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What changed in Postal Realty Trust, Inc.'s 10-K — 2023 vs 2024

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Paragraph-level year-over-year comparison of Postal Realty Trust, Inc.'s 2023 and 2024 10-K annual filings, covering the Business, Risk Factors, Legal Proceedings, Cybersecurity, MD&A and Market Risk sections. Every new, removed and edited paragraph is highlighted side-by-side so you can see exactly what management changed in the 2024 report.

+204 added−189 removedSource: 10-K (2025-02-27) vs 10-K (2024-02-29)

Top changes in Postal Realty Trust, Inc.'s 2024 10-K

204 paragraphs added · 189 removed · 165 edited across 8 sections

Item 1. Business

Business — how the company describes what it does

8 edited+1 added−1 removed38 unchanged
Biggest changeWe may also sell assets from time to time to recycle capital. 2023 Highlights • We collected 100% of our contractual rents and our owned portfolio was 99.7% occupied as of December 31, 2023. • We acquired 223 properties leased primarily to the USPS totaling approximately 532,000 net leasable interior square feet, for approximately $78 million, excluding closing costs, during 2023. • We amended our existing Credit Facilities (as defined below) in July 2023 to, among other things, add a daily simple Secured Overnight Financing Rate ("SOFR") based option to the term SOFR-based floating interest rate option as a benchmark rate for borrowings under the Credit Facilities and further exercised $35.0 million of accordion under the term loans.
Biggest changeWe may also sell assets from time to time to recycle capital. 2024 Highlights • Our owned portfolio was 99.6% occupied as of December 31, 2024. • We acquired 197 properties leased primarily to the USPS totaling approximately 560,895 net leasable interior square feet, for approximately $90.8 million, excluding closing costs, during 2024. • We sold two real estate properties for net proceeds of $6.0 million and recorded a net gain of $2.4 million. • We amended our existing Credit Facilities (as defined below) in October 2024 to among other things, replace the Bank of Montreal with Truist Bank as the administrative agent, letter of credit issuer and swingline lender.
The obligation to make readily achievable accommodations is an ongoing one, and we will continue to assess our properties and to make alterations as appropriate in this respect. Human Capital Resource Management As of December 31, 2023, we employed 46 full-time employees. Our employees are primarily located at our corporate office in Cedarhurst, New York.
The obligation to make readily achievable accommodations is an ongoing one, and we will continue to assess our properties and to make alterations as appropriate in this respect. Human Capital Resource Management As of December 31, 2024, we employed 45 full-time employees. Our employees are primarily located at our corporate office in Cedarhurst, New York.
We are the sole general partner of our Operating Partnership through which our properties are directly or indirectly owned. As of December 31, 2023, we owned approximately 80.7% of the outstanding common units of limited partnership interest in our Operating Partnership (the “OP Units”), including long term incentive units of our Operating Partnership (the “LTIP Units”).
We are the sole general partner of our Operating Partnership through which our properties are directly or indirectly owned. As of December 31, 2024, we owned approximately 79.2% of the outstanding common units of limited partnership interest in our Operating Partnership (the “OP Units”), including long term incentive units of our Operating Partnership (the “LTIP Units”).
As of December 31, 2023, 26% of our employees, 19% of our named executive officers and key employees (defined as all employees with a title of vice president and higher) and 20% of the members of our Board of Directors were female and 35% of our employees identified as a member of an ethnic and/or racial minority group.
As of December 31, 2024, 27% of our employees, 21% of our named executive officers and key employees (defined as all employees with a title of vice president and higher) and 20% of the members of our Board of Directors were female and 29% of our employees identified as a member of an ethnic and/or racial minority group.
The properties are located in 49 states and one territory, totaling approximately 5.9 million net leasable interior square feet in the aggregate and were 99.7% occupied as of December 31, 2023 with a weighted average remaining lease term of approximately three years.
The properties are located in 49 states and one territory, totaling approximately 6.4 million net leasable interior square feet in the aggregate and were 99.6% occupied as of December 31, 2024 with a weighted average remaining lease term of approximately four years.
Our Board of Directors oversees our business and affairs. Real Estate Investments As of December 31, 2023, we had net investments of approximately $528.8 million in 1,509 real estate properties (including two properties accounted for as financing leases).
Our Board of Directors oversees our business and affairs. Real Estate Investments As of December 31, 2024, we had net investments of approximately $606.0 million in 1,703 real estate properties (including two properties accounted for as financing leases).
As of December 31, 2023, we manage, through our taxable REIT subsidiary ("TRS"), an additional 397 properties owned by our chief executive officer, Andrew Spodek, and his affiliates. We have a right of first offer to purchase 250 of our 397 managed properties.
As of December 31, 2024, we manage, through our taxable REIT subsidiary ("TRS"), an additional 360 properties owned by our chief executive officer, Andrew Spodek, and his affiliates.
In August 2023, we also amended the ATM Program to increase the aggregate offering amount under the program from up to $50.0 million to up to $150.0 million. 1 Table of Contents Dividends • We have increased our quarterly dividend from $0.2375 for the fourth quarter 2022 dividend to $0.24 for the fourth quarter 2023 dividend.
In addition, we increased the 2022 Term Loan commitments in an aggregate principal amount of up to $50.0 million, which we fully exercised. • We issued 1,420,791 shares of Class A common stock under our at-the-market equity offering program (the "ATM Program") during 2024, raising approximately $20.4 million in gross proceeds. 1 Table of Contents Dividends • We have increased our quarterly dividend from $0.2375 for the fourth quarter 2023 dividend to $0.2425 for the fourth quarter 2024 dividend.
Removed
We also entered into two interest rate swaps in 2023 with a total notional amount of $35.0 million to manage our interest rate risks under the Credit Facilities. • We issued 1,861,407 shares of Class A common stock under our at-the-market equity offering program (the "ATM Program") during 2023, raising approximately $27.8 million in gross proceeds.
Added
During the year ended December 31, 2024, we acquired from our chief executive officer, Andrew Spodek, and his affiliates a portfolio of 36 properties currently leased to the USPS for approximately $12.5 million in cash, excluding closing costs. We have a remaining right of first offer to purchase 214 of our 360 managed properties.

