POSTAL REALTY TRUST, INC. June 2020 Investor Presentation NYSE: PSTL
Disclaimer & Forward Looking Statements This presentation contains forward‐looking statements within the meaning of the federal securities laws. These statements can be identified by the fact that they do not relate strictly to historical or current facts, and are often indicated by words such as “anticipates,” “estimates,” “expects,” “intends,” “plans,” “believes” and similar expressions or future or conditional verbs such as “will,” “should,” “would,” “may” and “could . ” Forward-looking statements include, among others, statements relating to the Company’s future financial performance, business prospects and strategy, anticipated financial position, liquidity and capital needs and other similar matters. These statements are based on the Company’s current expectations and assumptions about future events, which are inherently subject to uncertainties, risks and changes in circumstances that are difficult to predict. The Company’s actual results may differ materially from those expressed in, or implied by, the forward-looking statements. The Company is providing the information contained herein as of the date of this presentation. Except as required by applicable law, the Company does not plan to update or revise any statements contained herein, whether as a result of any new information, future events, changed circumstances or otherwise. This presentation contains a discussion of financial measures that are not in accordance with generally accepted accounting principles in the United States (“GAAP”) . Non-GAAP financial measures may exclude items that are significant in understanding and assessing the Company’s financial results, and should not be considered in isolation or as an alternative to financial measures in accordance with GAAP. In addition, the Company’s presentation of these non-GAAP financial measures may not be comparable to similarly-titled measures used by other companies. 2
Company Overview 15+ Year Track Record Of Institutionalizing Postal Real Estate Industry #1 Capital deployed into 290+ postal One of nation’s largest managers of $98M properties leased to the USPS (1) properties since IPO 19.4M Site SF portfolio of owned / managed 3.5M SF portfolio of owned / managed commercial property in 49 states commercial property in 49 states Weighted average lease renewal rate U.S. Government independent agency 98% 100% since 2009 (2) tenant 567 403 Properties owned Properties under management C OMPANY H ISTORY Nationwide Postal Management Postal Realty Trust, Inc. PSTL portfolio exceeds 565 founded by Andrew Spodek incorporated in Maryland owned assets 2004 2017 2018 May 2019 May 2020 Jeremy Garber joined PSTL completed $77 million executive team IPO with a portfolio of 271 properties Source: Company Filings 3 Note: As of May 14, 2020 (1) As measured by rental income and square feet under management (2) Includes historical performance of the Company’s predecessor and prior business activities of Andrew Spodek
Investment Highlights HIGH QUALITY, GEOGRAPHICALLY DIVERSE PORTFOLIO OF POSTAL PROPERTIES 1 WITH ATTRACTIVE FUNDAMENTALS FRAGMENTED MARKET OFFERS COMPELLING OPPORTUNITY TO 2 CONSOLIDATE POSTAL PROPERTIES STABLE GOVERNMENT-BACKED TENANT PROVIDES RELIABLE CASH 3 FLOWS 4 CRITICAL INFRASTRUCTURE TO E-COMMERCE AND LAST-MILE DELIVERY 5 MULTIPLE SOURCES OF CAPITAL TO SUPPORT GROWTH EXPERIENCED MANAGEMENT TEAM WITH STRONG ALIGNMENT AND 6 OWNERSHIP OF COMMON EQUITY 4
Attractive Owned Portfolio Fundamentals 1 Geographically Diverse Portfolio P ORTFOLIO B Y % OF A GGREGATE I NTERIOR S Q F T Portfolio Highlights Locations 567 Properties (47 States) Region Sq Ft % Sq Ft Maximum State Rent Concentration West 9.4% (WI) 10% (% annualized rent) Midwest 662,217 38% Total Square Footage 1,762,013 sq ft Midwest Northeast 270,518 15% 38% Weighted Average Rent $9.83 per sq ft South South 646,749 37% Property Type US Postal Properties 37% Occupancy 100.0% West 182,529 10% Northeast 15% Total 1,762,013 100% O VERVIEW OF PSTL’ S O WNED P ORTFOLIO (1) P ORTFOLIO B Y % OF A NNUALIZED G ROSS R ENT (2) Region Rent % Rent West 13% Midwest $5,552,537 32% Midwest 32% Northeast 3,543,535 20% South 5,982,029 35% South 35% West 2,240,526 13% Northeast 20% Total $17,318,627 100% Source: Company Filings 5 Note: As of May 14, 2020 (1) Map locations reflect owned properties only (2) Annualized gross rent is calculated by multiplying (a) the most recent contractual rent by (b) 12 for all Purchased Properties
