Item 9A. Controls and Procedures
ITEM 9A. CONTROLS AND PROCEDURES
Evaluation of Disclosure Controls and Procedures
We maintain disclosure controls and procedures (as such term is defined in Rule 13a-15(e) and 15d-15(e) under the Exchange Act, that are designed to ensure that information required to be disclosed in our reports under the Exchange Act is processed, recorded, summarized and reported within the time periods specified in the rules and regulations of the SEC and that such information is accumulated and communicated to management, including our Chief Executive Officer (Principal Executive Officer) and Chief Financial Officer (Principal Financial Officer), as appropriate, to allow for timely decisions regarding required disclosure. In designing and evaluating the disclosure controls and procedures, management recognizes that any controls and procedures, no matter how well designed and operated, can provide only reasonable assurance of achieving the desired control objectives, and management is required to apply its judgment in evaluating the cost-benefit relationship of possible controls and procedures.
We have carried out an evaluation, under the supervision and with the participation of management, including our Principal Executive Officer and Principal Financial Officer, regarding the effectiveness of our disclosure controls and procedures as of December 31, 2022, the end of the period covered by this Annual Report on Form 10-K. Based on the foregoing, our Principal Executive Officer and Principal Financial Officer have concluded, as of December 31, 2022, that our disclosure controls and procedures were effective in ensuring that information required to be disclosed by us in reports filed or submitted under the Exchange Act (i) is processed, recorded, summarized and reported within the time periods specified in the SEC’s rules and forms and (ii) is accumulated and communicated to our management, including our Principal Executive Officer and Principal Financial Officer, as appropriate to allow for timely decisions regarding required disclosure.
Management’s Report on Internal Control Over Financial Reporting
Our management, including our Principal Executive Officer and Principal Financial Officer, is responsible for establishing and maintaining adequate internal control over financial reporting, as such term is defined in Rules 13a-15(f) and 15d-15(f) under the Exchange Act. Under the supervision and with the participation of our management, including our Principal Executive Officer and Principal Financial Officer, we conducted an evaluation of the effectiveness of our internal control over financial reporting based on the original framework in Internal Control - Integrated Framework issued in 2013 by the Committee of Sponsoring Organizations of the Treadway Commission. Based on our evaluation under the framework in Internal Control - Integrated Framework, our management concluded that our internal control over financial reporting was effective as of December 31, 2022.
Changes in Internal Control over Financial Reporting
There was no change in our internal control over financial reporting that occurred during our most recent fiscal quarter that has materially affected, or is reasonably likely to materially affect, our internal control over financial reporting.
ITEM 9B. OTHER INFORMATION
None.
ITEM 9C. DISCLOSURE REGARDING FOREIGN JURISDICTIONS THAT PREVENT INSPECTIONS
Not applicable.
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PART III
ITEM 10. DIRECTORS, EXECUTIVE OFFICERS AND CORPORATE GOVERNANCE
The information required by Item 10 is incorporated by reference to our definitive Proxy Statement for our 2023 annual stockholders’ meeting.
ITEM 11. EXECUTIVE COMPENSATION
The information required by Item 11 is incorporated by reference to our definitive Proxy Statement for our 2023 annual stockholders’ meeting.
ITEM 12. SECURITY OWNERSHIP OF CERTAIN BENEFICIAL OWNERS AND MANAGEMENT AND RELATED STOCKHOLDER MATTERS
The information required by Item 12 is incorporated by reference to our definitive Proxy Statement for our 2023 annual stockholders’ meeting.
ITEM 13. CERTAIN RELATIONSHIPS AND RELATED TRANSACTIONS, AND DIRECTOR INDEPENDENCE
The information required by Item 13 is incorporated by reference to our definitive Proxy Statement for our 2023 annual stockholders’ meeting.
ITEM 14. PRINCIPAL ACCOUNTANT FEES AND SERVICES
The information required by Item 14 is incorporated by reference to our definitive Proxy Statement for our 2023 annual stockholders’ meeting.