Item 1A. Risk Factors

Risk Factors — what could go wrong, per management

86 edited+17 added−10 removed380 unchanged
Biggest changeRisks Related to Our Business and Operations • We may be unable to acquire and/or manage additional USPS-leased properties at competitive prices or at all. • Our acquisitions may not achieve the returns we expect. • Concentration of our postal properties in certain regions. • We may be unable to renew leases or sell vacated properties on favorable terms, or at all, as leases expire. • We may incur significant maintenance, repair and capital expenses under our leases. • Property vacancies could result in significant capital expenditures and illiquidity. • As of February 29, 2024, the leases at 91 of our properties were expired. • Our use of OP Units as consideration to acquire properties. • Commercial real estate investments may be illiquid. • An increase in the amount of USPS or U.S. government-owned real estate may adversely affect us. • Our real estate taxes for properties where we are not reimbursed could increase. • We may be exposed to risks associated with property development and redevelopment. • Increases in interest rates or unavailability of debt financing. • Mortgage debt obligations expose us to the possibility of foreclosure. • Failure to comply with covenants in our debt instruments could adversely affect our financial condition. • Failure to hedge effectively against interest rate changes may have a material adverse effect on our business. • Our success depends on key personnel whose continued service is not guaranteed. • Risks associated with on-going or future litigation. • Insurance on our properties may not adequately cover all losses. • Risks associated with potential joint venture investments. • Competition for skilled personnel could increase our labor costs. • Our growth depends on external sources of capital. • We could incur significant costs and liabilities related to environmental matters. • Our properties may contain or develop harmful mold or suffer from other air quality issues. • We are subject to risks from natural disasters and risks associated with climate change. • Our properties may be subject to impairment charges or reduction in value. • Our title insurance policies may not cover all title defects. • Significant costs for complying with various federal, state and local laws, regulations and covenants. • We may not be able to adapt to potential new business models. • We have acquired properties that are subject to purchase options in favor of the USPS. • We may incur goodwill and other intangible asset impairment charges. • We may have difficulty implementing changes to our information technology systems. • Use of social media may adversely impact our reputation and business. • Our ability to pay dividends in the future.
Biggest changeRisks Related to Our Business and Operations • We may be unable to acquire and/or manage additional USPS-leased properties at competitive prices or at all. • Our acquisitions may not achieve the returns we expect. • Concentration of our postal properties in certain regions. • We may be unable to renew leases or sell vacated properties on favorable terms, or at all, as leases expire. • We may incur significant maintenance, repair and capital expenses under our leases. • Property vacancies could result in significant capital expenditures and illiquidity. • As of February 26, 2025, the leases at seven of our properties were expired. • Our use of OP Units as consideration to acquire properties. • Commercial real estate investments may be illiquid. • An increase in the amount of USPS or U.S. government-owned real estate may adversely affect us. • Our real estate taxes for properties where we are not reimbursed could increase. • We may be exposed to risks associated with property development and redevelopment. • Increases in interest rates or unavailability of debt financing. • Mortgage debt obligations expose us to the possibility of foreclosure. • Covenants in our debt instruments could adversely affect our financial condition. • Failure to hedge effectively against interest rate changes may have a material adverse effect on our business. • Our success depends on key personnel whose continued service is not guaranteed. • Risks associated with on-going or future litigation. • Insurance on our properties may not adequately cover all losses. • Risks associated with potential joint venture investments. • Competition for skilled personnel could increase our labor costs. • Our growth depends on external sources of capital. • We could incur significant costs and liabilities related to environmental matters. • Our properties may contain or develop harmful mold or suffer from other air quality issues. • We are subject to risks from natural disasters and risks associated with climate change. • Our properties may be subject to impairment charges or reduction in value. • Our title insurance policies may not cover all title defects. • We may incur significant costs for complying with various federal, state and local laws, regulations and covenants. • We may not be able to adapt to potential new business models. • The increased use of artificial intelligence and automation activities by our USPS and non-postal tenants may affect our owned properties in currently unforeseen ways. • We have acquired properties that are subject to purchase options in favor of the USPS. • We may incur goodwill and other intangible asset impairment charges. • We may have difficulty implementing changes to our information technology systems and incorporating artificial intelligence into our business. • We may not be as successful as our competitors incorporating artificial intelligence into our business. • Use of social media may adversely impact our reputation and business. • Our ability to pay dividends in the future. 4 Table of Contents Risks Related to Our Organizational Structure • Mr.
However, our acquisitions and our ability to successfully integrate and operate the acquired properties are subject to the following significant risks: • we may acquire properties that are not accretive to our results upon acquisition; • we may not successfully manage and lease newly acquired properties to meet our financial or strategic goals and realize the anticipated benefits; • we may have to spend more than budgeted to make necessary improvements to acquired properties and we may underestimate the repair, maintenance and capital expenses for the acquired properties; • we may not be able to obtain sufficient and economical insurance coverage for the acquired properties; • our cash flows from the acquired properties may be insufficient to meet the required principal and interest payments on the property-level financing, if any; • the integration of acquired properties into our existing portfolio may require significant expenses and time from our management team and may divert attention from other important areas of our business; 9 Table of Contents • changing market and regulatory conditions, particularly those associated with the USPS, may result in higher-than-expected vacancy rates and lower than expected rental rates on newly acquired properties; and • we may acquire properties subject to liabilities and without any recourse, or with only limited recourse, with respect to unknown liabilities such as undisclosed environmental contamination, claims by tenants, vendors or other persons dealing with the former owners of the properties and liabilities incurred in the ordinary course of business.
However, our acquisitions and our ability to successfully integrate and operate the acquired properties are subject to the following significant risks: • we may acquire properties that are not accretive to our results upon acquisition; 9 Table of Contents • we may not successfully manage and lease newly acquired properties to meet our financial or strategic goals and realize the anticipated benefits; • we may have to spend more than budgeted to make necessary improvements to acquired properties and we may underestimate the repair, maintenance and capital expenses for the acquired properties; • we may not be able to obtain sufficient and economical insurance coverage for the acquired properties; • our cash flows from the acquired properties may be insufficient to meet the required principal and interest payments on the property-level financing, if any; • the integration of acquired properties into our existing portfolio may require significant expenses and time from our management team and may divert attention from other important areas of our business; • changing market and regulatory conditions, particularly those associated with the USPS, may result in higher-than-expected vacancy rates and lower than expected rental rates on newly acquired properties; and • we may acquire properties subject to liabilities and without any recourse, or with only limited recourse, with respect to unknown liabilities such as undisclosed environmental contamination, claims by tenants, vendors or other persons dealing with the former owners of the properties and liabilities incurred in the ordinary course of business.
We have acquired and may continue to acquire properties that are (i) leased to both the USPS and non-postal tenants, (ii) leased solely to non-postal tenants or (iii) in markets that are new to us, and we may not be able to adapt to these new business models.
We have acquired and may continue to acquire properties that are (i) leased to both the USPS and non-postal tenants, (ii) leased solely to non-postal tenants or (iii) in markets that are new to us, and we may not be able to adapt to these new business models.
Certain provisions of the Maryland General Corporation Law ("MGCL") may have the effect of inhibiting a third party from making a proposal to acquire us or of impeding a change of control under circumstances that otherwise could provide the holders of shares of our Class A common stock with the opportunity to realize a premium over the then-prevailing market price of such shares, including: • “business combination” provisions that, subject to limitations, prohibit certain business combinations between us and an “interested stockholder” (defined generally as any person who beneficially owns 10% or more of the voting power of our shares or an affiliate thereof or an affiliate or associate of ours who was the beneficial owner, directly or indirectly, of 10% or more of the voting power of our then outstanding voting stock at any time within the two-year period immediately prior to the date in question) for five years after the most recent date on which the stockholder becomes an interested stockholder, and thereafter imposes certain fair price and/or supermajority stockholder voting requirements on these combinations; and • “control share” provisions that provide that holders of “control shares” of our company (defined as shares that, when aggregated with other shares controlled by the stockholder, entitle the stockholder to exercise one of three increasing ranges of voting power in electing directors) acquired in a “control share acquisition” (defined as the direct or indirect acquisition of ownership or control of issued and outstanding “control shares”) have no voting 22 Table of Contents rights with respect to their control shares, except to the extent approved by our stockholders by the affirmative vote of at least two-thirds of all the votes entitled to be cast on the matter, excluding all interested shares.
Certain provisions of the Maryland General Corporation Law ("MGCL") may have the effect of inhibiting a third party from making a proposal to acquire us or of impeding a change of control under circumstances that otherwise could provide the holders of shares of our Class A common stock with the opportunity to realize a premium over the then-prevailing market price of such shares, including: • “business combination” provisions that, subject to limitations, prohibit certain business combinations between us and an “interested stockholder” (defined generally as any person who beneficially owns 10% or more of the voting power of our shares or an affiliate thereof or an affiliate or associate of ours who was the beneficial owner, directly or indirectly, of 10% or more of the voting power of our then outstanding voting stock at any time within the two-year period immediately prior to the date in question) for five years after the most recent date on which the stockholder becomes an interested stockholder, and thereafter imposes certain fair price and/or supermajority stockholder voting requirements on these combinations; and • “control share” provisions that provide that holders of “control shares” of our company (defined as shares that, when aggregated with other shares controlled by the stockholder, entitle the stockholder to exercise one of three increasing ranges of voting power in electing directors) acquired in a “control share acquisition” (defined as the direct or indirect acquisition of ownership or control of issued and outstanding “control shares”) have no voting 23 Table of Contents rights with respect to their control shares, except to the extent approved by our stockholders by the affirmative vote of at least two-thirds of all the votes entitled to be cast on the matter, excluding all interested shares.
Our Operating Partnership will not indemnify or advance funds to any person with respect to any action initiated by the person seeking indemnification without our approval (except for any proceeding brought to enforce such person’s right to indemnification under the partnership agreement) or if the person is found to be liable to our Operating Partnership on any portion of any claim in the action. 21 Table of Contents Our charter contains certain provisions restricting the ownership and transfer of our stock that may delay, defer or prevent a change of control transaction that might involve a premium price for our Class A common stock or that our stockholders otherwise believe to be in their best interests.
Our Operating Partnership will not indemnify or advance funds to any person with respect to any action initiated by the person seeking indemnification without our approval (except for any proceeding brought to enforce such person’s right to indemnification under the partnership agreement) or if the person is found to be liable to our Operating Partnership on any portion of any claim in the action. 22 Table of Contents Our charter contains certain provisions restricting the ownership and transfer of our stock that may delay, defer or prevent a change of control transaction that might involve a premium price for our Class A common stock or that our stockholders otherwise believe to be in their best interests.
These provisions include, among others: • redemption rights; • a requirement that we may not be removed as the general partner of our Operating Partnership without our consent; • transfer restrictions on OP Units; • our ability, as general partner, in some cases, to amend the partnership agreement and to cause the Operating Partnership to issue units with terms that could delay, defer or prevent a merger or other change of control of us or our Operating Partnership without the consent of the limited partners; and 23 Table of Contents • the right of the limited partners to consent to direct or indirect transfers of the general partnership interest, including as a result of a merger or a sale of all or substantially all of our assets, in the event that such transfer requires approval by our common stockholders.
These provisions include, among others: • redemption rights; • a requirement that we may not be removed as the general partner of our Operating Partnership without our consent; • transfer restrictions on OP Units; • our ability, as general partner, in some cases, to amend the partnership agreement and to cause the Operating Partnership to issue units with terms that could delay, defer or prevent a merger or other change of control of us or our Operating Partnership without the consent of the limited partners; and 24 Table of Contents • the right of the limited partners to consent to direct or indirect transfers of the general partnership interest, including as a result of a merger or a sale of all or substantially all of our assets, in the event that such transfer requires approval by our common stockholders.
The market price of our Class A common stock could be subject to wide fluctuations in response to a number of factors, including: • our operating performance and the performance of other similar companies; • the operating performance of the USPS; • actual or anticipated differences in our operating results; • changes in our revenues or earnings estimates or recommendations by securities analysts; • publication of research reports about us or our industry by securities analysts; • additions and departures of key personnel; • strategic decisions by us or our competitors, such as mergers and acquisitions, divestments, spin-offs, joint ventures, strategic investments or changes in business strategy; • the passage of legislation or other regulatory developments or executive policies that adversely affect us or our industry; • speculation in the press or investment community; • actions by institutional stockholders; • changes in accounting principles; • terrorist acts; • general market conditions, including factors unrelated to our performance; and • pandemics and epidemics, such as the COVID-19 pandemic, and the related governmental and economic responses thereto.
The market price of our Class A common stock could be subject to wide fluctuations in response to a number of factors, including: • our operating performance and the performance of other similar companies; • the operating performance of the USPS; • actual or anticipated differences in our operating results; • changes in our revenues or earnings estimates or recommendations by securities analysts; • publication of research reports about us or our industry by securities analysts; • additions and departures of key personnel; 32 Table of Contents • strategic decisions by us or our competitors, such as mergers and acquisitions, divestments, spin-offs, joint ventures, strategic investments or changes in business strategy; • the passage of legislation or other regulatory developments or executive policies that adversely affect us or our industry; • speculation in the press or investment community; • actions by institutional stockholders; • changes in accounting principles; • terrorist acts; • general market conditions, including factors unrelated to our performance; and • pandemics and epidemics, such as the COVID-19 pandemic, and the related governmental and economic responses thereto.
We cannot predict whether future sales of our Class A common stock, preferred stock, or securities convertible into or exchangeable or exercisable for our Class A common stock or the availability of these securities for resale in the open market will decrease the market price of our Class A common stock.
In addition, we cannot predict whether future sales of our Class A common stock, preferred stock, or securities convertible into or exchangeable or exercisable for our Class A common stock or the availability of these securities for resale in the open market will decrease the market price of our Class A common stock.
("UPH"). • A sale of assets acquired as part of the merger between us and UPH within five years after the merger would result in corporate income tax. • The ability of our Board of Directors to revoke our REIT qualification without stockholder approval may cause adverse consequences to our stockholders. • Our transactions with our TRS will cause us to be subject to a 100% penalty tax on certain income or deductions if those transactions are not conducted on arm’s-length terms. • You may be restricted from acquiring or transferring certain amounts of our Class A common stock. • Dividends payable by REITs generally do not qualify for the reduced tax rates on dividend income from regular corporations. • If our Operating Partnership failed to qualify as a partnership for federal income tax purposes, we would cease to qualify as a REIT. • To maintain our REIT status, we may be forced to borrow funds during unfavorable market conditions or on unfavorable terms at desired times. • Covenants in our debt instruments may restrict our ability to pay distributions. • New legislation or administrative or judicial action could adversely affect us or our stockholders.
("UPH"). • A sale of assets acquired as part of the merger between us and UPH within five years after the merger would result in corporate income tax. • The ability of our Board of Directors to revoke our REIT qualification without stockholder approval may cause adverse consequences to our stockholders. • Our transactions with our TRS will cause us to be subject to a 100% penalty tax on certain income or deductions if those transactions are not conducted on arm’s-length terms. • We have restrictions on acquiring or transferring certain amounts of our Class A common stock. • Dividends payable by REITs generally do not qualify for the reduced tax rates on dividend income from regular corporations. • If our Operating Partnership failed to qualify as a partnership for federal income tax purposes, we would cease to qualify as a REIT. • To maintain our REIT status, we may be forced to borrow funds during unfavorable market conditions or on unfavorable terms at desired times. • Covenants in our debt instruments may restrict our ability to pay distributions. • New legislation or administrative or judicial action could adversely affect us or our stockholders.
Any dividends or other distributions that we pay in the future will depend upon our actual results of operations, economic conditions, debt service requirements, capital expenditures and other factors that could differ materially from our current expectations. We may also pay a portion of our dividends in common stock. 20 Table of Contents Risks Related to Our Organizational Structure Mr.
Any dividends or other distributions that we pay in the future will depend upon our actual results of operations, economic conditions, debt service 21 Table of Contents requirements, capital expenditures and other factors that could differ materially from our current expectations. We may also pay a portion of our dividends in common stock. Risks Related to Our Organizational Structure Mr.
There can be no assurance that our efforts to maintain the security and 32 Table of Contents integrity of the information we and our service providers collect and our and their computer systems will be effective or that attempted security breaches or disruptions would not be successful or damaging with the potential for disruption in our operations, material harm to our financial condition, cash flows and the market price of our common shares, increased cybersecurity protection and insurance costs, regulatory enforcement, litigation and damage to our stakeholder relationships.
There can be no assurance that our efforts to maintain the security and integrity of the information we and our service providers collect and our and their computer systems will be effective or that attempted security breaches or disruptions would not be successful or damaging with the potential for disruption in our operations, material harm to our financial condition, cash flows and the market price of our common shares, increased cybersecurity protection and insurance costs, regulatory enforcement, litigation and damage to our stakeholder relationships.
In addition, while hedging agreements would be intended to lessen the impact of rising interest rates on us, they could also expose us to the risk 13 Table of Contents that the other parties to the agreements would not perform, we could incur significant costs associated with the settlement of the agreements or that the underlying transactions could fail to qualify as highly-effective cash flow hedges under Financial Accounting Standards Board ("FASB") Accounting Standards Codification ("ASC"), Topic 815, Derivatives and Hedging.
In addition, while hedging agreements would be intended to lessen the impact of rising interest rates on us, they could also expose us to the risk that the other parties to the agreements would not perform, we could incur significant costs associated with the settlement of the agreements or that the underlying transactions could fail to qualify as highly-effective cash flow hedges under Financial Accounting Standards Board ("FASB") Accounting Standards Codification ("ASC"), Topic 815, Derivatives and Hedging.
Additional risks and uncertainties not presently known to us, or that we currently consider immaterial, also may materially adversely affect our business, financial condition, results of operations, cash flows and prospects. Additional information regarding forward-looking statements is included herein. 5 Table of Contents Risks Related to the USPS Our business is substantially dependent on the demand for leased postal properties.
