What changed in this filing

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Item 8. Financial Statements and Supplementary Data

2024-02-29 compared with 2023-03-07 · 239 added, 204 removed, 637 unchanged (41% of the section changed)

1 unchanged sentence

Financial Statements

Report of Independent Registered Public Accounting Firm (BDO USA, LLP;

New York, New York, PCAOB ID# 243 )

Report of Independent Registered Public Accounting Firm ( 2023:

Deloitte & Touche LLP, New York, New York, PCAOB ID# 34 )

Report of Independent Registered Public Accounting Firm ( 2022:

BDO USA, LLP, New York, New York, PCAOB ID# 243 )

Consolidated Balance Sheets as of December 31, 202 3 and 202 2

Consolidated Statements of Operations and Comprehensive Income for the Years Ended December 31, 202 3 and 2022

Consolidated Statements of Changes in Equity (Deficit) for the Years Ended December 31, 202 2 and 202 1

Consolidated Statements of Changes in Equity for the Years Ended December 31, 2023 and 2022

Consolidated Statements of Cash Flows for the Years Ended December 31, 202 3 and 20 2 2

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REPORT OF INDEPENDENT REGISTERED PUBLIC ACCOUNTING FIRM

To the Shareholders and the Board of Directors of Postal Realty Trust, Inc.

Opinion on the Financial Statements

We have audited the accompanying consolidated balance sheet of Postal Realty Trust, Inc.

(the "Company") as of December 31, 2023, the related consolidated statements of operations and comprehensive income, changes in equity, and cash flows, for the year ended December 31, 2023, and the related notes and the schedule listed in the Index at Item 15 (collectively referred to as the "financial statements").

In our opinion, the financial statements present fairly, in all material respects, the financial position of the Company as of December 31, 2023, and the results of its operations and its cash flows for the year ended December 31, 2023, in conformity with accounting principles generally accepted in the United States of America.

Basis for Opinion

These financial statements are the responsibility of the Company's management.

Our responsibility is to express an opinion on the Company's financial statements based on our audit.

We are a public accounting firm registered with the Public Company Accounting Oversight Board (United States) (PCAOB) and are required to be independent with respect to the Company in accordance with the U.S.

federal securities laws and the applicable rules and regulations of the Securities and Exchange Commission and the PCAOB.

We conducted our audit in accordance with the standards of the PCAOB.

Those standards require that we plan and perform the audit to obtain reasonable assurance about whether the financial statements are free of material misstatement, whether due to error or fraud.

The Company is not required to have, nor were we engaged to perform, an audit of its internal control over financial reporting.

As part of our audit, we are required to obtain an understanding of internal control over financial reporting but not for the purpose of expressing an opinion on the effectiveness of the Company’s internal control over financial reporting.

Accordingly, we express no such opinion.

Our audit included performing procedures to assess the risks of material misstatement of the financial statements, whether due to error or fraud, and performing procedures that respond to those risks.

Such procedures included examining, on a test basis, evidence regarding the amounts and disclosures in the financial statements.

Our audit also included evaluating the accounting principles used and significant estimates made by management, as well as evaluating the overall presentation of the financial statements.

We believe that our audit provides a reasonable basis for our opinion.

/s/ Deloitte & Touche LLP

New York, New York

February 29, 2024

We have served as the Company's auditor since 2023.

REPORT OF INDEPENDENT REGISTERED PUBLIC ACCOUNTING FIRM

Shareholders and Board of Directors

2 unchanged sentences

Opinion on the Consolidated Financial Statements

We have audited the accompanying consolidated balance sheets of Postal Realty Trust, Inc.

(the "Company") as of December 31, 2022 and 2021, the related consolidated statements of operations and comprehensive income, changes in equity (deficit), and cash flows for each of the years then ended, and the related notes and schedule listed in the accompanying index (collectively referred to as the “consolidated financial statements”).

In our opinion, the consolidated financial statements present fairly, in all material respects, the financial position of the Company at December 31, 2022 and 2021, and the results of its operations and its cash flows for the years then ended, in conformity with accounting principles generally accepted in the United States of America.

We have audited the accompanying consolidated balance sheet of Postal Realty Trust, Inc.

(the “Company”) as of December 31, 2022, the related consolidated statements of operations and comprehensive income, changes in equity, and cash flows for the year then ended, and the related notes and schedule listed in the accompanying index (collectively referred to as the “consolidated financial statements”).

In our opinion, the consolidated financial statements present fairly, in all material respects, the financial position of the Company at December 31, 2022, and the results of its operations and its cash flows for the year then ended, in conformity with accounting principles generally accepted in the United States of America.

Basis for Opinion

These consolidated financial statements are the responsibility of the Company’s management.

