, we’ve sold two assets in the past six months. It was reverse inquiry. They called us to buy it. We bought those assets.

Let’s call it north of an eight cap, sold it at south of a five cap. The the fundamentals of this business are very, simple and very, very strong. And so it’s unique. It’s not terribly sexy, but it works. Thank you.

Anything else? Thank you.

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