Additional risks and uncertainties not presently known to us, or that we currently consider immaterial, also may materially adversely affect our business, financial condition, results of operations, cash flows and prospects. Additional information regarding forward-looking statements is included herein. Risks Related to the USPS Our business is substantially dependent on the demand for leased postal properties.
Certain litigation or the resolution of certain litigation 14 Table of Contents may adversely affect our relationship with tenants, vendors and other parties involved in the disputes and impact the availability or cost of some of our insurance coverage, which could materially adversely affect our results of operations and cash flows, expose us to increased risks that would be uninsured and/or adversely impact our ability to attract officers and directors.
Certain litigation or the resolution of certain litigation may adversely affect our relationship with tenants, vendors and other parties involved in the disputes and impact the availability or cost of some of our insurance coverage, which could materially adversely affect our results of operations and cash flows, expose us to increased risks that would be uninsured and/or adversely impact our ability to attract officers and directors.
Periodical advertising has also experienced a decline as a result of move to electronic media. 7 Table of Contents The growth in the USPS’ competitive service volumes, such as Priority Mail, Priority Mail Express, First-Class Package Service, Parcel Select, Parcel Return Service and some types of International Mail, is largely attributable to certain of the USPS’ largest customers, including UPS, FedEx and Amazon.
Periodical advertising has also experienced a decline as a result of move to electronic media. The growth in the USPS’ competitive service volumes, such as Priority Mail, Priority Mail Express, First-Class Package Service, Parcel Select, Parcel Return Service and some types of International Mail, is largely attributable to certain of the USPS’ largest customers, including UPS, FedEx and Amazon.
In addition, we will be subject to income tax at regular corporate rates to the extent that we distribute less than 100% of our REIT taxable income, including any net capital gains. Because of these distribution requirements, we may not be able to fund future capital needs, including any necessary capital expenditures, from operating cash flow.
In addition, we will be subject to income tax at regular corporate rates to the extent that we 16 Table of Contents distribute less than 100% of our REIT taxable income, including any net capital gains. Because of these distribution requirements, we may not be able to fund future capital needs, including any necessary capital expenditures, from operating cash flow.
Deficiencies in our internal controls over financial reporting that may occur in the future could result in misstatements of our results of operations, restatements of our financial statements or otherwise adversely impact our financial condition, results of operations, cash flows, or the market price of our Class A 30 Table of Contents common stock and our ability to satisfy our debt service obligations and to pay dividends and distributions to the holders of our Class A common stock.
Deficiencies in our internal controls over financial reporting that may occur in the future could result in misstatements of our results of operations, restatements of our financial statements or otherwise adversely impact our financial condition, results of operations, cash flows, or the market price of our Class A common stock and our ability to satisfy our debt service obligations and to pay dividends and distributions to the holders of our Class A common stock.
In addition, while we expect to continue to make regular quarterly distributions to the holders of our Class A common stock, if sufficient cash is not available for distribution from our operations, we may have to fund distributions from working 31 Table of Contents capital or net proceeds from asset sales, borrow to provide funds for such distributions, or reduce the amount of such distributions.
In addition, while we expect to continue to make regular quarterly distributions to the holders of our Class A common stock, if sufficient cash is not available for distribution from our operations, we may have to fund distributions from working capital or net proceeds from asset sales, borrow to provide funds for such distributions, or reduce the amount of such distributions.
If the property taxes we pay increase, our financial condition, results of operations, cash flows, per share trading price of our Class A common stock and our ability to satisfy our principal and interest obligations and to make distributions to our stockholders could be adversely affected. We may be exposed to risks associated with property development and redevelopment.
If the property taxes we pay increase, our financial condition, results of operations, cash flows, per share trading price of our Class A common stock and our ability to satisfy our principal and interest obligations and to make distributions to our stockholders could be adversely affected. 12 Table of Contents We may be exposed to risks associated with property development and redevelopment.
For taxable years beginning before January 1, 2026, non-corporate taxpayers may deduct up to 20% of certain pass-through business income, including “qualified REIT dividends” (generally, dividends received by a REIT shareholder that are not designated as capital gain dividends or qualified dividend income), subject to certain limitations.
For taxable years beginning before January 1, 2026, non-corporate taxpayers may deduct up to 20% of certain pass-through business income, including “qualified REIT dividends” (generally, dividends received by a REIT 29 Table of Contents shareholder that are not designated as capital gain dividends or qualified dividend income), subject to certain limitations.
Should the impact of climate change be material in nature or occur for lengthy periods of time, our properties, operations or business would be adversely affected. Our properties may be subject to impairment charges and we are subject to risks related to commercial real estate ownership that could reduce the value of our properties.
Should the impact of climate change be material in nature or occur for lengthy periods of time, our properties, operations or business would be adversely affected. 18 Table of Contents Our properties may be subject to impairment charges and we are subject to risks related to commercial real estate ownership that could reduce the value of our properties.
We have entered into indemnification agreements with each of our executive officers and directors whereby we will indemnify our directors and executive officers to the fullest extent permitted by Maryland law 24 Table of Contents against all expenses and liabilities incurred in their capacity as an officer and/or director, subject to limited exceptions.
We have entered into indemnification agreements with each of our executive officers and directors whereby we will indemnify our directors and executive officers to the fullest extent permitted by Maryland law against all expenses and liabilities incurred in their capacity as an officer and/or director, subject to limited exceptions.
RISK FACTORS Risk Factor Summary Risks Related to the USPS • Our business is substantially dependent on the demand for leased postal properties. • The USPS’ inability to meet its financial obligations may have a material adverse effect on our business. • The USPS has a substantial amount of indebtedness and is subject to rising expenses. • The USPS is subject to congressional oversight and regulation by the PRC and other agencies. • Intense competition faced by the USPS. • The USPS’ potential insolvency, inability to pay rent or bankruptcy. • Our properties may have a higher risk of terrorist attacks. • Litigation and catastrophic events involving the USPS may disrupt our business.
RISK FACTORS Risk Factor Summary Risks Related to the USPS • Our business is substantially dependent on the demand for leased postal properties. • The USPS’ inability to meet its financial obligations may have a material adverse effect on our business. • The USPS has a substantial amount of indebtedness and is subject to rising expenses. • The USPS is subject to congressional oversight and regulation by the PRC and other agencies. • Intense competition faced by the USPS. • The USPS’ potential insolvency, inability to pay rent or bankruptcy. • The implementation of USPS's Ten-Year Plan. • Our properties may have a higher risk of terrorist attacks. • Litigation and catastrophic events involving the USPS may disrupt our business.
In addition, we may incur unexpected increase in maintenance, repair or capital expenses as tenants adjust their standards, requirements, demands and expectations for the operation of the leased properties, increase their inspection efforts and require certain upgrades or as we acquire more properties with landlord being responsible 10 Table of Contents for certain maintenance and capital improvements.
In addition, we may incur unexpected increase in maintenance, repair or capital expenses as tenants adjust their standards, requirements, demands and expectations for the operation of the leased properties, increase their inspection efforts and require certain upgrades or as we acquire more properties with landlord being responsible for certain maintenance and capital improvements.
Such a refinancing or sale could affect the rate of return to stockholders and the projected time of disposition of our assets. Covenants in our debt instruments could adversely affect our financial condition. Our Credit Facilities and other debt instruments contain certain customary restrictions, requirements and other limitations on our ability to incur indebtedness.
Such a refinancing or sale could affect the rate of return to stockholders and the projected time of disposition of our assets. 13 Table of Contents Covenants in our debt instruments could adversely affect our financial condition. Our Credit Facilities and other debt instruments contain certain customary restrictions, requirements and other limitations on our ability to incur indebtedness.
Our continued success and our ability to manage anticipated future growth depend, in large part, upon the efforts of key personnel, particularly Messrs. Spodek, Garber and Klein who have extensive market knowledge and relationships and exercise substantial influence over our acquisition, operational and financing activities.
Our continued success and our ability to manage anticipated future growth depend, in large part, upon the efforts of key personnel, particularly Messrs. Spodek, Garber and Klein who have extensive market knowledge and relationships and 14 Table of Contents exercise substantial influence over our acquisition, operational and financing activities.
These restrictions could limit our ability to sell properties at a time, or on terms, that would be favorable absent such restrictions. Illiquidity of commercial real estate could significantly impede our ability to respond to adverse changes in the performance of our properties and harm our financial condition.
These restrictions could limit our ability to sell properties at a time, or on terms, that would be favorable absent such restrictions. 11 Table of Contents Illiquidity of commercial real estate could significantly impede our ability to respond to adverse changes in the performance of our properties and harm our financial condition.
Transitioning to new or upgraded systems can create difficulties, including potential disruptions to current processes and security complexities. In addition, our information technology systems may require further modification as we grow and as our business needs change, which could prolong difficulties we experience with transitions.
Transitioning to, and implementing, new or upgraded systems can create difficulties, including potential disruptions to current processes and security complexities. In addition, our information technology systems and AI-related needs may require further modification as we grow and as our business needs change, which could prolong difficulties we experience with transitions.
In addition, the presence of contamination or the failure to remediate contamination at our properties may expose us to third-party 16 Table of Contents liability for costs of remediation and/or personal or property damage or materially adversely affect our ability to sell, lease or develop our properties or to borrow using the properties as collateral.
In addition, the presence of contamination or the failure to remediate contamination at our properties may expose us to third-party liability for costs of remediation and/or personal or property damage or materially adversely affect our ability to sell, lease or develop our properties or to borrow using the properties as collateral.
There can be no assurance that the USPS will be able to extend the term of the NPA beyond expiration or, if the FFB declines to purchase the notes issued by the USPS, obtain alternative sources of financing on 6 Table of Contents the terms or timing that it expects or at all.
There can be no assurance that the USPS will be able to extend the term of the NPA beyond expiration or, if the FFB declines to purchase the notes issued by the USPS, obtain alternative sources of financing on the terms or timing that it expects or at all.
We also continually evaluate whether events or circumstances have occurred that indicate the remaining estimated useful lives of definite-lived intangible assets, excluding goodwill, and other long-lived assets may warrant revision or whether the remaining balance of such assets may not be recoverable.
We also continually evaluate 20 Table of Contents whether events or circumstances have occurred that indicate the remaining estimated useful lives of definite-lived intangible assets, excluding goodwill, and other long-lived assets may warrant revision or whether the remaining balance of such assets may not be recoverable.
Terrorist attacks, to the extent that these properties are uninsured or underinsured, could have a material adverse effect on our business, financial condition and results of operations. 8 Table of Contents Litigation and catastrophic events involving the USPS may disrupt our business.
Terrorist attacks, to the extent that these properties are uninsured or underinsured, could have a material adverse effect on our business, financial condition and results of operations. Litigation and catastrophic events involving the USPS may disrupt our business.
Spodek and his affiliates owned approximately 37.5% of the outstanding OP Units (including LTIP Units) that are not owned by us and approximately 3.9% of the outstanding shares of our Class A common stock and all of the Voting Equivalency stock, which together represent an approximate 10.6% beneficial economic interest in our Company on a fully diluted basis.
Spodek and his affiliates owned approximately 34.6% of the outstanding OP Units (including LTIP Units) that are not owned by us and approximately 3.9% of the outstanding shares of our Class A common stock and all of the Voting Equivalency stock, which together represent an approximate 10.7% beneficial economic interest in our Company on a fully diluted basis.
In accordance with U.S. generally accepted accounting practices ("GAAP"), we are required to assess any goodwill and indefinite-lived intangible assets assumed in any acquisition transactions, annually, or more frequently whenever events or 19 Table of Contents changes in circumstances indicate potential impairment, such as changing market conditions or any changes in key assumptions.
In accordance with U.S. generally accepted accounting practices ("GAAP"), we are required to assess any goodwill and indefinite-lived intangible assets assumed in any acquisition transactions, annually, or more frequently whenever events or changes in circumstances indicate potential impairment, such as changing market conditions or any changes in key assumptions.
Our REIT status depends upon various factual matters and circumstances that may not be entirely within our control. Moreover, our qualification and taxation as a REIT depend upon our ability to meet on a continuing basis, through actual annual operating results, certain qualification tests set forth in the federal tax laws.
Our REIT status depends upon various factual matters and circumstances that may not be entirely within our control. Moreover, our 26 Table of Contents qualification and taxation as a REIT depend upon our ability to meet on a continuing basis, through actual annual operating results, certain qualification tests set forth in the federal tax laws.
These actions could have the effect of reducing our income and amounts available for distribution to our stockholders. 26 Table of Contents The prohibited transactions tax may limit our ability to dispose of our properties. A REIT’s net income from prohibited transactions is subject to a 100% tax.
These actions could have the effect of reducing our income and amounts available for distribution to our stockholders. The prohibited transactions tax may limit our ability to dispose of our properties. A REIT’s net income from prohibited transactions is subject to a 100% tax.
As a partnership, our Operating Partnership generally will not be subject to federal income tax on its income. Instead, 28 Table of Contents each of its partners, including us, will be allocated, and may be required to pay tax with respect to, its share of our Operating Partnership’s income.
As a partnership, our Operating Partnership generally will not be subject to federal income tax on its income. Instead, each of its partners, including us, will be allocated, and may be required to pay tax with respect to, its share of our Operating Partnership’s income.
Certain types of losses, generally of a catastrophic nature, such as earthquakes, storms, hurricanes and floods, are often subject to material deductibles, may be uninsurable or are not economically insurable by us.
Certain types of 15 Table of Contents losses, generally of a catastrophic nature, such as earthquakes, storms, hurricanes and floods, are often subject to material deductibles, may be uninsurable or are not economically insurable by us.
Changes to our policies with regards to the foregoing could materially adversely affect our financial condition, results of operations and cash flow. Our rights and the rights of our stockholders to take action against our directors and officers are limited.
Changes to our policies with regards to the foregoing could materially adversely affect our financial condition, results of operations and cash flow. 25 Table of Contents Our rights and the rights of our stockholders to take action against our directors and officers are limited.
The remainder of our investment in securities (other than government securities, securities of TRSs and qualified real estate assets) generally cannot include more than 10% of the outstanding voting securities of any one issuer or more than 10% of the total value of the outstanding securities of any one issuer.
The remainder of our investment in securities (other 27 Table of Contents than government securities, securities of TRSs and qualified real estate assets) generally cannot include more than 10% of the outstanding voting securities of any one issuer or more than 10% of the total value of the outstanding securities of any one issuer.
Portions of the Ten-Year Plan require Congressional approval, which we cannot predict at this time and there will be additional conversations with stakeholders about implementation and changes to the Ten-Year Plan.
Portions of the Ten-Year Plan require Congressional approval, which we 8 Table of Contents cannot predict at this time and there will be additional conversations with stakeholders about implementation and changes to the Ten-Year Plan.
In 12 Table of Contents addition, to the extent we are unable to refinance our debt when it becomes due, we will have fewer debt guarantee opportunities available to offer under our tax protection agreements, which could trigger an obligation to indemnify the protected parties under the tax protection agreements.
In addition, to the extent we are unable to refinance our debt when it becomes due, we will have fewer debt guarantee opportunities available to offer under our tax protection agreements, which could trigger an obligation to indemnify the protected parties under the tax protection agreements.
Accordingly, we cannot be certain that we will be successful in qualifying as a REIT. 25 Table of Contents If we fail to maintain our qualification as a REIT in any taxable year, we will face serious tax consequences that will substantially reduce the funds available for distributions to our stockholders because: • we would not be allowed a deduction for dividends paid to stockholders in computing our taxable income and would be subject to federal income tax at regular corporate rates; • we could be subject to increased state and local taxes; and • unless we are entitled to relief under certain federal income tax laws, we could not re-elect REIT status until the fifth calendar year after the year in which we failed to qualify as a REIT.
If we fail to maintain our qualification as a REIT in any taxable year, we will face serious tax consequences that will substantially reduce the funds available for distributions to our stockholders because: • we would not be allowed a deduction for dividends paid to stockholders in computing our taxable income and would be subject to federal income tax at regular corporate rates; • we could be subject to increased state and local taxes; and • unless we are entitled to relief under certain federal income tax laws, we could not re-elect REIT status until the fifth calendar year after the year in which we failed to qualify as a REIT.
As of February 29, 2024, the leases at 91 of our properties were expired and the USPS is occupying such properties as a holdover tenant. If we are not successful in renewing these expired leases, we will likely experience reduced occupancy, rental income and net operating income and potential impairment loss.
As of February 26, 2025, the leases at seven of our properties were expired and the USPS is occupying such properties as a holdover tenant. If we are not successful in renewing these expired leases, we will likely experience reduced occupancy, rental income and net operating income and potential impairment loss.
Spodek and his affiliates held approximately 9.4% of the combined voting power of our outstanding shares of common stock as of February 29, 2024. Pursuant to his ownership of Class A common stock and Class B common stock, $0.01 par value per share (the “Voting Equivalency stock”), Mr.
Spodek and his affiliates held approximately 9.2% of the combined voting power of our outstanding shares of common stock as of February 26, 2025. Pursuant to his ownership of Class A common stock and Class B common stock, $0.01 par value per share (the “Voting Equivalency stock”), Mr.
We have not requested and do not plan to request a ruling from the Internal Revenue Services (the "IRS") that we qualify as a REIT, and the statements in this Annual Report on Form 10-K are not binding on the IRS or any court.
We have not requested and do not plan to request a ruling from the Internal Revenue Services (the "IRS") that we qualify as a REIT, and the statements in this Annual Report on Form 10-K are not binding on the IRS or any court. Accordingly, we cannot be certain that we will be successful in qualifying as a REIT.
If we are subject to below-market lease rates on a significant number of our properties, rental rates for our properties decrease, our existing tenants do not renew their leases or we do not sell vacated properties on favorable terms, our financial condition, results of operations, cash flow, cash available for distributions and our ability to service our debt obligations could be materially adversely affected.
If we are subject to below-market lease rates on a significant number of our properties, rental rates for our properties decrease, our existing tenants do not renew their leases or we do not sell vacated properties on favorable terms, our financial condition, results of operations, cash flow, cash available for distributions and our ability to service our debt obligations could be materially adversely affected. 10 Table of Contents We may incur significant maintenance, repair and capital expenses under our leases.
If we sell any asset that we acquired as part of the merger between us and UPH within five years after the merger and recognize a taxable gain on the sale, we will be taxed at the highest corporate rate on an amount equal to the lesser of: • the amount of gain that we recognize at the time of the sale; or • the amount of gain that we would have recognized if we had sold the asset at the time of the merger for its then fair market value.