Our responsibility is to express an opinion on the Company’s consolidated financial statements based on our audits.

Our responsibility is to express an opinion on the Company’s consolidated financial statements based on our audit.

We are a public accounting firm registered with the Public Company Accounting Oversight Board (United States) (“PCAOB”) and are required to be independent with respect to the Company in accordance with the U.S.

federal securities laws and the applicable rules and regulations of the Securities and Exchange Commission and the PCAOB.

We conducted our audits in accordance with the standards of the PCAOB.

We conducted our audit in accordance with the standards of the PCAOB.

Those standards require that we plan and perform the audit to obtain reasonable assurance about whether the consolidated financial statements are free of material misstatement, whether due to error or fraud.

The Company is not required to have, nor were we engaged to perform, an audit of its internal control over financial reporting.

As part of our audits we are required to obtain an understanding of internal control over financial reporting but not for the purpose of expressing an opinion on the effectiveness of the Company’s internal control over financial reporting.

As part of our audit we are required to obtain an understanding of internal control over financial reporting but not for the purpose of expressing an opinion on the effectiveness of the Company’s internal control over financial reporting.

Accordingly, we express no such opinion.

Our audits included performing procedures to assess the risks of material misstatement of the consolidated financial statements, whether due to error or fraud, and performing procedures that respond to those risks.

Our audit included performing procedures to assess the risks of material misstatement of the consolidated financial statements, whether due to error or fraud, and performing procedures that respond to those risks.

Such procedures included examining, on a test basis, evidence regarding the amounts and disclosures in the consolidated financial statements.

Our audits also included evaluating the accounting principles used and significant estimates made by management, as well as evaluating the overall presentation of the consolidated financial statements.

We believe that our audits provide a reasonable basis for our opinion.

Our audit also included evaluating the accounting principles used and significant estimates made by management, as well as evaluating the overall presentation of the consolidated financial statements.

We believe that our audit provides a reasonable basis for our opinion.

/s/ BDO USA, LLP

We have served as the Company's auditor since 2017.

We served as the Company's auditor from 2017 to 2023.

New York, New York

39 unchanged sentences

Operating partnership unitholders’ non-controlling interests

58,063 54,480

Total Equity 301,625 283,711

19 unchanged sentences

Write-off and amortization of deferred financing fees ( 686 ) ( 596 )

Loss on early extinguishment of debt — ( 202 )

Interest income 5 1

4 unchanged sentences

Net income attributable to operating partnership unitholders’ non-controlling interests

( 874 ) ( 890 )

Net income attributable to common stockholders $ 3,709 $ 3,854

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Net income $ 4,583 $ 4,744

Unrealized gain on derivative instruments 8,249 960

Unrealized (loss) gain on derivative instruments

( 3,500 ) 8,249

Comprehensive income 1,083 12,993

Comprehensive income attributable to operating partnership unitholders’ non-controlling interests

( 239 ) ( 2,419 )

Comprehensive income attributable to common stockholders $ 844 $ 10,574

1 unchanged sentence

POSTAL REALTY TRUST, INC.

CONSOLIDATED STATEMENTS OF CHANGES IN EQUITY (DEFICIT)

(in thousands, except share and per share data)

CONSOLIDATED STATEMENTS OF CHANGES IN EQUITY

(in thousands, except share data)

Number of shares of Common Stock Common Stock Additional Paid-in Capital Accumulated Other Comprehensive Income Accumulated Deficit Total Stockholders’ equity Operating Partnership unitholders’ non-controlling interests Total Equity

1 unchanged sentence

Net proceeds from sale of common stock 751,382 7 11,332 — — 11,339 — 11,339

Issuance of OP Units in connection with acquisition transactions — — — — — — 15,501 15,501

Issuance of operating partnership units in connection with acquisition transactions — — — — — — 10,884 10,884

Issuance and amortization of equity-based compensation 226,575 2 3,283 — — 3,285 1,510 4,795

1 unchanged sentence

Restricted stock withholdings ( 27,729 ) — ( 424 ) — — ( 424 ) — ( 424 )

Dividends declared ($ 0.885 per share)

Dividends and distributions

— — — — ( 17,532 ) ( 17,532 ) ( 4,034 ) ( 21,566 )

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Net proceeds from sale of common stock 1,861,407 19 26,541 — — 26,560 — 26,560

Issuance of OP Units in connection with acquisition transactions — — — — — — 10,884 10,884

Issuance of operating partnership units in connection with acquisition transactions

— — — — — — 9,619 9,619

Shares issued upon redemption of operating partnership units

405,106 4 6,726 — — 6,730 ( 6,730 ) —

Cash redemption for non-controlling interests — — — — — — ( 558 ) ( 558 )