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PART IV
EXHIBITS AND FINANCIAL STATEMENT SCHEDULES
(1) Financial Statements
Our consolidated financial statements and notes thereto, together with the Reports of Independent Registered Public Accounting Firm are included in Item 8 of this Annual Report on Form 10-K commencing on page F-1.
(2) Financial Statement Schedules
Our financial statement schedule is included in Part IV of this Annual Report on Form 10-K.
(3) Exhibits
A list of exhibits to this Annual Report on Form 10-K is set forth on the Index to Exhibits commencing on page 49 and is incorporated herein by reference.
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Postal Realty Trust, Inc.
Schedule III - Real Estate and Accumulated Depreciation
As of December 31, 2022
Number of Properties (1) Encumbrances Initial Cost to Company Cost Capitalized Subsequent to Acquisition Gross Amount Carried at Close of Period (2) Accumulated Depreciation Date Acquired Depreciable Life
(Yrs) (3)
State/Territory Land Buildings & Improvements Land Buildings & Improvements Total
Alabama 23 — 2,800 16,793 127 2,800 16,920 19,720 808 2013-2022 40
Alaska 1 — 15 51 — 15 51 66 9 2018 40
Arizona 9 — 1,354 5,151 — 1,354 5,151 6,505 58 2021-2022 40
Arkansas 28 — 1,462 5,258 — 1,462 5,258 6,720 791 2013-2022 40
California 21 — 10,210 14,471 324 10,210 14,795 25,005 765 2019-2022 40
Colorado 20 — 1,515 11,144 60 1,515 11,204 12,719 875 2019-2022 40
Connecticut 8 — 1,166 5,245 17 1,166 5,262 6,428 338 2013-2022 40
Delaware 2 — 297 600 — 297 600 897 36 2020-2022 40
Florida 22 — 5,027 10,900 73 5,027 10,969 15,996 590 2013-2022 40
Georgia 28 — 1,313 6,410 115 1,313 6,525 7,838 446 2013-2022 40
Hawaii 1 — 1,810 1,447 168 1,810 1,615 3,425 66 2021 40
Idaho 11 — 79 1,146 — 79 1,146 1,225 268 2013-2022 40
Illinois 62 — 1,210 7,681 169 1,210 7,850 9,060 613 2013-2022 40
Indiana 28 — 1,070 7,810 177 1,070 7,987 9,057 491 2019-2022 40
Iowa 33 — 869 6,433 169 869 6,602 7,471 434 2013-2022 40
Kansas 30 — 1,101 9,977 393 1,101 10,274 11,375 668 2013-2022 40
Kentucky 23 — 783 3,728 7 783 3,735 4,518 219 2013-2022 40
Louisiana 32 — 2,109 8,380 140 2,109 8,493 10,602 869 2013-2022 40
Maine 43 — 1,488 4,332 349 1,488 4,681 6,169 445 2013-2022 40
Maryland 8 — 852 1,632 22 852 1,654 2,506 141 2013-2022 40
Massachusetts 17 — 2,702 9,018 84 2,702 9,102 11,804 1,974 2007-2022 40
Michigan 55 — 3,256 11,725 463 3,256 12,118 15,374 1,017 2011-2022 40
Minnesota 53 333 917 8,491 75 917 8,513 9,430 608 2013-2022 40
Mississippi 18 — 948 4,247 144 948 4,391 5,339 477 2013-2022 40
Missouri 37 — 1,287 6,847 214 1,287 7,052 8,339 565 2013-2022 40
Montana 13 — 435 3,359 94 435 3,453 3,888 290 2013-2022 40
Nebraska 23 — 178 2,730 49 178 2,779 2,957 157 2013-2022 40
Nevada 4 — 485 2,314 — 485 2,314 2,799 112 2013-2021 40
New Hampshire 8 — 519 1,231 8 519 1,239 1,758 85 2019-2022 40
New Jersey 5 — 319 1,536 16 319 1,552 1,871 61 2019-2022 40