If we sell any asset that we acquired as part of the merger between us and UPH within five years after the merger and recognize a taxable gain on the sale, we will be taxed at the highest corporate rate on an amount equal to the lesser of: • the amount of gain that we recognize at the time of the sale; or • the amount of gain that we would have recognized if we had sold the asset at the time of the merger for its then fair market value. 28 Table of Contents This rule potentially could inhibit us from selling assets acquired as part of the merger within five years after the merger.
Future issuances of these securities also could adversely affect the terms upon which we obtain additional capital through the sale of equity securities. In addition, future sales or issuances of our Class A common stock may be dilutive to existing stockholders. We face cybersecurity risks and risks associated with security breaches.
Future issuances of these securities also could adversely affect the terms upon which we obtain additional capital through the sale of equity securities. In addition, future sales or issuances of our Class A common stock may be dilutive to existing stockholders.
As the owner of the buildings on our properties, we could face liability for the presence of hazardous materials, such as asbestos, lead or underground storage tanks used to store petroleum products or other potentially hazardous or toxic substances, or other adverse conditions, such as poor indoor air quality, in our buildings.
As a result, we could potentially incur material liability for these issues. 17 Table of Contents As the owner of the buildings on our properties, we could face liability for the presence of hazardous materials, such as asbestos, lead or underground storage tanks used to store petroleum products or other potentially hazardous or toxic substances, or other adverse conditions, such as poor indoor air quality, in our buildings.
Difficulties in implementing new or upgraded information technology systems or significant system failures or delays or the failure to successfully modify our systems and respond to changes in our business needs could adversely affect our business and results of operations. Use of social media may adversely impact our reputation and business.
Difficulties in implementing new or upgraded information technology and AI systems, or significant system failures or delays or the failure to successfully modify our systems and respond to changes in our business needs, could adversely affect our business and results of operations.
We use an estimate of the related undiscounted cash flow over the remaining life of such asset in measuring whether the asset is recoverable. These impairment charges could be significant and could adversely affect our financial condition, results of operations and cash available for distribution. We may have difficulty implementing changes to our information technology systems.
We use an estimate of the related undiscounted cash flow over the remaining life of such asset in measuring whether the asset is recoverable. These impairment charges could be significant and could adversely affect our financial condition, results of operations and cash available for distribution.
Spodek and his affiliates own, directly or indirectly, a substantial beneficial interest in our company. • Conflicts of interest may exist or could arise in the future between the interests of our stockholders and the interests of holders of units in our Operating Partnership. • Our charter contains certain provisions restricting the ownership and transfer of our stock. 4 Table of Contents • We could increase our equity issuance without stockholder approval. • Certain provisions of the Maryland General Corporation Law could inhibit changes of control. • Certain provisions of our Operating Partnership may delay or prevent unsolicited acquisitions of us. • Tax protection agreements may limit our ability to sell or otherwise dispose of certain properties and may require our Operating Partnership to maintain certain debt levels that otherwise would not be required. • Our Board of Directors may change our strategies, policies and procedures without stockholder approval, and we may become more highly leveraged, which may increase our risk of default under our debt obligations. • Our rights and the rights of our stockholders to take action against our directors and officers are limited. • We are a holding company with no direct operations, and the interests of our stockholders are structurally subordinated to all liabilities and obligations of our Operating Partnership and its subsidiaries. • Our Operating Partnership may issue additional OP Units to third parties without the consent of our stockholders.
Spodek and his affiliates own, directly or indirectly, a substantial beneficial interest in our company. • Conflicts of interest may exist or could arise in the future between the interests of our stockholders and the interests of holders of units in our Operating Partnership. • Our charter contains certain provisions restricting the ownership and transfer of our stock. • We could increase our equity issuance without stockholder approval. • Certain provisions of the Maryland General Corporation Law could inhibit changes of control. • Our choice of venue for certain types of actions and proceedings may limit our stockholders' ability to obtain a favorable judicial forum for disputes with us or our directors, officers or employees. • Certain provisions of our Operating Partnership may delay or prevent unsolicited acquisitions of us. • Tax protection agreements may limit our ability to sell or otherwise dispose of certain properties and may require our Operating Partnership to maintain certain debt levels that otherwise would not be required. • Although we are no longer an “emerging growth company,” we are still a “smaller reporting company,” with reduced disclosure requirements. • Our Board of Directors may change our strategies, policies and procedures without stockholder approval, and we may become more highly leveraged, which may increase our risk of default under our debt obligations. • Our rights and the rights of our stockholders to take action against our directors and officers are limited. • We are a holding company with no direct operations, and the interests of our stockholders are structurally subordinated to all liabilities and obligations of our Operating Partnership and its subsidiaries. • Our Operating Partnership may issue additional OP Units to third parties without the consent of our stockholders.
We have made significant investments to update and improve our information technology systems and expect such investments to continue in order to meet our business needs, including for sourcing acquisition opportunities, managing the maintenance and repair of our properties and enhancing our cybersecurity.
We have made significant investments to update and improve our information technology systems and anticipate continuing such investments, as well as additional investments in AI, in order to meet our business needs, including for sourcing acquisition opportunities, managing the maintenance and repair of our properties and enhancing our cybersecurity.
In the past, securities class action litigation has often been instituted against companies following periods of volatility in their stock price. This type of litigation could result in substantial costs and divert our management’s attention and resources.
In the past, securities class action litigation has often been instituted against companies following periods of volatility in their stock price. This type of litigation could result in substantial costs and divert our management’s attention and resources. We face cybersecurity risks and risks associated with security breaches.
We can provide no assurance that the data security measures designed to protect confidential information on our systems established by us and our service providers will be able to prevent unauthorized access to this personal information.
We also rely extensively on computer systems to process transactions and manage our business. We can provide no assurance that the data security measures designed to protect confidential information on our systems established by us and our service providers will be able to prevent unauthorized access to this personal information.
As of February 29, 2024, approximately 19.7% of the outstanding OP Units (including the LTIP Units) of our Operating Partnership were held by third parties. We may, in connection with our acquisition of properties or otherwise, continue to issue additional OP Units to third parties.
As of February 26, 2025, approximately 22.0% of the outstanding OP Units (including the LTIP Units) of our Operating Partnership were held by third parties. We may, in connection with our acquisition of properties or otherwise, continue to issue additional OP Units to third parties.
The USPS has a substantial amount of indebtedness and is subject to rising expenses. The USPS has significant outstanding debt obligations to the Federal Financing Bank (the “FFB”). Under the note purchase agreement between the USPS and the FFB (the "NPA"), the USPS can issue short-term or long-term notes to the FFB and receive funds within two business days.
The USPS has significant outstanding debt obligations to the Federal Financing Bank (the “FFB”). Under the note purchase agreement between the USPS and the FFB (the "NPA"), the USPS can issue short-term or long-term notes to the FFB and receive funds within two business days.
General Risk Factors • An increase in market interest rates may have an adverse effect on the market price of our securities. • Inflation may adversely affect our financial condition and results of operations. • Changes in accounting pronouncements could adversely impact our reported financial performance. • We could be adversely impacted if there are deficiencies in our disclosure controls or internal controls. • Future offerings of equity securities may adversely affect the market price of our Class A common stock. • The market price of our Class A common stock may be volatile and may decline. • We face cybersecurity risks and risks associated with security breaches. • Risks associated with third-party expectations relating to environmental, social and governance factors.
General Risk Factors • An increase in market interest rates may have an adverse effect on the market price of our securities. • Inflation may adversely affect our financial condition and results of operations. • Changes in accounting pronouncements could adversely impact our reported financial performance. • We could be adversely impacted if there are deficiencies in our disclosure controls or internal controls. • Future offerings of equity securities may adversely affect the market price of our Class A common stock. • The market price of our Class A common stock may be volatile and may decline. • We face cybersecurity risks and risks associated with security breaches. • Risks associated with third-party expectations relating to environmental, social and governance factors. 5 Table of Contents The following risk factors may adversely affect our overall business, financial condition, results of operations, cash flows and prospects; our ability to make distributions to our stockholders; our access to capital; or the market price of our Class A common stock, as further described in each risk factor below.
When we have geographic concentration of exposures, a single catastrophe (such as an earthquake) or destructive weather event (such as a tornado or hurricane) affecting a region may have a significant negative effect on our financial condition and results of operations.
When we have geographic concentration of exposures, a single catastrophe (such as an earthquake) or destructive weather event (such as a tornado or hurricane) affecting a region may have a significant negative effect on our financial condition and results of operations. Our financial results may be adversely affected by our exposure to losses arising from natural disasters or severe weather.
Furthermore, if we dispose any property in transactions that are intended to qualify for federal income tax deferral as a “like-kind exchange” under Section 1031 of the Code, it is possible that such transaction could later be determined to have been taxable or that we may be unable to identify and complete the acquisition of a suitable replacement property to complete a 1031 exchange and therefore face adverse tax consequences. 11 Table of Contents In addition, the Internal Revenue Code of 1986, as amended (the "Code"), imposes restrictions on a REIT’s ability to dispose of properties that are not applicable to other types of real estate companies.
Furthermore, if we dispose any property in transactions that are intended to qualify for federal income tax deferral as a “like-kind exchange” under Section 1031 of the Code, it is possible that such transaction could later be determined to have been taxable or that we may be unable to identify and complete the acquisition of a suitable replacement property to complete a 1031 exchange and therefore face adverse tax consequences.
The use of social media platforms, including blogs, social media websites and other forms of internet-based communication, has become commonplace. Negative commentary regarding us by third parties may be posted on social media platforms or similar devices at any time and may harm our reputation or business. We also use social media platforms to disseminate information and source acquisition opportunities.
Negative commentary regarding us by third parties may be posted on social media platforms or similar devices at any time and may harm our reputation or business. We also use social media platforms to disseminate information and source acquisition opportunities.
These laws, which are generally incorporated into our leases with the USPS, regulate how we conduct business, require us to administer various compliance programs and require us to impose compliance responsibilities on some of our contractors.
We are also subject to compliance with a wide variety of complex legal requirements because we are a federal government contractor. These laws, which are generally incorporated into our leases with the USPS, regulate how we conduct business, require us to administer various compliance programs and require us to impose compliance responsibilities on some of our contractors.
From time to time the Financial Accounting Standards Board and the SEC, which create and interpret appropriate accounting standards, may change the financial accounting and reporting standards or their interpretation and application of these standards that govern the preparation of our financial statements. These changes could have a material impact on our reported financial condition and results of operations.
From time to time the Financial Accounting Standards Board and the SEC, which create and interpret appropriate accounting standards, may change the financial accounting and reporting standards or their interpretation and application of these standards that govern the preparation of our financial statements.
As of February 29, 2024, the leases at 91 of our properties, representing approximately 631,000 net leasable interior square feet, were expired and the USPS is occupying such properties as a holdover tenant.
As of February 26, 2025, the leases at seven of our properties, representing approximately 28,258 net leasable interior square feet, were expired and the USPS is occupying such properties as a holdover tenant.
We and our stockholders could be adversely affected by any new federal income tax law, regulation or administrative interpretation. 29 Table of Contents General Risk Factors An increase in market interest rates may have an adverse effect on the market price of our securities.
Treasury Department, which could result in statutory changes as well as frequent revisions to regulations and interpretations. We and our stockholders could be adversely affected by any new federal income tax law, regulation or administrative interpretation. General Risk Factors An increase in market interest rates may have an adverse effect on the market price of our securities.
We depend on our ability to attract and retain skilled management personnel in order to successfully manage the day-to-day operations of our company and execute our business plan.
We compete intensely with various real estate and other companies in attracting and retaining qualified and skilled personnel. We depend on our ability to attract and retain skilled management personnel in order to successfully manage the day-to-day operations of our company and execute our business plan.
To the extent climate change causes changes in weather patterns, our markets could experience increases in extreme and severe weather, including floods, hurricanes, severe winter storms and tornadoes and unpredictable weather patterns.
However, the effects of climate change could have a material adverse effect on our properties, operations and business. To the extent climate change causes changes in weather patterns, our markets could experience increases in extreme and severe weather, including floods, hurricanes, severe winter storms and tornadoes and unpredictable weather patterns.
Nevertheless, we have entered and may in the future enter into tax protection agreements to assist contributors of properties to our Operating Partnership in deferring the recognition of taxable gain as a result of and after any such contribution.
Nevertheless, we have entered and may in the future enter into tax protection agreements to assist contributors of properties to our Operating Partnership in deferring the recognition of taxable gain as a result of and after any such contribution. Although we are no longer an “emerging growth company,” we are still a “smaller reporting company,” with reduced disclosure requirements.
If there were a material title defect related to any of our properties that is not adequately covered by a title insurance policy, we could lose some or all of our capital invested in and our anticipated profits from such property. 18 Table of Contents We may incur significant costs complying with various federal, state and local laws, regulations and covenants that are applicable to our properties.
If there were a material title defect related to any of our properties that is not adequately covered by a title insurance policy, we could lose some or all of our capital invested in and our anticipated profits from such property.
Our disclosure controls and procedures and internal control over financial reporting may not prevent all errors, misstatements or misrepresentations. There can be no guarantee that our internal control over financial reporting will be effective in accomplishing all control objectives all of the time.
There can be no guarantee that our internal control over financial reporting will be effective in accomplishing all control objectives all of the time.
In addition, we do not know whether existing requirements will change or whether future requirements will require us to make significant unanticipated expenditures that will adversely impact our financial condition, results of operations and cash flow. We are also subject to compliance with a wide variety of complex legal requirements because we are a federal government contractor.
In 19 Table of Contents addition, we do not know whether existing requirements will change or whether future requirements will require us to make significant unanticipated expenditures that will adversely impact our financial condition, results of operations and cash flow.
Under agreements for our Credit Facilities or other borrowings, we may be subject to various financial covenants that may inhibit our ability to make distributions to our stockholders, which could restrict us from making sufficient distributions to maintain our REIT status.
Under agreements for our Credit Facilities or other borrowings, we may be subject to various financial covenants that may inhibit our ability to make distributions to our stockholders, which could restrict us from making sufficient distributions to maintain our REIT status. 30 Table of Contents New legislation or administrative or judicial action, in each instance potentially with retroactive effect, could adversely affect us or our stockholders.
We may not be aware of all potential or existing environmental contamination liabilities at the properties in our portfolio or at the properties we acquire. As a result, we could potentially incur material liability for these issues.
We may not be aware of all potential or existing environmental contamination liabilities at the properties in our portfolio or at the properties we acquire.
Additionally, we rely on third-party service providers in our conduct of day-to-day property management, leasing and other activities at our properties and we can provide no assurance that the networks and systems that our third-party vendors have established or used will be effective.
Additionally, we rely on third-party service providers in our conduct of day-to-day property management, leasing and other activities at our properties and we can provide no assurance that the networks and systems that our third-party vendors have established or used will be effective. 33 Table of Contents In the normal course of business, we and our service providers (including service providers engaged in providing property management, leasing, accounting and/or payroll services) collect and retain certain personal information provided by our tenants, employees and vendors.
If we cease to qualify as a REIT, we would become subject to federal income tax on our taxable income and would no longer be required to distribute most of our taxable income to our stockholders, which may have adverse consequences on our total return to our stockholders. 27 Table of Contents Our transactions with our TRS will cause us to be subject to a 100% penalty tax on certain income or deductions if those transactions are not conducted on arm’s-length terms.
If we cease to qualify as a REIT, we would become subject to federal income tax on our taxable income and would no longer be required to distribute most of our taxable income to our stockholders, which may have adverse consequences on our total return to our stockholders.
Disputes between us and partners or co-venturers may result in litigation or arbitration that would increase our expenses and prevent our officers and directors from focusing their time and effort on our 15 Table of Contents business.
Disputes between us and partners or co-venturers may result in litigation or arbitration that would increase our expenses and prevent our officers and directors from focusing their time and effort on our business. Consequently, actions by or disputes with partners or co-venturers might result in subjecting properties owned by the partnership or joint venture to additional risk.
Our joint ventures may be subject to debt and, during periods of volatile credit markets, the refinancing of such debt may require equity capital calls. Competition for skilled personnel could increase our labor costs. We compete intensely with various real estate and other companies in attracting and retaining qualified and skilled personnel.
In addition, we may in certain circumstances be liable for the actions of our third-party partners or co-venturers. Our joint ventures may be subject to debt and, during periods of volatile credit markets, the refinancing of such debt may require equity capital calls. Competition for skilled personnel could increase our labor costs.
Properties are subject to various covenants and federal, state and local laws and regulatory requirements, including permitting and licensing requirements.
We may incur significant costs complying with various federal, state and local laws, regulations and covenants that are applicable to our properties. Properties are subject to various covenants and federal, state and local laws and regulatory requirements, including permitting and licensing requirements.
New legislation or administrative or judicial action, in each instance potentially with retroactive effect, could adversely affect us or our stockholders. The federal income tax treatment of REITs may be modified, possibly with retroactive effect, by legislative, judicial or administrative action at any time, which could affect the federal income tax treatment of an investment in us.
The federal income tax treatment of REITs may be modified, possibly with retroactive effect, by legislative, judicial or administrative action at any time, which could affect the federal income tax treatment of an investment in us. The federal income tax rules dealing with REITs constantly are under review by persons involved in the legislative process, the IRS and the U.S.

