Postal Realty Trust (NYSE:PSTL) executives said the REIT “exceeded expectations on all fronts” in 2025, pointing to portfolio growth, scale-driven operating efficiencies, and continued demand for U.S. Postal Service-leased facilities as key drivers. Management also issued 2026 guidance that calls for continued funds-from-operations growth and another year of acquisition activity funded through a mix of equity, debt, and retained cash flow.
Management highlights portfolio growth and USPS tenancy
Chief Executive Officer Andrew Spodek said the company’s 2025 results reflected “the stability and growth inherent” in its portfolio of logistics infrastructure leased to the United States Postal Service (USPS). He noted the company grew its asset base by approximately 20% in 2025 and said its gross real estate value has increased “by 10 times since IPO.”
The company also highlighted expanded access to capital, supported by what management described as a triple-B investment grade rating from Kroll KBRA, and said year-end liquidity increased to $271 million when including revolver “upsides” and equity raising activity completed early in the first quarter.
Fourth-quarter and full-year results; 2026 AFFO outlook
Chief Financial Officer Steve Bakke reported adjusted funds from operations (AFFO) per share of $0.33 for the fourth quarter of 2025, bringing full-year 2025 AFFO per share to $1.32. Bakke said the full-year result was at the high end of the company’s most recent guidance and represented 13.8% growth for the year.
Key 2025 operational metrics cited on the call included:
- Acquisitions of $123.1 million for the year, slightly above the company’s December guidance.
- Full-year cash general and administrative expense (cash G&A) of $10.9 million, slightly better than the midpoint of guidance.
- Cash G&A as a share of revenue declining by nearly 130 basis points, which management attributed to scale efficiencies.
- Same-store cash net operating income (NOI) performance of 8.9% in 2025.
For 2026, the company provided AFFO per share guidance of $1.39 to $1.41, which Bakke said implies 6.1% growth at the midpoint and is above the company’s average annual growth rate since 2020 of 5.8% per year.
Management’s 2026 guidance assumptions included acquisitions of $115 million to $125 million, same-store cash NOI growth of 6.0% to 7.0%, and cash G&A of $11.5 million to $12.5 million. For the first quarter, the company expects recurring capital expenditures of approximately $125,000 to $200,000. Guidance also includes about half a cent per share of dilutive impact from forward equity under the treasury stock method, as the stock price is above the net price of outstanding forwards, Bakke said.
Capital markets activity and leverage target update
Postal Realty Trust outlined funding activity across 2025 and early 2026. Bakke said the company raised $55 million in 2025 via its at-the-market program and OP unit issuance, added $40 million in term loans, borrowed on its revolver, and used retained cash flow to fund acquisitions.
For 2026, management said it has “fully funded the entirety” of its acquisition guidance at the high end on a “leverage neutral basis” through equity and debt raises and growing retained free cash flow. In 2026 year-to-date, the company has raised $44 million of equity at an average gross price of $17.67 per share, including $36 million sold on a forward basis at a gross price of $17.88 per share. Bakke said the forward ATM allows the company to match share issuance with future acquisition closings.
On the debt side, the company closed on $115 million of new revolving credit facility commitments on Feb. 20 and added Scotiabank as a new lender. Bakke said the added liquidity strengthens the balance sheet and supports growth.
Postal Realty Trust ended 2025 with net debt to annualized adjusted EBITDA of 5.2x, or 4.6x after giving effect to unsettled forward equity. Management also updated its leverage target, with Bakke saying the company now targets net debt to adjusted EBITDA “below 6x,” reduced from a prior target of below 7x. At year-end, the balance sheet was 89% fixed-rate debt and 91% unsecured debt, with $113 million of liquidity that rises to about $270 million including capital raised in the first quarter, according to Bakke.
In January, the company increased its dividend by 1% to $0.245 per quarter, extending what management called its record of raising the dividend each year since its IPO.
Leasing progress and acquisition details
President Jeremy Garber said the company had executed all new leases for properties that expired in 2025 except for five properties acquired during 2025 and one acquired in holdover status during 2026. Garber said the five properties acquired during 2025 have agreed-upon rents and the leases are in production.
For 2026 re-leasing, Garber said that other than four recently acquired properties, all rents have been agreed upon and are currently in lease production, and that the company is negotiating rents for 2027 leases. He said leases will have 3% escalators and “the vast majority” will have 10-year terms, adding that the company has begun discussions on 2028 expirations as it works with USPS to get further ahead of renewals.
Garber also provided portfolio metrics tied to lease structure:
- 53% of portfolio rent is subject to annual rent escalations.
- 37% consists of leases with 10-year terms based on executed and agreed-upon leases as of Feb. 13.
- Inclusive of executed and agreed rents through 2026, the weighted average lease term will extend to over five years, compared to three years at the time of the IPO.
The company received no lump-sum catch-up payments in the fourth quarter. Garber said catch-up payments should continue to diminish in frequency and value as more leases are signed ahead of expiration, aside from prospective acquisitions acquired in holdover status.
On acquisitions, Garber said Postal Realty Trust acquired 216 properties in 2025 for $123 million at a 7.7% weighted average initial cash cap rate. In the fourth quarter, the company acquired 65 properties for approximately $29.1 million at a 7.5% weighted average initial cash cap rate, adding about 142,000 net leasable interior square feet. The fourth-quarter mix included 42 last-mile post offices totaling 55,000 square feet and 23 flex properties totaling 87,000 square feet.
Q&A: acquisition pace, USPS “last mile,” and renewals
During the question-and-answer session, management said it felt “very confident” in the acquisition pipeline and highlighted that its initial 2026 acquisition guidance is “over 40% higher” than initial guidance from the prior year. Spodek reiterated that the company’s strategy remains to pursue acquisitions that are “day one accretive” and provide meaningful growth over time.
Executives also discussed what they described as the USPS revenue model evolving. Garber said a new Postmaster General joined in July and announced that the Postal Service would allow broader access to its “last mile,” with a portal accepting bids from potential customers and “over 1,200 requests for participation” as of USPS’s last commentary. Asked about real estate implications, Garber said USPS has identified delivery units—about 22,000 of more than 30,000 facilities—and stated that those facilities “are already built and equipped to handle that type of logistics.”
On 2027 lease expirations, Bakke said the company expects all those leases to be renewed “for the next couple of years,” noting the setup is similar to 2026. In response to a follow-up question, he said the 2027 expirations include 470 leases and that a large portion—about 160 leases—are part of a master lease being worked through with USPS.
Management also addressed underwriting returns from its leasing model. While executives said they have not fully articulated the value of rent spreads and mark-to-market opportunities, Bakke suggested that combining the initial 7.5% cash cap rate with recent average same-store NOI growth “around 6%” implies a 13% to 14% unlevered internal rate of return as a “shortcut” estimate.
In closing remarks, Spodek said that with capital raised and a “robust pipeline,” the company is in what he described as its strongest position as a public company to pursue growth opportunities in the months ahead.
About Postal Realty Trust (NYSE:PSTL)
Postal Realty Trust is a real estate investment trust that acquires, owns and manages single-tenant commercial properties net-leased primarily to the United States Postal Service and other government agencies. The trust focuses on facilities that support mail processing, distribution and retail operations, targeting assets that offer long-term, inflation-protected lease structures.
The company’s portfolio includes post offices, distribution centers and mail processing facilities located throughout the contiguous United States.