Issuance and amortization of equity-based compensation 153,006 1 3,493 — — 3,494 2,308 5,802

1 unchanged sentence

Restricted stock withholdings ( 29,390 ) — ( 445 ) — — ( 445 ) — ( 445 )

Dividends declared ($ 0.925 per share)

Dividends and distributions

— — — — ( 19,698 ) ( 19,698 ) ( 4,664 ) ( 24,362 )

Other comprehensive income — — — 6,720 — 6,720 1,529 8,249

Other comprehensive loss

— — — ( 2,865 ) — ( 2,865 ) ( 635 ) ( 3,500 )

Net income — — — — 3,709 3,709 874 4,583

16 unchanged sentences

Equity based compensation 5,834 4,718

Loss on early extinguishment of debt — 202

Deferred rent receivable ( 348 ) ( 529 )

8 unchanged sentences

Investment in financing leases — ( 10 )

Repayment of financing leases — 19

Escrows for acquisition and construction deposits ( 103 ) ( 273 )

8 unchanged sentences

Repayments of revolving credit facility ( 53,000 ) ( 128,000 )

Repayments from other financing activity — ( 53 )

Redemption of operating partnership units

Net proceeds from issuance of shares 26,690 11,446

3 unchanged sentences

Shares withheld for payment of taxes on restricted share vesting ( 467 ) ( 383 )

Other financing activities — ( 10 )

Distributions and dividends ( 24,362 ) ( 21,566 )

1 unchanged sentence

Net increase (decrease) in Cash and Escrows and Reserves

825 ( 4,984 )

Cash and Escrows and Reserves at the beginning of year 2,042 7,026

1 unchanged sentence

Supplemental Disclosure of Non-Cash Investing and Financing Activities

OP Units issued for property acquisitions $ 9,433 $ 15,511

Unrealized gain (loss) on interest rate swaps, net $ 8,249 $ 960

Operating partnership units issued for property acquisitions

$ 9,619 $ 9,433

Unrealized (loss) gain on interest rate swaps, net

$ ( 3,500 ) $ 8,249

Reallocation of non-controlling interest $ 3,369 $ 1,730

OP Units issue for business acquisition $ 1,451 $ —

Operating partnership units issue for business acquisition $ — $ 1,451

Reclassification of acquisition deposits included in prepaid expenses and other assets $ 210 $ 696

4 unchanged sentences

Accrued costs of capital included in accounts payable and accrued expenses $ 130 $ 107

Reclassification of cost of capital included in prepaid expenses and other assets $ — $ 137

The accompanying notes are an integral part of these consolidated financial statements.

15 unchanged sentences

The Company's properties are leased primarily to a single tenant, the United States Postal Service (the "USPS").

In addition, through its taxable REIT subsidiary (“TRS”), Real Estate Asset Counseling, LLC (formerly known as Postal Realty Management TRS, LLC) (“REAC”), the Company provides fee-based third party property management services for an additional 397 properties, which are owned by Andrew Spodek, the Company's chief executive officer ("CEO"), and his affiliates, and certain advisory services to third-party owners of postal properties.

The Company also owns several, and may in the future further acquire, land parcels that may be added to existing or future leases with the USPS or used for other purposes that are consistent with the Company’s investment strategy.

In addition, through its taxable REIT subsidiary (“TRS”), Real Estate Asset Counseling, LLC (“REAC”), the Company provides fee-based third party property management services for an additional 397 properties, which are owned by Andrew Spodek, the Company's chief executive officer ("CEO"), and his affiliates, and certain advisory services to third-party owners of postal properties.

Pursuant to the Company’s articles of amendment and restatement, the Company is currently authorized to issue up to 500,000,000 shares of Class A common stock, 27,206 shares of Class B common stock, $ 0.01 par value per share (the “Voting Equivalency stock”), and up to 100,000,000 shares of preferred stock.

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REITs are subject to a number of organizational and operational requirements.

Additionally, any income earned by the TRS and any other TRS the Company may form in the future will be subject to federal, state and local corporate income tax.

Pursuant to the Jumpstart Our Business Startups Act, the Company qualifies as an emerging growth company (“EGC”).

4 unchanged sentences

The Company consolidates the Operating Partnership, a VIE in which the Company is considered the primary beneficiary.

The primary beneficiary is the entity that has (i) the power to direct the activities that most significantly impact the entity’s economic performance and (ii) the obligation to absorb losses of the VIE or the right to receive benefits from the VIE that could be significant to the VIE.

Substantially all of the assets and liabilities of the Company relate to the Operating Partnership.

The primary beneficiary is the entity that has (i) the power to direct the activities that most significantly impact the

POSTAL REALTY TRUST, INC.