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Item 1C. Cybersecurity

Cybersecurity — threats and controls disclosure

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Biggest changeWe and our MSP identify, assess and manage material cybersecurity threats and risks to our Information Systems and Sensitive Data through the following, among others: • a multidisciplinary team, including a dedicated technology committee (the “Technology Committee”) comprising members from senior management, asset management and accounting and legal functions, in conjunction with our MSP and other third-party service vendors, to identify, assess and manage cybersecurity threats and risks; • various internal processes and procedures to monitor and evaluate threat environment and our risk profile using methods such as manual and automated tools, subscribing to reports and services that identify and analyze cybersecurity threats, conducting scans of the threat environment, evaluating our industry’s risk profile, utilizing internal and external audits and conducting threat and vulnerability assessments; • various technical, physical and organizational processes and policies to manage and mitigate material cybersecurity risks, such as risk assessments, incident detection and response, vulnerability management, disaster recovery and business continuity plans, internal controls within our accounting and financial reporting functions, encryption of data, network security controls, access controls, physical security, asset management, systems monitoring, vendor risk management program, employee training and penetration testing; and • working with third-party vendors from time to time that assist us to identify, assess and manage cybersecurity risks, such as professional services firms and penetration testing firms. 33 Table of Contents For third-party service vendors that perform a variety of important functions for our business, we seek to engage reliable, reputable service vendors that maintain cybersecurity programs.
Biggest changeWe and our MSP identify, assess and manage material cybersecurity threats and risks to our Information Systems and Sensitive Data through the following, among others: • a multidisciplinary team, including a dedicated technology committee (the “Technology Committee”) comprising members from senior management, asset management and accounting and legal functions, in conjunction with our MSP and other third-party service vendors, to identify, assess and manage cybersecurity threats and risks; • various internal processes and procedures to monitor and evaluate threat environment and our risk profile using methods such as manual and automated tools, subscribing to reports and services that identify and analyze cybersecurity threats, conducting scans of the threat environment, evaluating our industry’s risk profile, utilizing internal and external audits and conducting threat and vulnerability assessments; 34 Table of Contents • various technical, physical and organizational processes and policies to manage and mitigate material cybersecurity risks, such as risk assessments, incident detection and response, vulnerability management, disaster recovery and business continuity plans, internal controls within our accounting and financial reporting functions, encryption of data, network security controls, access controls, physical security, asset management, systems monitoring, vendor risk management program, employee training and penetration testing; and • working with third-party vendors from time to time that assist us to identify, assess and manage cybersecurity risks, such as professional services firms and penetration testing firms.
Our internal cybersecurity incident response processes are designed to escalate cybersecurity incidents to members of management depending on the circumstances and reporting to the Audit Committee for certain cybersecurity incidents, which also allows decisions regarding the public disclosure and reporting of such incidents to be made by management, the Audit Committee and the Board in a timely manner.
Our internal cybersecurity incident response processes are designed to escalate cybersecurity incidents to members of management depending on the circumstances and reporting to the Audit Committee for certain cybersecurity incidents, which also allows decisions regarding the public disclosure and reporting of such incidents to be made by management, the Audit Committee and the Board in a timely manner. 35 Table of Contents
Added
For third-party service vendors that perform a variety of important functions for our business, we seek to engage reliable, reputable service vendors that maintain cybersecurity programs.

Item 2. Properties

Properties — owned and leased real estate

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Biggest changeScheduled Lease Expirations As of December 31, 2023, the weighted average remaining years to maturity pursuant to our leases with the USPS was approximately three years, with expirations through 2031, assuming tenants do not exercise any existing renewal, termination or purchase options.
Biggest changeReal Estate and Accumulated Depreciation” of this Annual Report on Form 10-K. 36 Table of Contents Scheduled Lease Expirations As of December 31, 2024, the weighted average remaining years to maturity pursuant to our leases with the USPS was approximately four years, with expirations through 2035, assuming tenants do not exercise any existing renewal, termination or purchase options.
The table below details scheduled lease expirations, as of December 31, 2023, for our properties for the periods indicated.
The table below details scheduled lease expirations, as of December 31, 2024, for our properties for the periods indicated.
(2) Includes approximately 588,000 of interior lease square footage occupied by month-to-month holdover leases or leases that expired during the year ended December 31, 2023. Holdover rent is typically paid as the greater of estimated market rent or the rent amount due under the expired lease.
(2) Includes approximately 164,247 of interior lease square footage occupied by month-to-month holdover leases or leases that expired during the year ended December 31, 2024. Holdover rent is typically paid as the greater of estimated market rent or the rent amount due under the expired lease.
ITEM 2. PROPERTIES As of December 31, 2023, we owned a portfolio of 1,509 properties located in 49 states and one territory, comprising approximately of 5.9 million net leasable interior square feet. Our properties are leased primarily to the USPS. The following 34 Table of Contents map shows our footprint of owned properties as of December 31, 2023.
ITEM 2. PROPERTIES As of December 31, 2024, we owned a portfolio of 1,703 properties located in 49 states and one territory, comprising approximately of 6.4 million net leasable interior square feet. Our properties are leased primarily to the USPS. The following map shows our footprint of owned properties as of December 31, 2024.
As of December 31, 2023, we also managed an additional 397 properties owned by our chief executive officer and his affiliates. Information regarding our properties as of December 31, 2023 are included in Item 15. “Exhibits and Financial Statement Schedules—Schedule III. Real Estate and Accumulated Depreciation” of this Annual Report on Form 10-K.
As of December 31, 2024, we also managed 360 properties owned by our chief executive officer and his affiliates. Information regarding our properties as of December 31, 2024 are included in Item 15. “Exhibits and Financial Statement Schedules—Schedule III.
Removed
Number of Leases Expiring Total Lease Square Footage Annualized Lease Revenue (1) Year Amount % Amount % 2023 (2)(3) 88 619,182 10.6 % 4,077,999 7.4 % 2024 107 474,895 8.1 % 4,851,676 8.8 % 2025 217 618,453 10.5 % 7,306,019 13.3 % 2026 302 1,099,533 18.8 % 10,823,220 19.7 % 2027 431 1,372,088 23.4 % 14,094,974 25.7 % 2028 109 324,231 5.5 % 4,018,369 7.3 % 2029 124 427,532 7.3 % 4,641,361 8.4 % 2030 127 890,854 15.2 % 4,863,592 8.9 % 2031 6 35,800 0.6 % 258,126 0.5 % Totals 1,511 5,862,568 100.0 % $ 54,935,336 100.0 % 35 Table of Contents Explanatory Notes : (1) Annualized contractual rent in effect on December 31, 2023 for all of our leases (including those accounted for as direct financing leases).
Added
Number of Leases Expiring Total Lease Square Footage Annualized Lease Revenue (1) Year Amount % Amount % 2024 (2) 9 166,714 2.6 % $ 854,847 1.3 % 2025 234 632,008 9.8 % $ 7,160,770 10.5 % 2026 327 1,178,991 18.4 % $ 11,663,548 17.1 % 2027 460 1,462,512 22.8 % $ 15,444,195 22.8 % 2028 208 857,213 13.4 % $ 10,491,028 15.4 % 2029 152 606,954 9.5 % $ 7,687,053 11.3 % 2030 162 1,008,281 15.7 % $ 6,660,686 9.8 % 2031 26 78,766 1.2 % $ 839,861 1.2 % 2032 2 9,354 0.1 % $ 140,000 0.2 % 2033 1 7,512 0.1 % $ 130,742 0.2 % 2034 115 384,418 6.0 % $ 6,617,743 9.7 % 2035 9 26,564 0.4 % $ 358,890 0.5 % Totals 1,705 6,419,287 100.0 % $ 68,049,363 100.0 % Explanatory Notes : (1) Annualized contractual rent in effect on December 31, 2024 for all of our leases (including those accounted for as direct financing leases).
Removed
(3) Includes a property for which we received notice in August 2023 from the USPS to terminate the lease for such property, which termination became effective in February 2024.

