Postal Realty Trust, Inc.

Greetings and welcome to Postal Realty Trust Fourth Quarter and Full Year 2022 Earnings Call. At this time, all participants are in a listen-only mode. A question and answer session will follow the prepared remarks. As a reminder, this conference is being recorded. I would now like to turn the conference over to your host, Mr. Jordan Cooperstein, Vice President of FP&A Capital Markets. Please go ahead.

Thank you. Good morning everyone and welcome to the Postal Realty Trust fourth quarter and full year 2022 earnings conference call. On the call today we have Andrew Spodek, Chief Executive Officer, Jeremy Garber, President, Robert Klein, Chief Financial Officer, and Matt Brandwein, Chief Accounting Officer. Please note the use of forward-looking statements by the company on this conference call. Statements made on this call may include statements that are not historical facts and are considered forward-looking. These forward-looking statements are covered by the Safe Harbor provisions for forward-looking statements contained in the Private Securities Litigation Reform Act of 1995. Actual results may differ materially from those described in the forward-looking statements and will be affected by a variety of risks and factors that are beyond the company's control, including, without limitation, those contained in the company's latest 10-K and its other Securities and Exchange Commission filings. The company does not assume and specifically disclaims any obligation to update any forward-looking statements, whether as a result of new information, future events, or otherwise. Additionally, on this conference call, the company may refer to certain non-GAAP financial measures, such as funds from operations, adjusted funds from operations, adjusted EBITDA, and net debt. You can find a tabular reconciliation of these non-GAAP financial measures to the most currently comparable GAAP measures in the company's earnings release and supplemental materials. With that, I will now turn the call over to Andrew Spodek, Chief Executive Officer of Postal Realty Trust.

Good morning, and thank you for joining us. The fourth quarter marked a solid finish to the year as we surpassed our 2022 acquisitions target, acquiring 320 properties for $123 million. This caps another year of strong growth in our portfolio, as we have now completed over $400 million of acquisitions since Postal's IPO in 2019. Even amidst challenging capital markets and the uncertain macroeconomic environment, we remain encouraged by our strategic positioning and the strength of our balance sheet. As we discussed last quarter and as expected, we are navigating a dramatically different environment as compared to a year ago in terms of deal flow and valuation assumptions. Given the significant upward shift in interest rates over the past year, it is taking time for prospective sellers to adjust their price expectations. We continue to be patient in our approach, setting ourselves up with ample dry powder to take advantage of accretive opportunities that present themselves going forward. As we've highlighted repeatedly over the past year, the conservative and proactive management of our balance sheet puts us in a great position to grow our portfolio with low leverage minimal exposure to variable rates, and no notable debt maturities until 2026. We are also demonstrating strong organic growth across our portfolio, which Rob will provide more detail on later in the call. In the second half of the year and most recently the fourth quarter, we transacted at higher cap rates. This impacted volume in line with our expectations and the near-term outlook that we previously shared. Looking to 2023, we are continuing with the same measured approach as in recent quarters. As sellers remain slow to adjust their pricing and we continue to pursue higher yielding properties, there will be reduced near-term volume. While we have limited visibility on when this bid-ask spread will resolve, we anticipate 2023 acquisitions could be in the neighborhood of $80 million and are optimistic that our acquisitions will pick up in the second half of the year. Looking out further, the opportunity in front of us remains robust and the main drivers of our business are unchanged. irrespective of the higher interest rate environment. With significant capacity for future growth, we are in a very strong position operationally and financially to be acquisitive when attractive opportunities present themselves. I'll now turn the call over to Jeremy to discuss our operating metrics.