New Mexico 5 — 373 812 — 373 812 1,185 62 2019-2022 40
New York 49 — 4,633 16,057 308 4,633 16,365 20,998 728 2019-2022 40
North Carolina 54 — 5,979 17,154 113 5,979 17,267 23,246 1,245 2013-2022 40
North Dakota 21 — 225 2,170 4 225 2,174 2,399 218 2013-2022 40
Ohio 32 844 2,957 11,768 213 2,957 11,961 14,918 1,024 2006-2022 40
Oklahoma 47 — 1,464 7,146 209 1,464 7,242 8,706 1,197 2013-2022 40
Oregon 3 — 581 1,386 27 581 1,413 1,994 66 2020-2022 40
Pennsylvania 87 31,634 8,531 63,242 524 8,531 63,744 72,275 5,075 2005-2022 40
Puerto Rico 1 — 99 349 — 99 349 448 9 2022 40
South Carolina 22 282 1,590 4,766 1,101 1,590 5,862 7,452 306 2019-2022 40
South Dakota 20 — 337 2,165 31 337 2,196 2,533 217 2013-2022 40
Tennessee 24 — 2,740 9,332 38 2,740 9,370 12,110 756 2013-2022 40
Texas 86 — 4,868 20,431 390 4,868 20,818 25,686 2,758 2005-2022 40
Utah 2 — 97 880 — 97 880 977 68 2020-2022 40
Vermont 18 — 1,138 3,976 18 1,138 3,994 5,132 197 2019-2022 40
Virginia 24 — 2,810 10,767 56 2,810 10,823 13,633 446 2019-2022 40
Washington 7 — 456 1,341 — 456 1,341 1,797 138 2013-2022 40
West Virginia 34 — 927 6,390 204 927 6,594 7,521 258 2019-2022 40
Wisconsin 77 — 2,513 16,292 390 2,513 16,673 19,186 2,139 2005-2022 40
Wyoming 5 — 126 1,808 — 126 1,808 1,934 74 2013-2022 40
1,284 $ 33,093 $ 90,020 $ 378,319 $ 7,083 $ 90,020 $ 384,971 $ 474,991 $ 31,257
Explanatory Notes :
(1) Excludes two properties accounted for as direct financing leases.
(2) The aggregate cost for Federal Income Tax purposes was approximately $ 498.6 million as of December 31, 2022.
(3) Estimated useful life for buildings.
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The following table reconciles real estate for the years ended December 31, 2022 and 2021:
For the Years Ended December 31,
2022 2021
Beginning Balance
$ 348,365 $ 247,072
Acquisitions
123,719 99,006
Capital Improvements
3,251 2,492
Write-offs
( 322 ) ( 37 )
Other
( 22 ) ( 168 )
Ending Balance
$ 474,991 $ 348,365
Explanatory Note:
(1) Other includes reclassification adjustments.
The following table reconciles accumulated depreciation for the years ended December 31, 2022 and 2021:
For the Years Ended December 31,
2022 2021
Beginning Balance
$ ( 20,884 ) $ ( 13,215 )
Depreciation expense
( 10,695 ) ( 7,706 )
Write-offs
322 37
Ending Balance
$ ( 31,257 ) $ ( 20,884 )
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EXHIBIT INDEX
Exhibit Number Description
3.1 Articles of Amendment and Restatement of the Company, dated as of May 15, 2019 (incorporated by reference to Exhibit 3.1 to the Company’s Quarterly Report on Form 10-Q filed on June 27, 2019).
3.2 Amended and Restated Bylaws of the Company, effective as of May 15, 2019 (incorporated by reference to Exhibit 3.2 to the Company’s Quarterly Report on Form 10-Q filed on June 27, 2019).
4.1 Form of Certificate of Class A Common Stock of the Company (incorporated by reference to Exhibit 4.1 to the Company’s Registration Statement on Form S-11/A filed on May 7, 2019).