Item 3. Legal Proceedings

Legal Proceedings — active lawsuits and investigations

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Biggest changeITEM 4. MINE SAFETY DISCLOSURES Not Applicable. 36 Table of Contents PART II
Biggest changeITEM 4. MINE SAFETY DISCLOSURES Not Applicable. 37 Table of Contents PART II

Item 5. Market for Registrant's Common Equity

Market for Common Equity — stock, dividends, buybacks

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Biggest changeITEM 5. MARKET FOR REGISTRANT’S COMMON EQUITY, RELATED STOCKHOLDER MATTERS AND ISSUER PURCHASES OF EQUITY SECURITIES Market Information Our Class A common stock trades on the New York Stock Exchange under the symbol “PSTL”. As of February 29, 2024, there were 22,511,828 shares of Class A common stock issued and outstanding and four stockholders of record.
Biggest changeITEM 5. MARKET FOR REGISTRANT’S COMMON EQUITY, RELATED STOCKHOLDER MATTERS AND ISSUER PURCHASES OF EQUITY SECURITIES Market Information Our Class A common stock trades on the New York Stock Exchange under the symbol “PSTL”. As of February 26, 2025, there were 23,556,545 shares of Class A common stock issued and outstanding and five stockholders of record.
Securities Authorized for Issuance Under Equity Compensation Plans The information required by Item 5 is incorporated by reference to our Definitive Proxy Statement for our 2024 annual stockholders’ meeting. ITEM 6. RESERVED
Securities Authorized for Issuance Under Equity Compensation Plans The information required by Item 5 is incorporated by reference to our Definitive Proxy Statement for our 2025 annual stockholders’ meeting. ITEM 6. RESERVED
In addition, as of February 29, 2024, there were 27,206 shares of Voting Equivalency stock issued and outstanding and 5,581,207 OP Units and LTIP units held by limited partners other than the Company outstanding. All shares of Voting Equivalency stock issued and outstanding are held by Mr. Spodek and his affiliates.
In addition, as of February 26, 2025, there were 27,206 shares of Voting Equivalency stock issued and outstanding and 6,685,791 OP Units and LTIP units held by limited partners other than the Company outstanding. All shares of Voting Equivalency stock issued and outstanding are held by Mr. Spodek and his affiliates.