Stable Tenant With ~98% Retention Rate 1 Upcoming Lease Expirations Provide Organic Growth Opportunity H ISTORIC L EASE R ETENTION R ATE (1) ▪ Historical weighted average lease (1) (2) retention rate of 97.9% since 2009 100.0% ▪ Leases are typically five year 99.4% 99.2% 98.9% terms 98.4% Weighted 97.8% ▪ Well positioned lease expiration Avg: 97.9% 96.9% 96.7% schedule with 73% of leases (by 96.7% 96.3% rent) expiring after 2021 ▪ In 2019 and YTD 2020, average 94.7% annual re-leasing spreads of 1.9% on properties with predetermined renewal options 2009 2010 2011 2012 2013 2014 2015 2016 2017 2018 2019 YTD 2019 Summary of Lease Expirations Annual Rent (3) Year Number of Properties Square Feet (2) 2020 88 266,796 $2,874,373 2021 70 160,774 $1,440,121 (4) 2022 $4,536,299 217 546,611 2023 56 228,885 $2,753,034 Thereafter 136 558,947 $5,714,800 Total 567 1,762,013 $17,318,627 Source: Company Filings (2) Includes 39 holdover leases that are paying monthly while a new lease is being negotiated with the USPS 6 Note: As of May 14, 2020 (3) Expiring rent calculated on last contractual rent paid monthly annualized (1) Represents the weighted average lease retention of our predecessor for owned and managed properties (4) 135 of the 217 leases set to expire are under a master lease that expires in 2022 prior to our IPO from 2009 to 2019
Favorable Lease Structure 1 USPS Leases Have More Favorable Lease Terms Than GSA Leases O VERVIEW OF N EW USPS L EASE ▪ Unlike, GSA leases USPS leases are not subject to annual budgetary appropriations ▪ ▪ PSTL and USPS are negotiating an USPS leases are not full service gross leases addendum to a new lease, which is not ▪ Upon lease renewal, no tenant improvements or free rent expected to have a material economic impact Typical Typical Typical Tenant PSTL PSTL Gross Single Double Triple GSA PSTL typical lease form will Responsibilities USPS USPS Lease Net Net Net shift certain operating (Old) (New) expenses (including electrical ✓ ✓ ✓ ✓ ✓ Taxes components and plumbing systems) to landlord ✓ ✓ Insurance ✓ ✓ ✓ Utilities Rental rates expected to ✓ ✓ ✓ Maintenance increase commensurate with additional expenses Roof / ✓ Structure Plumbing ✓ ✓ Systems Yields expected to Electrical ✓ ✓ remain unchanged Components ✓ ✓ ✓ Routine 7
Significant Opportunities for Growth 2 PSTL Can Be An Institutional Consolidator ▪ Approximately 23,000 postal properties are privately owned and leased back to the Postal Service ▪ In addition to its portfolio of 567 owned assets, PSTL manages 403 postal properties through its taxable REIT subsidiary – PSTL maintains a right of first offer (“ROFO”) on more than 250 of those locations ▪ PSTL’s owned and managed portfolios represent 2.5% and 1.8% of this addressable market, respectively F RAGMENTED P OSTAL P ROPERTIES O WNERSHIP O VERVIEW OF PSTL’ S M ANAGED P ORTFOLIO PSTL Owned PSTL Managed Postal Properties Postal Properties 567 403 Other Privately- Owned Post Offices Leased to USPS (1) 22,030 Source: Company Filings 8 Note: As of May 14, 2020 (1) Reflects estimated Postal Properties leased to the USPS less PSTL’s owned and managed portfolios
Company Activity Post-IPO 2 Meaningful Growth Since IPO Executed On Acquisition Strategy Improved Financing Strategies ▪ ▪ Acquired 296 additional properties for $98 million Established a $100 million revolving credit facility – – Over 890,000 net leasable interior square feet Exercised a $50 million accordion feature for total capacity of $150 million (1) acquired – ▪ Weighted average rental rate of $9.83 / SF across Utilized 1,307,683 OP units to partially fund the owned portfolio versus $9.58 / SF at IPO acquisition of two portfolios comprised of 135 postal properties P ROPERTY C OUNT S QUARE F OOTAGE A NNUALIZED R ENTAL I NCOME 567 1,762,013 $17,318,627 +109.2% +102.1% +107.5% Growth Growth Growth 871,843 $8,348,003 271 May 2019 Current May 2019 Current May 2019 Current Source: Company Filings 9 Note: As of May 14, 2020; portfolio statistics reflect owned properties only (1) Assumes all borrowing base properties are unencumbered and subject to an enforceable, which excludes the 39 properties currently in holdover status
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