4.2 Description of Securities Registered Pursuant to Section 12 of the Securities Exchange Act of 1934, as amended (incorporated by reference to Exhibit 4.2 to the Company’s Annual Report on Form 10-K filed with the Commission on March 27, 2020).
10.1 First Amended and Restated Agreement of Limited Partnership of the Postal Realty LP, dated May 16, 2019 (incorporated by reference to Exhibit 10.1 to the Company’s Quarterly Report on Form 10-Q filed on June 27, 2019).
10.2 Postal Realty Trust, Inc. Amended and Restated Alignment of Interest Program (incorporated by reference to Exhibit 10.1 to the Company’s Current Report on Form 8-K filed on April 29, 2020).†
10.3 Representation, Warranty and Indemnity Agreement, dated as of May 14, 2019, by and among the Company, Postal Realty LP and Andrew Spodek (incorporated by reference to Exhibit 10.14 to the Company’s Quarterly Report on Form 10-Q filed on June 27, 2019).†
10.4 Tax Indemnification Agreement, dated as of May 14, 2019, by and among the Company, United Properties Holding, Inc., United Post Office Investments, Inc. and Andrew Spodek (incorporated by reference to Exhibit 10.15 to the Company’s Quarterly Report on Form 10-Q filed on June 27, 2019).†
10.5 Form of Right of First Offer Agreement (incorporated by reference to Exhibit 10.18 to the Company’s Registration Statement on Form S-11/A filed on May 7, 2019).†
10.6 Tax Protection Agreement, dated as of May 14, 2019, by and among the Company, Postal Realty LP, Andrew Spodek, Tayaka Holdings, LLC and IDJ Holdings, LLC (incorporated by reference to Exhibit 10.17 to the Company’s Quarterly Report on Form 10-Q filed on June 27, 2019).†
10.7 Tax Protection Agreement, dated as of May 14, 2019, by and among the Company, Postal Realty LP and Nationwide Postal Management Holdings, Inc. (incorporated by reference to Exhibit 10.18 to the Company’s Quarterly Report on Form 10-Q filed on June 27, 2019).†
10.8 Tax Protection Agreement, dated as of May 14, 2019, by and among the Company, Postal Realty LP and Unlimited Postal Holdings LP (incorporated by reference to Exhibit 10.19 to the Company’s Quarterly Report on Form 10-Q filed on June 27, 2019).†
10.9 Form of Third Party Management Agreement (incorporated by reference to Exhibit 10.11 of the Company’s Registration Statement on Form S-11/A filed on May 7, 2019).
10.10 Indemnification Agreement, dated as of May 17, 2019, by and between the Company and Patrick Donahue (incorporated by reference to Exhibit 10.21 to the Company’s Quarterly Report on Form 10-Q filed on June 27, 2019).†
10.11 Indemnification Agreement, dated as of May 17, 2019, by and between the Company and Anton Feingold (incorporated by reference to Exhibit 10.22 to the Company’s Quarterly Report on Form 10-Q filed on June 27, 2019).†
10.12 Indemnification Agreement, dated as of May 17, 2019, by and between the Company and Jeremy Garber (incorporated by reference to Exhibit 10.23 to the Company’s Quarterly Report on Form 10-Q filed on June 27, 2019).†
10.13 Indemnification Agreement, dated as of May 17, 2019, by and between the Company and Jane Gural-Senders (incorporated by reference to Exhibit 10.24 to the Company’s Quarterly Report on Form 10-Q filed on June 27, 2019).†
10.14 Indemnification Agreement, dated as of May 17, 2019, by and between the Company and Barry Lefkowitz (incorporated by reference to Exhibit 10.25 to the Company’s Quarterly Report on Form 10-Q filed on June 27, 2019).†
10.15 Indemnification Agreement, dated as of May 17, 2019, by and between the Company and Andrew Spodek (incorporated by reference to Exhibit 10.26 to the Company’s Quarterly Report on Form 10-Q filed on June 27, 2019).†