Item 7. Management's Discussion & Analysis

Management's Discussion & Analysis (MD&A) — revenue / margin commentary

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Biggest change"Risk Factors—Risks Related to the USPS". 40 Table of Contents Results of Operations Comparison of the years ended December 31, 2023 and December 31, 2022 (Amounts in thousands) For the Year Ended December 31, 2023 2022 $ Change % Change Revenues Rental income $ 60,970 $ 50,876 $ 10,094 19.8 % Fee and other 2,742 2,454 288 11.7 % Total revenues 63,712 53,330 10,382 19.5 % Operating expenses Real estate taxes 8,549 7,168 1,381 19.3 % Property operating expenses 6,825 5,625 1,200 21.3 % General and administrative 14,654 13,110 1,544 11.8 % Depreciation and amortization 19,688 17,727 1,961 11.1 % Total operating expenses 49,716 43,630 6,086 13.9 % Income from operations 13,996 9,700 4,296 44.3 % Other income 679 1,029 (350) (34.0) % Interest expense, net Contractual interest expense (9,339) (5,378) (3,961) 73.7 % Write-off and amortization of deferred financing fees (686) (596) (90) 15.1 % Interest income 5 1 4 400.0 % Total interest expense, net (10,020) (5,973) (4,047) 67.8 % Income before income tax expense 4,655 4,756 (101) (2.1) % Income tax expense (72) (12) (60) 500.0 % Net income $ 4,583 $ 4,744 $ (161) (3.4) % Revenues Rental income – Rental income includes net rental income as well as the recovery of certain operating costs and property taxes from tenants.
Biggest change"Risk Factors—Risks Related to the USPS". 41 Table of Contents Results of Operations Comparison of the years ended December 31, 2024 and December 31, 2023 (Amounts in thousands) For the Year Ended December 31, 2024 2023 $ Change % Change Revenues Rental income $ 73,143 $ 60,970 $ 12,173 20.0 % Fee and other 3,229 2,742 487 17.8 % Total revenues 76,372 63,712 12,660 19.9 % Operating expenses Real estate taxes 9,850 8,549 1,301 15.2 % Property operating expenses 9,124 6,825 2,299 33.7 % General and administrative 16,008 14,654 1,354 9.2 % Casualty and impairment losses, net 404 — 404 N/A Depreciation and amortization 22,202 19,688 2,514 12.8 % Total operating expenses 57,588 49,716 7,872 15.8 % Gain on sale of real estate assets 2,393 — 2,393 N/A Income from operations 21,177 13,996 7,181 51.3 % Other income 21 679 (658) (96.9) % Interest expense, net Contractual interest expense (12,041) (9,339) (2,702) 28.9 % Write-off and amortization of deferred financing fees (746) (686) (60) 8.7 % Interest income 26 5 21 420.0 % Total interest expense, net (12,761) (10,020) (2,741) 27.4 % Income before income tax expense 8,437 4,655 3,782 81.2 % Income tax expense (116) (72) (44) 61.1 % Net income $ 8,321 $ 4,583 $ 3,738 81.6 % Revenues Rental income – Rental income includes net rental income as well as the recovery of certain operating costs and property taxes from tenants.
Our Board of Directors oversees our business and affairs. 37 Table of Contents ATM Program On November 4, 2022, we entered into separate open market sale agreements with each of Jefferies LLC, BMO Capital Markets Corp., Janney Montgomery Scott LLC, Stifel, Nicolaus & Company, Incorporated and Truist Securities, Inc. as agents, pursuant to which we may offer and sell, from time to time, shares of our Class A common stock having an aggregate sales price of up to $50.0 million.
Our Board of Directors oversees our business and affairs. 38 Table of Contents ATM Program On November 4, 2022, we entered into separate open market sale agreements with each of Jefferies LLC, BMO Capital Markets Corp., Janney Montgomery Scott LLC, Stifel, Nicolaus & Company, Incorporated and Truist Securities, Inc. as agents, pursuant to which we may offer and sell, from time to time, shares of our Class A common stock having an aggregate sales price of up to $50.0 million.
During the years ended December 31, 2023 and 2022, we incurred $0.3 million and $0.3 million, respectively, of unused facility fees related to the Revolving Credit Facility. (2) Based upon the one-month Adjusted Term SOFR, which is SOFR plus a term SOFR adjustment of 0.10%, subject to a 0% floor (the “Adjusted Term SOFR”).
During the years ended December 31, 2024 and 2023, we incurred $0.3 million and $0.3 million, respectively, of unused facility fees related to the Revolving Credit Facility. (2) Based upon the one-month Adjusted Term SOFR, which is SOFR plus a term SOFR adjustment of 0.10%, subject to a 0% floor (the “Adjusted Term SOFR”).
ITEM 7. MANAGEMENT’S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS OF OPERATIONS The following discussion and analysis is based on, and should be read in conjunction with, the Consolidated Financial Statements and the related notes thereto of the Company as of and for the years ended December 31, 2023 and 2022.
ITEM 7. MANAGEMENT’S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS OF OPERATIONS The following discussion and analysis is based on, and should be read in conjunction with, the Consolidated Financial Statements and the related notes thereto of the Company as of and for the years ended December 31, 2024 and 2023.
Cash flows from investing activities – Net cash used in investing activities of $72.6 million for the year ended December 31, 2023 primarily consisted of $73.1 million of acquisitions and capital improvements offset by $0.7 million of insurance proceeds that were received.
Net cash used in investing activities of $72.6 million for the year ended December 31, 2023 primarily consisted of $73.1 million of acquisitions and capital improvements offset by $0.7 million of insurance proceeds that were received.
Fee and other - Fee and other revenue increased by $0.3 million to $2.7 million for the year ended December 31, 2023 from $2.5 million for the year ended December 31, 2022, primarily due to an increase in income received from advisory services and management fees.
Fee and other - Fee and other revenue increased by $0.5 million to $3.2 million for the year ended December 31, 2024 from $2.7 million for the year ended December 31, 2023, primarily due to an increase in income received from advisory services and management fees.
The loan has a fixed interest rate of 3.625% for the first five years (ending in August 2026), then adjusting annually thereafter to a variable annual rate of Wall Street Journal Prime Rate with a minimum annual rate of 3.625%. 44 Table of Contents (5) The loan is collateralized by first mortgage liens on one property and a personal guarantee of payment by Mr.
The loan has a fixed interest rate of 3.625% for the first five years (ending in August 2026), then adjusting annually thereafter to a variable annual rate of Wall Street Journal Prime Rate with a minimum annual rate of 3.625%. (5) The loan is collateralized by first mortgage liens on one property and a personal guarantee of payment by Mr.
Contractual Obligations and Other Long-Term Liabilities The following table provides information with respect to our commitments as of December 31, 2023, including any guaranteed or minimum commitments under contractual obligations (in thousands).
Contractual Obligations and Other Long-Term Liabilities The following table provides information with respect to our commitments as of December 31, 2024, including any guaranteed or minimum commitments under contractual obligations (in thousands).
The USPS is currently facing a variety of circumstances that are threatening its ability to fund its operations and other obligations as currently conducted without 38 Table of Contents intervention by the federal government. The USPS is constrained by laws and regulations that restrict revenue sources and pricing, mandate certain expenses and cap its borrowing capacity.
The USPS is currently facing a variety of circumstances that are threatening its ability to fund its operations and other obligations as currently conducted without intervention by the federal government. The USPS is constrained by laws and regulations that restrict revenue sources and pricing, mandate certain expenses and cap its borrowing capacity.
All real estate acquisitions in the periods presented qualified as asset acquisitions and, as such, acquisition-related fees and acquisition-related expenses related to these asset acquisitions are capitalized as part of the acquisition. Investments in real estate generally include land, buildings, tenant improvements and identified intangible assets, such as in-place lease intangibles and above or below-market lease intangibles.
All real estate acquisitions in the periods presented qualified as asset acquisitions and, as such, acquisition-related fees and acquisition-related expenses related to these asset acquisitions are capitalized as part of the acquisition. 47 Table of Contents Investments in real estate generally include land, buildings, tenant improvements and identified intangible assets, such as in-place lease intangibles and above or below-market lease intangibles.
Our long-term liquidity requirements primarily consist of funds necessary for the repayment of debt at maturity, distributions to our limited partners and distributions to our stockholders required to qualify for REIT status, property acquisitions and non-recurring capital improvements.
Our long-term liquidity requirements primarily consist of funds necessary for the repayment of debt at maturity, distributions to our limited partners and distributions to our stockholders required to qualify for REIT status, property 44 Table of Contents acquisitions and non-recurring capital improvements.
Dividends To maintain our qualification as a REIT, we are required to pay dividends to stockholders at least equal to 90% of our REIT taxable income determined without regard to the deduction for dividends paid and excluding net capital gains. During the year ended December 31, 2023, we paid cash dividends of $0.95 per share.
Dividends To maintain our qualification as a REIT, we are required to pay dividends to stockholders at least equal to 90% of our REIT taxable income determined without regard to the deduction for dividends paid and excluding net capital gains. During the year ended December 31, 2024, we paid cash dividends of $0.96 per share.
Upon our achievement of certain sustainability targets for 2022, the applicable margins for the Credit Facilities were reduced by 0.02% for the year ended December 31, 2023, which is reflected in the margins noted in the table above. (3) Five properties are collateralized under this loan and Mr.
Upon our achievement of certain sustainability targets for 2023, the applicable 45 Table of Contents margins for the Credit Facilities were reduced by 0.02% for the year ended December 31, 2024, which is reflected in the margins noted in the table above. (3) Five properties are collateralized under this loan and Mr.
We are also a “smaller reporting company” as defined in Regulation S-K under the Securities Act and have elected to take advantage of certain scaled disclosures available to smaller reporting companies.
Registrant Elections We are a “smaller reporting company” as defined in Regulation S-K under the Securities Act and have elected to take advantage of certain scaled disclosures available to smaller reporting companies.
This initial net investment is determined by aggregating the total future minimum lease payments attributable to the direct financing 46 Table of Contents lease and the estimated residual value of the property, if any, less unearned income.
This initial net investment is determined by aggregating the total future minimum lease payments attributable to the direct financing lease and the estimated residual value of the property, if any, less unearned income.
The lingering effect of the COVID-19 pandemic and other geopolitical and economic factors have also created significant inflationary pressures resulting in higher compensation, benefits, transportation and fuel costs for the USPS.
The lingering effect of the COVID-19 pandemic and other geopolitical and economic factors have also created significant inflationary pressures resulting in higher compensation, benefits, transportation and fuel costs for 39 Table of Contents the USPS.
As of December 31, 2023, we were in compliance with all of the Credit Facilities’ debt covenants.
As of December 31, 2024, we were in compliance with all of the Credit Facilities’ debt covenants.
As of December 31, 2023, we had seven interest rate swaps with a total notional amount of $200.0 million that are used to manage our interest rate risk and fix the SOFR component on the Term Loans of the Credit Facilities (together, the "Interest Rate Swaps"). See Note 6.
As of December 31, 2024, we had nine interest rate swaps with a total notional amount of $250.0 million that are used to manage our interest rate risk and fix the SOFR component on the Term Loans of the Credit Facilities (together, the "Interest Rate Swaps"). See Note 6.
The following table sets forth information as of December 31, 2023 and 2022 with respect to our outstanding indebtedness (in thousands): Amount Outstanding as of December 31, 2023 Amount Outstanding as of December 31, 2022 Interest Rate as of December 31, 2023 Maturity Date Revolving Credit Facility (1) : Revolving Credit Facility $ 9,000 $ — SOFR+148 bps (2) January 2026 2021 Term Loan 75,000 50,000 SOFR+143 bps (2) January 2027 2022 Term Loan 125,000 115,000 SOFR+143 bps (2) February 2028 Secured Borrowings: Vision Bank (3) 1,409 1,409 3.69 % September 2041 First Oklahoma Bank (4) 316 333 3.63 % December 2037 Vision Bank – 2018 (5) 844 844 3.69 % September 2041 Seller Financing (6) 194 282 6.00 % January 2025 AIG – December 2020 (7) 30,225 30,225 2.80 % January 2031 Total Principal $ 241,988 $ 198,093 Explanatory Notes: (1) See above under "—Revolving Credit Facility and Term Loans" for details regarding the Credit Facilities.
The following table sets forth information as of December 31, 2024 and 2023 with respect to our outstanding indebtedness (in thousands): Amount Outstanding as of December 31, 2024 Amount Outstanding as of December 31, 2023 Interest Rate as of December 31, 2024 Maturity Date Revolving Credit Facility (1) : Revolving Credit Facility $ 14,000 $ 9,000 SOFR+148 bps (2) January 2026 2021 Term Loan 75,000 75,000 SOFR+143 bps (2) January 2027 2022 Term Loan 175,000 125,000 SOFR+143 bps (2) February 2028 Secured Borrowings: Vision Bank (3) 1,409 1,409 3.69 % September 2041 First Oklahoma Bank (4) 299 316 3.63 % December 2037 Vision Bank – 2018 (5) 844 844 3.69 % September 2041 Seller Financing (6) 100 194 6.00 % January 2025 AIG (7) 30,225 30,225 2.80 % January 2031 Seller Financing - 2024 (8) 1,400 — 5.00 % September 2039 Total Principal $ 298,277 $ 241,988 Explanatory Notes: (1) See above under "—Revolving Credit Facility and Term Loans" for details regarding the Credit Facilities.
The Credit Facilities include an accordion feature which permit us to borrow up to an additional $150.0 million under the Revolving Credit Facility subject to customary terms and conditions.
The Credit Facilities include an accordion feature which permit us to borrow up to an additional (i) $150.0 million under the Revolving Credit Facility and (ii) $50.0 million under the Term Loans, subject to customary terms and conditions.
Direct and certain indirect costs clearly associated with the development, construction, leasing or expansion of real estate assets are capitalized as a cost of the property. Repairs and maintenance costs are expensed as incurred. We acquired 223 properties for approximately $78 million, excluding closing costs, during 2023 and 320 properties for approximately $123 million, excluding closing costs, during 2022.
Direct and certain indirect costs clearly associated with the development, construction, leasing or expansion of real estate assets are capitalized as a cost of the property. Repairs and maintenance costs are expensed as incurred. We acquired 197 properties for approximately $90.8 million, excluding closing costs, during 2024 and 223 properties for approximately $78.0 million, excluding closing costs, during 2023.
Cash Flows Comparison of the year ended December 31, 2023 and the year ended December 31, 2022 We had $2.2 million of cash and $0.6 million of escrows and reserves as of December 31, 2023 compared to $1.5 million of cash and $0.5 million of escrows and reserves as of December 31, 2022.
Cash Flows Comparison of the year ended December 31, 2024 and the year ended December 31, 2023 We had $1.8 million of cash and $0.7 million of escrows and reserves as of December 31, 2024 compared to $2.2 million of cash and $0.6 million of escrows and reserves as of December 31, 2023.
Other income decreased by $0.4 million to $0.7 million for the year ended December 31, 2023 from $1.0 million for the year ended December 31, 2022, primarily due to lower insurance recoveries from claims.
Other income decreased by $0.7 million to $0.02 million for the year ended December 31, 2024 from $0.7 million for the year ended December 31, 2023, primarily due to lower insurance recoveries from claims.
As of December 31, 2023, properties leased to our tenants had an average remaining lease term of approximately three years.
As of December 31, 2024, properties leased to our tenants had an average remaining lease term of approximately four years.
Cash flows from financing activities – Net cash provided by financing activities decreased by $45.6 million to $45.0 million for the year ended December 31, 2023 compared to $90.6 million for the year ended December 31, 2022.
Cash flows from financing activities – Net cash provided by financing activities decreased by $(0.3) million to $45.3 million for the year ended December 31, 2024 compared to $45.0 million for the year ended December 31, 2023.
Total Interest Expense, Net During the year ended December 31, 2023, we incurred total interest expense, net of $10.0 million compared to $6.0 million for the year ended December 31, 2022. The increase in interest expense of $4.0 million was primarily due to additional borrowings under the Credit Facilities and increased interest rates.
Total Interest Expense, Net During the year ended December 31, 2024, we incurred total interest expense, net of $12.8 million compared to $10.0 million for the year ended December 31, 2023. The increase in interest expense of $2.7 million was primarily due to additional borrowings under the Credit Facilities and increased interest rates.
Property management expenses are included within property operating expenses and increased by $0.4 million to $2.5 million for the year ended December 31, 2023 from $2.1 million for the year ended December 31, 2022.
Property management expenses are included within property operating expenses and increased by $0.3 million to $2.8 million for the year ended December 31, 2024 from $2.5 million for the year ended December 31, 2023.
The increase is primarily due to the volume of our acquisitions, all of which have generated additional rental income and related changes in working capital.
The increase is due to the volume of our acquisitions and the execution of new leases with rental escalations, all of which have generated additional rental income and related changes in working capital.
As of December 31, 2023, we had $209.0 million of aggregate principal amount outstanding under our Credit Facilities, with $75.0 million drawn on the 2021 Term Loan, $115.0 million drawn on the 2022 Term Loan and $9.0 million drawn on the Revolving Credit Facility.
As of December 31, 2024, we had $264.0 million of aggregate principal amount outstanding under our Credit Facilities, with $75.0 million drawn on the 2021 Term Loan, $175.0 million drawn on the 2022 Term Loan and $14.0 million drawn on the Revolving Credit Facility.
Secured Borrowings as of December 31, 2023 As of December 31, 2023, we had approximately $33.0 million of secured borrowings outstanding, all of which are currently fixed-rate debt with a weighted average interest rate of 2.89% per annum.
Secured Borrowings as of December 31, 2024 As of December 31, 2024, we had approximately $34.3 million of secured borrowings outstanding, all of which are currently fixed-rate debt with a weighted average interest rate of 2.96% per annum.
Lease Renewal As of February 29, 2024, the leases at 91 of our properties, representing approximately 631,000 net leasable interior square feet, had expired and the USPS was occupying such properties as a holdover tenant. See Item 2. "Properties—Lease Expiration Schedule”.
Lease Renewal As of February 26, 2025, the leases at seven of our properties, representing approximately 28,258 net leasable interior square feet, had expired and the USPS was occupying such properties as a holdover tenant. See Item 2. "Properties—Lease Expiration Schedule”.
We are the sole general partner of our Operating Partnership through which our properties are directly or indirectly owned. As of February 29, 2024, we owned approximately 80.3% of our outstanding OP Units, including LTIP Units.
We are the sole general partner of our Operating Partnership through which our properties are directly or indirectly owned. As of February 26, 2025, we owned approximately 78.0% of our outstanding OP Units, including LTIP Units.
Rental income increased by $10.1 million to $61.0 million for the year ended December 31, 2023 from $50.9 million for the year ended December 31, 2022, primarily due to the volume of our acquisitions.
Rental income increased by $12.2 million to $73.1 million for the year ended December 31, 2024 from $61.0 million for the year ended December 31, 2023, primarily due to the volume of our acquisitions.
For the year ended December 31, 2023, we acquired 223 properties leased to the USPS for approximately $78 million, excluding closing costs. As of December 31, 2023, our portfolio consists of 1,509 owned properties, located in 49 states and one territory and comprising approximately 5.9 million net leasable interior square feet.
For the year ended December 31, 2024, we acquired 197 properties leased to the USPS for approximately $90.8 million, excluding closing costs. As of December 31, 2024, our portfolio consists of 1,703 owned properties, located in 49 states and one territory and comprising approximately 6.4 million net leasable interior square feet.
The remainder of the increase of $0.9 million is related to expenses for repairs and maintenance and insurance, which increase is primarily due to the volume of our acquisitions. 41 Table of Contents General and administrative – General and administrative expenses increased by $1.5 million to $14.7 million for the year ended December 31, 2023 from $13.1 million for the year ended December 31, 2022, primarily due to expanding our staff, an increase in information technology related costs as a result of our continued growth and an increase in equity-based compensation expense related to awards that have been granted to our employees throughout 2022 and 2023.
General and administrative – General and administrative expenses increased by $1.4 million to $16.0 million for the year ended December 31, 2024 from $14.7 million for the year ended December 31, 2023, primarily due to expanding our staff, an increase in information technology related costs as a result of our continued growth and an increase in equity-based compensation expense related to awards that have been granted to our employees throughout 2023 and 2024.
Operating Expenses Real estate taxes – Real estate taxes increased by $1.4 million to $8.5 million for the year ended December 31, 2023 from $7.2 million for the year ended December 31, 2022, primarily due to the volume of our acquisitions.
Operating Expenses Real estate taxes – Real estate taxes increased by $1.3 million to $9.9 million for the year ended December 31, 2024 from $8.5 million for the year ended December 31, 2023, primarily due to the volume of our acquisitions. 42 Table of Contents Property operating expenses – Property operating expenses increased by $2.3 million to $9.1 million for the year ended December 31, 2024 from $6.8 million for the year ended December 31, 2023.
Cash flows from operating activities – Net cash provided by operating activities increased by $3.8 million to $28.4 million for the year ended December 31, 2023 compared to $24.6 million for the year ended December 31, 2022.
Cash flows from operating activities – Net cash provided by operating activities increased by $5.1 million to $33.5 million for the year ended December 31, 2024 compared to $28.4 million for the year ended December 31, 2023.
Consolidated Indebtedness As of December 31, 2023, we had approximately $242.0 million of outstanding consolidated principal indebtedness.
Consolidated Indebtedness As of December 31, 2024, we had approximately $298.3 million of outstanding consolidated principal indebtedness.
Equity-Based Compensation Expense All equity-based compensation expense is recognized in our Consolidated Statements of Operations and Comprehensive Income as components of general and administrative expense and property operating expenses. We issue share-based awards to align our directors’ and employees’ interests with those of our investors.
Equity-Based Compensation Expense All equity-based compensation expense is recognized in our Consolidated Statements of Operations and Comprehensive Income as components of general and administrative expense and property operating expenses.
In addition, we continuously evaluate possible acquisitions of postal properties, which largely depend on, among other 43 Table of Contents things, the market for owning and leasing postal properties and the terms on which the USPS will enter into new or renewed leases.
The success of our business strategy will depend, to a significant degree, on our ability to access these various capital sources. In addition, we continuously evaluate possible acquisitions of postal properties, which largely depend on, among other things, the market for owning and leasing postal properties and the terms on which the USPS will enter into new or renewed leases.
Costs associated with real estate investments generally will not be materially reduced even if a property is not fully occupied or other circumstances cause our revenues to decrease.
Costs associated with real estate investments generally will not be materially reduced even if a property is not fully occupied or other circumstances cause our revenues to decrease. As a result, if revenues decrease in the future, static operating costs may adversely affect our future cash flow and results of operations.
We may continue to be a smaller reporting company even after we are no longer an “emerging growth company.” We elected to be treated as a REIT under the Code beginning with our short taxable year ended December 31, 2019 and intend to continue to qualify as a REIT.
We have also elected to be treated as a REIT under the Code beginning with our short taxable year ended December 31, 2019 and intend to continue to qualify as a REIT.
Depreciation and amortization – Depreciation and amortization expense increased by $2.0 million to $19.7 million for the year ended December 31, 2023 from $17.7 million for the year ended December 31, 2022, primarily due to the volume of our acquisitions. Other Income Other income primarily includes insurance recoveries related to property damage claims.
Depreciation and amortization – Depreciation and amortization expense increased by $2.5 million to $22.2 million for the year ended December 31, 2024 from $19.7 million for the year ended December 31, 2023, primarily due to the volume of our acquisitions.
We intend to use the Credit Facilities for working capital purposes, which may include repayment of mortgage indebtedness, property acquisitions and other general corporate purposes. We amortize on a non-cash basis the deferred financing costs associated with our debt to interest expense using the straight-line method, which approximates the effective interest rate method over the terms of the related loans.
We amortize on a non-cash basis the deferred financing costs associated with our debt to interest expense using the straight-line method, which approximates the effective interest rate method over the terms of the related loans.
On July 24, 42 Table of Contents 2023, we entered into the Second Amendment and further exercised $35.0 million of accordion under the Term Loans.
On July 24, 2023, we entered into the Second Amendment and further exercised $35.0 million of accordion under the Term Loans. On October 25, 2024, we entered into the Third Amendment and increased our commitments on the 2022 Term Loan and further exercised $50.0 million.
Net cash used in investing activities of $120.1 million for the year ended December 31, 2022 primarily consisted of $119.9 million of acquisitions and capital improvements offset by $0.8 million of insurance proceeds that were received.
Cash flows from investing activities – Net cash used in investing activities of $79.1 million for the year ended December 31, 2024 primarily consisted of $84.8 million of acquisitions and capital improvements offset by $6.0 million in proceeds received from the sale of real estate assets.
As of the date of this report, we had $211.0 million drawn on the Credit Facilities, with $75.0 million drawn on the 2021 Term Loan, $125.0 million drawn on the 2022 Term Loan and $11.0 million drawn on the Revolving Credit Facility. 45 Table of Contents 2024 Real Estate Acquisitions Subsequent to December 31, 2023, we have acquired eight properties in individual or small portfolio transactions for approximately $4.5 million, excluding closing costs.
Subsequent Events 2025 Financing Activity As of the date of this report, we had $26.0 million drawn on the Revolving Credit Facility. 2025 Real Estate Transactions Subsequent to December 31, 2024, we have acquired 18 properties in individual or small portfolio transactions for approximately $8.4 million, excluding closing costs.
Indebtedness and Interest Expense On August 9, 2021, we entered into a $150.0 million senior unsecured revolving credit facility (the "Revolving Credit Facility") and a $50.0 million senior unsecured term loan facility (the "2021 Term Loan").
We issue share-based awards to align our directors’ and employees’ interests with those of our investors. 40 Table of Contents Indebtedness and Interest Expense On August 9, 2021, we entered into a $150.0 million senior unsecured revolving credit facility (the "Revolving Credit Facility") and a $50.0 million senior unsecured term loan facility (the "2021 Term Loan").
As a result, if revenues decrease in the future, static operating costs may adversely affect our future cash flow and results of operations. 39 Table of Contents General and Administrative Expense General and administrative expense represents personnel costs, professional fees, legal fees, insurance, consulting fees, information technology costs and other expenses related to our day-to-day activities of being a public company.
General and Administrative Expense General and administrative expense represents personnel costs, professional fees, legal fees, insurance, consulting fees, information technology costs and other expenses related to our day-to-day activities of being a public company.
The decrease was primarily related to an increase in payments of dividends and distributions and a decrease in net proceeds received from term loans and the Revolving Credit Facility during the year ended December 31, 2023, partially offset by an increase in net proceeds from issuance of shares and lower amount of repayments under the Revolving Credit Facility during the year ended December 31, 2023.
The decrease was primarily related to an increase in payments of dividends and distributions and a decrease in net proceeds from issuance of shares partially offset by an increase in borrowings from term loans and the Revolving Credit Facility during the year ended December 31, 2024. 43 Table of Contents Liquidity and Capital Resources We had approximately $1.8 million of cash and $0.7 million of escrows and reserves as of December 31, 2024.
Payments Due by Period Contractual Obligations Total 2024 2025 to 2026 2027 to 2028 More than five years Credit Facilities $ 209,000 $ — $ 9,000 $ 200,000 $ — Principal payments on mortgage loans 32,988 112 754 1,579 30,543 Interest payments (1) 41,999 10,443 20,038 8,811 2,707 Operating lease obligations (2) 2,032 162 162 90 1,618 Total $ 286,019 $ 10,717 $ 29,954 $ 210,480 $ 34,868 Explanatory Notes : (1) The amounts shown relate to (i) the Revolving Credit Facility based on the outstanding balance and interest rate in effect as of December 31, 2023 and assuming an unused facility fee under the Revolving Credit Facility through the remainder of the term based on such outstanding balance, (ii) the Term Loans based on the interest rate fixed through the Interest Rate Swaps and outstanding balance as of December 31, 2023 and (iii) the mortgage loans based on the outstanding balance and, for mortgage loans with interest rates adjustable after a certain period, interest rate in effect as of December 31, 2023 with respect to their future interest payments.
Payments Due by Period Contractual Obligations Total 2025 2026 to 2027 2028 to 2029 More than five years Credit Facilities $ 264,000 $ — $ 89,000 $ 175,000 $ — Principal payments on mortgage loans 34,277 118 1,409 1,628 31,122 Interest payments (1) 41,317 13,403 22,332 3,054 2,528 Operating lease obligations (2) 3,628 325 643 643 2,017 Total $ 343,222 $ 13,846 $ 113,384 $ 180,325 $ 35,667 Explanatory Notes : (1) The amounts shown relate to (i) the Revolving Credit Facility based on the outstanding balance and interest rate in effect as of December 31, 2024 and assuming an unused facility fee under the Revolving Credit Facility through the remainder of the term based on such outstanding balance, (ii) the Term Loans based on the interest rate fixed through the Interest Rate Swaps and outstanding balance as of December 31, 2024 and (iii) the mortgage loans based on the outstanding balance and, for mortgage loans with interest rates adjustable after a certain period, interest rate in effect as of December 31, 2024 with respect to their future interest payments. 46 Table of Contents (2) Operating lease obligations relate to three leases for our corporate headquarters and 10 ground leases at certain of our properties.
Inflation Because most of our leases provide for fixed annual rental payments without annual rent escalations, our rental revenues are fixed while our property operating expenses are subject to inflationary increases. A majority of our leases provide for tenant reimbursement of real estate taxes and thus the tenant must reimburse us for real estate taxes.
Summary of Significant Accountant Policies in the Notes to the Consolidated Financial Statements. 48 Table of Contents Inflation Because most of our leases provide for fixed annual rental payments without annual rent escalations, our rental revenues are fixed while our property operating expenses are subject to inflationary increases.
Executive Overview We are an internally managed REIT with a focus on acquiring and managing properties leased primarily to the USPS, ranging from last-mile post offices to industrial facilities. We believe the overall opportunity for consolidation that exists within the postal logistics network is very attractive.
As of December 31, 2024, we had approximately $93.7 million of availability remaining under the ATM Program. Executive Overview We are an internally managed REIT with a focus on acquiring and managing properties leased primarily to the USPS, ranging from last-mile post offices to industrial facilities.
We believe that if inflation increases expenses over time, increases in lease renewal rates will materially offset such increase.
A majority of our leases provide for tenant reimbursement of real estate taxes and thus the tenant must reimburse us for real estate taxes. We believe that if inflation increases expenses over time, increases in lease renewal rates will materially offset such increase.
We continue to execute our strategy to acquire and consolidate postal properties that we believe will generate strong earnings for our shareholders. Geographic Concentration As of December 31, 2023, we owned a portfolio of 1,509 properties located in 49 states and one territory and leased primarily to the USPS.
Geographic Concentration As of December 31, 2024, we owned a portfolio of 1,703 properties located in 49 states and one territory and leased primarily to the USPS. For the year ended December 31, 2024, approximately 11.9% of our total rental income was concentrated in Pennsylvania.
Dividends Our Board of Directors approved and, on February 2, 2024, we declared a fourth quarter 2023 common stock dividend of $0.24 per share which was paid on February 29, 2024 to stockholders of record on February 16, 2024.
Subsequent to December 31, 2024, we sold one vacant property for a total sales price of approximately $0.8 million. Dividends Our Board of Directors approved and, on January 30, 2025, we declared a fourth quarter 2024 common stock dividend of $0.2425 per share which is payable on February 28, 2025 to stockholders of record on February 14, 2025.
On August 8, 2023, we amended the ATM Program to increase the aggregate offering amount under the program from up to $50.0 million to up to $150.0 million. The agreements also provide that we may enter into one or more forward sale agreements under separate master forward confirmations and related supplemental confirmations with affiliates of certain agents.
The agreements also provide that we may enter into one or more forward sale agreements under separate master forward confirmations and related supplemental confirmations with affiliates of certain agents. During the year ended December 31, 2024, 1,420,791 shares were issued under the ATM Program, raising approximately $20.4 million in gross proceeds.
Removed
During the year ended December 31, 2023, 1,861,407 shares were issued under the ATM Program, raising approximately $27.8 million in gross proceeds. As of December 31, 2023, we had approximately $114.1 million of availability remaining under the ATM Program.
Added
On August 8, 2023, we amended the ATM Program to increase the aggregate offering amount under the program from up to $50.0 million to up to $150.0 million. On November 4, 2024, we entered into separate open market sales agreements with each of Mizuho Securities USA LLC (“Mizuho”) and M&T Securities, Inc.
Removed
For the year ended December 31, 2023, approximately 13.2% of our total rental income was concentrated in Pennsylvania.
Added
(“M&T”), as additional sales agents, Mizuho Markets Americas LLC, as additional forward purchaser, and Mizuho, as additional forward seller (in its capacity as agent for its affiliated forward purchaser).
Removed
Emerging Growth Company We are an “emerging growth company,” as defined in the Jumpstart Our Business Startups Act of 2012 (the "JOBS Act"), and we are eligible to take advantage of certain exemptions from various reporting requirements that are applicable to other public companies that are not “emerging growth companies,” including not being required to comply with the auditor attestation requirements of Section 404 of the Sarbanes-Oxley Act of 2002, reduced disclosure obligations regarding executive compensation in our periodic reports and proxy statements and exemptions from the requirements of holding a nonbinding advisory vote on executive compensation and shareholder approval of any golden parachute payments not previously approved.
Added
On November 4, 2024, we also amended the existing open market sale agreements to reflect the addition of Mizuho and M&T as sales agents, Mizuho Markets Americas LLC as forward purchaser and Mizuho as forward seller.
Removed
In addition, the JOBS Act also provides that an “emerging growth company” can take advantage of the extended transition period provided in the Securities Act of 1933, as amended (the “Securities Act”), for complying with new or revised accounting standards.
Added
We believe the overall opportunity for consolidation that exists within the postal logistics network is very attractive. We continue to execute our strategy to acquire and consolidate postal properties that we believe will generate strong earnings for our shareholders.
Removed
We have availed ourselves of these exemptions; although, subject to certain restrictions, we may elect to stop availing ourselves of these exemptions in the future even while we remain an “emerging growth company.” We will remain an “emerging growth company” until the earliest to occur of (i) the last day of the fiscal year during which our total annual revenue equals or exceeds $1.235 billion (subject to periodic adjustment for inflation), (ii) the last day of the fiscal year following the fifth anniversary of our IPO, (iii) the date on which we have, during the previous three-year period, issued more than $1.0 billion in non-convertible debt or (iv) the date on which we are deemed to be a “large accelerated filer” under the Exchange Act.
Added
On October 25, 2024, we amended the Credit Facilities (the "Third Amendment") to, among other things, replace the Bank of Montreal with Truist Bank as the administrative agent, letter of credit issuer and swingline lender.
Removed
Property operating expenses – Property operating expenses increased by $1.2 million to $6.8 million for the year ended December 31, 2023 from $5.6 million for the year ended December 31, 2022.
Added
In addition, the third amendment increases the 2022 Term Loan commitments in an aggregate principal amount of up to $50.0 million in which we further exercised $40.0 million under the 2022 Term Loan on the closing date of the transaction, and on a delayed-draw basis, $10.0 million.
Removed
Liquidity and Capital Resources We had approximately $2.2 million of cash and $0.6 million of escrows and reserves as of December 31, 2023.
Added
On November 21, 2024, we further exercised the remaining $10.0 million under the 2022 Term Loan. We intend to use the Credit Facilities for working capital purposes, which may include repayment of mortgage indebtedness, property acquisitions and other general corporate purposes.
Removed
The success of our business strategy will depend, to a significant degree, on our ability to access these various capital sources.
Added
The remainder of the increase of $2.0 million is related to expenses for repairs and maintenance and insurance, which increase is primarily due to the volume of our acquisitions.
Removed
(2) Operating lease obligations relate to three leases for our corporate headquarters and eight ground leases at certain of our properties.
Added
Casualty and impairment losses, net – Casualty and impairment losses, net for the year ended December 31, 2024 was $0.4 million which primarily reflects a casualty loss for an asset damaged as a result of vandalism. No casualty and impairment losses, net occurred for the year ended December 31, 2023.
Removed
Subsequent Events 2024 Financing Activity We had net credit facility activity of $2.0 million during the period subsequent to December 31, 2023.
Added
Gain on sale of real estate assets Gain on sale of real estate assets includes the sale of two properties during the year ended December 31, 2024. No properties were sold during the year ended December 31, 2023. Other Income Other income primarily includes insurance recoveries related to property damage claims.
Removed
As of December 31, 2023 and 2022, no impairment related to our long-lived assets was identified. New Accounting Pronouncements For a discussion of our adoption of new accounting pronouncements, please see Note 2. Summary of Significant Accountant Policies in the Notes to the Consolidated Financial Statements.
Added
(8) In connection with the acquisition of two properties, the Company obtained seller financing secured by the properties in the amount of $1.4 million based on a fixed interest rate of 5.00% with interest-only payments through September 1, 2039.
Added
Share Repurchase Program On February 25, 2025, the Board of Directors authorized the creation of a share repurchase program (the “Share Repurchase Program”) pursuant to which we may repurchase up to $25.0 million of our Class A common stock.

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Item 7A. Quantitative and Qualitative Disclosures About Market Risk

Market Risk — interest-rate, FX, commodity exposure

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Biggest changeOf the $209.0 million variable-rate debt, $200.0 million relates to the Term Loans, which have been fixed through the Interest Rate Swaps. When factoring in the Term Loans as fixed-rate debt through the Interest Rate Swaps, as of December 31, 2023, approximately $9.0 million of our indebtedness was variable-rate debt and approximately $233.0 million was fixed-rate debt.
Biggest changeOf the $264.0 million variable-rate debt, $250.0 million relates to the Term Loans, which have been fixed through the Interest Rate Swaps. When factoring in the Term Loans as fixed-rate debt through the Interest Rate Swaps, as of December 31, 2024, approximately $14.0 million of our indebtedness was variable-rate debt and approximately $284.3 million was fixed-rate debt.
Our objective when undertaking such arrangements will be to reduce our floating rate exposure. However, we provide no assurance that our efforts to manage interest rate volatility will successfully mitigate the risks of such volatility in our portfolio and we do not intend to enter into hedging arrangements for speculative purposes. 47 Table of Contents POSTAL REALTY TRUST, INC.
Our objective when undertaking such arrangements will be to reduce our floating rate exposure. However, we provide no assurance that our efforts to manage interest rate volatility will successfully mitigate the risks of such volatility in our portfolio and we do not intend to enter into hedging arrangements for speculative purposes. 49 Table of Contents POSTAL REALTY TRUST, INC.
Our primary market risk results from our indebtedness, which bears interest at both fixed and variable rates. As of December 31, 2023, our indebtedness was approximately $242.0 million, consisting of approximately $209.0 million of variable-rate debt and approximately $33.0 million of fixed-rate debt.
Our primary market risk results from our indebtedness, which bears interest at both fixed and variable rates. As of December 31, 2024, our indebtedness was approximately $298.3 million, consisting of approximately $264.0 million of variable-rate debt and approximately $34.3 million of fixed-rate debt.

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