10.16 Indemnification Agreement, dated as of January 1, 2021, by and between the Company and Robert B. Klein (incorporated by reference to Exhibit 10.1 to the Company’s Quarterly Report on Form 10-Q filed on August 13, 2021) .†
10.17 Indemnification Agreement, dated as of May 17, 2019, by and between the Company and Matt Brandwein (incorporated by reference to Exhibit 10.27 to the Company’s Quarterly Report on Form 10-Q filed on June 27, 2019).†
10.18 Employment Agreement, dated June 26, 2019, by and between the Company and Andrew Spodek (incorporated by reference to Exhibit 10.28 to the Company’s Quarterly Report on Form 10-Q filed on June 27, 2019).†
10.19 Employment Agreement, dated June 26, 2019, by and between the Company and Jeremy Garber (incorporated by reference to Exhibit 10.29 to the Company’s Quarterly Report on Form 10-Q filed on June 27, 2019).†
10.20 Employment Agreement, dated December 30, 2020, by and between the Company and Robert B. Klein (incorporated by reference to Exhibit 10.1 to the Company’s Current Report on Form 8-K filed on January 4, 2021).†
10.21 2019 Equity Incentive Plan of the Company (incorporated by reference to Exhibit 10.2 to the Company’s Registration Statement on Form S-11/A filed on May 7, 2019).†
10.22 Amendment No. 1 to the Postal Realty Trust, Inc. 2019 Equity Incentive Plan, effective as of June 26, 2020 (incorporated by reference to Exhibit 10.1 to the Company’s Current Report on Form 8-K filed on July 1, 2020).†
10.23 Amendment No. 2 to the Postal Realty Trust, Inc. 2019 Equity Incentive Plan, effective as of June 18, 2021 (incorporated by reference to Exhibit 10.1 to the Company’s Current Report on Form 8-K filed on June 21, 2021) .†
10.24 Form of 2019 Equity Incentive Plan Stock Award Agreement and Notice (incorporated by reference to Exhibit 10.5 of the Company’s Registration Statement on Form S-11/A filed on May 7, 2019).†
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Exhibit Number Description
10.25 Form of 2019 Employee Stock Purchase Plan of the Company (incorporated by reference to Exhibit 10.4 to the Company’s Registration Statement on Form S-11/A filed on May 7, 2019). †
10.26 Form of LTIP Unit Vesting Agreement (incorporated by reference to Exhibit 10.6 of the Company’s Registration Statement on Form S-11/A filed on May 7, 2019).†
10.27 Credit Agreement, dated August 9, 2021, by and among Postal Realty LP, the Company, the certain subsidiaries from time to time party thereto as guarantors, and Bank of Montreal, as administrative agent, and the several banks and financial institutions party thereto as lenders (incorporated by reference to Exhibit 10.1 to the Company’s Current Report on Form 8-K filed on August 10, 2021) .
10.28 First Amendment to Credit Agreement, dated May 11, 2022, by and among Postal Realty LP, the Company, the certain subsidiaries from time to time party thereto as guarantors, and Bank of Montreal, as administrative agent, and the several banks and financial institutions party thereto as lenders (incorporated by reference to Exhibit 10.1 to the Company’s Current Report on Form 8-K filed on May 11, 2022).
10.29 Open-End Mortgage, Security Agreement, Fixture Filing, Financing Statement and Assignment of Leases and Rents, dated as of December 18, 2020, by and among Thorn Hill Postal Realty Holdings LLC, The United States Life Insurance Company in the City of New York and National Union Fire Insurance Company of Pittsburgh, PA (incorporated by reference to Exhibit 10.1 to the Company’s Current Report on Form 8-K filed on December 21, 2020).
10.30 Promissory Note (USLIC), dated December 18, 2020, made by Thorn Hill Postal Realty Holdings LLC to The United States Life Insurance Company in the City of New York (incorporated by reference to Exhibit 10.2 to the Company’s Current Report on Form 8-K filed on December 21, 2020).
10.31 Promissory Note (USLIC – Fortitude), dated December 18, 2020, made by Thorn Hill Postal Realty Holdings LLC to The United States Life Insurance Company in the City of New York (incorporated by reference to Exhibit 10.3 to the Company’s Current Report on Form 8-K filed on December 21, 2020).
10.32 Promissory Note (NUFIC), dated December 18, 2020, made by Thorn Hill Postal Realty Holdings LLC to National Union Fire Insurance Company of Pittsburgh, PA (incorporated by reference to Exhibit 10.4 to the Company’s Current Report on Form 8-K filed on December 21, 2020).
10.33 Suretyship Agreement, dated December 18, 2020, in favor of The United States Life Insurance Company in the City of New York and National Union Fire Insurance Company of Pittsburgh, PA (incorporated by reference to Exhibit 10.5 to the Company’s Current Report on Form 8-K filed on December 21, 2020).
21.1 Subsidiaries of the Company.*
23.1 Consent of BDO USA, LLP.*
31.1 Certification of Annual Report by Chief Executive Officer under Section 302 of the Sarbanes-Oxley Act of 2002.*
31.2 Certification of Annual Report by Chief Financial Officer under Section 302 of the Sarbanes-Oxley Act of 2002.*
32.1 Certification of Chief Executive Officer furnished pursuant to 18 U.S.C. Section 1350 as Adopted Pursuant to Section 906 of the Sarbanes-Oxley Act of 2002.*
32.2 Certification of Chief Financial Officer furnished pursuant to 18 U.S.C. Section 1350 as Adopted Pursuant to Section 906 of the Sarbanes-Oxley Act of 2002.*
101.INS INSTANCE DOCUMENT**
101.SCH SCHEMA DOCUMENT**
101.CAL CALCULATION LINKBASE DOCUMENT**
101.LAB LABELS LINKBASE DOCUMENT**
101.PRE PRESENTATION LINKBASE DOCUMENT**
101.DEF DEFINITION LINKBASE DOCUMENT**
104 Cover Page Interactive Data File (formatted as Inline XBRL and contained in Exhibit 101)
_______________________
* Filed herewith
† Compensatory plan or arrangement
** Submitted electronically herewith. Attached as Exhibit 101 to this report are the following documents formatted in XBRL (eXtensible Business Reporting Language): (i) Consolidated Balance Sheets; (ii) Consolidated Statements of Operations and Comprehensive Income; (iii) Consolidated Statements of Changes in Equity (Deficit); (iv) Consolidated Statements of Cash Flows; and (v) Notes to Consolidated Financial Statements.
ITEM 16. FORM 10-K SUMMARY
None.
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SIGNATURES
Pursuant to the requirements of Section 13 or 15(d) of the Securities Exchange Act of 1934, the registrant has duly caused this report to be signed on its behalf by the undersigned, thereunto duly authorized.
POSTAL REALTY TRUST, INC.
Date: March 7, 2023 By: /s/ Andrew Spodek
Andrew Spodek
Chief Executive Officer
Pursuant to the requirements of the Securities Exchange Act of 1934, this report has been signed below by the following persons on behalf of the registrant and in the capacities and on the dates indicated.
Name Title Date
/s/ Andrew Spodek Chief Executive Officer and Director March 7, 2023
Andrew Spodek (Principal Executive Officer)
/s/ Robert B. Klein Chief Financial Officer March 7, 2023
Robert B. Klein (Principal Financial Officer)
/s/ Matt Brandwein Senior Vice President and Chief Accounting Officer March 7, 2023
Matt Brandwein (Principal Accounting Officer)
/s/ Patrick Donahoe Independent Director, Chair of March 7, 2023
Patrick Donahoe Board of Directors
/s/ Barry Lefkowitz Independent Director March 7, 2023
Barry Lefkowitz
/s/ Jane Gural-Senders Independent Director March 7, 2023
Jane Gural-Senders
/s/ Anton Feingold Independent Director March 7, 2023
Anton Feingold
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