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

entity’s economic performance and (ii) the obligation to absorb losses of the VIE or the right to receive benefits from the VIE that could be significant to the VIE.

Substantially all of the assets and liabilities of the Company relate to the Operating Partnership.

A non-controlling interest is defined as the portion of the equity in an entity not attributable, directly or indirectly, to the Company.

7 unchanged sentences

Offering and Other Costs

Offering costs are recorded in “Total Stockholders’ Equity” in the Consolidated Balance Sheets as a reduction of additional paid-in capital.

Offering costs are recorded in “Total Stockholders’ Equity” on the Consolidated Balance Sheets as a reduction of additional paid-in capital.

Segment Reporting

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The acquired above or below-market lease intangibles are amortized to “Rental income” over the applicable lease term, inclusive of any option periods for below-market leases.

Deferred Costs

Financing costs related to the issuance of the Company’s long-term debt, including the term loan facility component of the Company's existing credit facilities (the “Credit Facilities”), are deferred and amortized as an increase to interest expense over the term of the related debt instrument using the straight-line method, which approximates the effective interest rate method, and are reported as a reduction of the related debt balance on the Consolidated Balance Sheets.

Deferred financing costs related to the revolving credit facility component (the "2021 Revolving Credit Facility") of the Credit Facilities are

POSTAL REALTY TRUST, INC.

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

deferred and amortized as an increase to interest expense over the terms of the 2021 Revolving Credit Facility and are included in “Prepaid expenses and other assets, net” on the Consolidated Balance Sheets.

Deferred Costs

Deferred financing costs related to the revolving credit facility component (the "Revolving Credit Facility") of the Credit Facilities are deferred and amortized as an increase to interest expense over the terms of the Revolving Credit Facility and are included in “Prepaid expenses and other assets, net” on the Consolidated Balance Sheets.

Cash and Escrows and Reserves

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In addition, certain lease agreements provide for reimbursements from tenants for real estate taxes and other recoverable costs, which are recorded on an accrual basis as part of “Rental income” in the Consolidated Statements of Operations and Comprehensive Income.

The Company’s determination of the probability to collect lease payments is impacted by numerous factors, including the Company's assessment of the tenant’s credit worthiness, economic conditions, historical experience with the tenant, future prospects for the tenant and the length of the lease term.

If leases currently classified as probable are subsequently reclassified as not probable, any outstanding lease receivables (including straight-line rent receivables) would be written-off with a corresponding decrease in rental income.

The Company’s determination of the probability to collect lease payments is impacted by numerous factors, including the Company's assessment of the tenant’s creditworthiness, economic conditions, historical experience with the tenant, future prospects for the tenant and the length of the lease term.

If leases currently classified as probable of collection are subsequently reclassified as not probable, any outstanding lease receivables (including straight-line rent receivables) would be written-off with a corresponding decrease in rental income.

For certain leases with lease incentive costs, such costs are included in “Prepaid expenses and other assets, net” on the Consolidated Balance Sheets and amortized on a straight-line basis over the respective lease terms as a reduction of rental revenues.

Fee and other primarily consists of (i) property management fees, (ii) income recognized from properties accounted for as financing leases and (iii) fees earned from providing advisory services to third-party owners of postal properties.

3 unchanged sentences

At lease inception, the Company records an asset within "Investment in financing leases, net" on the Consolidated Balance Sheets, which represents the Company’s net investment in the direct financing lease.

This initial net investment is determined by aggregating the total future minimum lease payments attributable to the direct financing leases and the estimated residual value of the property, if any, less unearned income.

Over the lease term, the investment in the direct financing lease is reduced and income is recognized as revenue in “Fee and other” in the Consolidated Statements of Operations and Comprehensive Income and produces a constant periodic rate of return on the investment in financing leases, net.

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.

Over the lease term, the investment in the direct financing lease is reduced and interest is recognized as revenue in “Fee and other” in the Consolidated Statements of Operations and Comprehensive Income and produces a constant periodic rate of return on the "Investment in financing leases, net."

POSTAL REALTY TRUST, INC.

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

Revenue from advisory services is generated from service contracts generally based on (i) time and expense arrangements (where the Company recognizes revenues based on hours incurred and contracted rates), (ii) fixed-fee arrangements (where the Company recognizes revenues earned to date by applying the proportional performance method) or (iii) performance-based or contingent arrangements (where the Company recognizes revenues at a point in time when the client receives the benefit of the promised service).

3 unchanged sentences

Goodwill represents the excess of the purchase price over the fair value of net assets acquired, including the amount assigned to identifiable intangible assets.

Intangible assets may

POSTAL REALTY TRUST, INC.

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

include customer relationships, trademarks and acquired software.

Intangible assets may include customer relationships, trademarks and acquired software.

Identifiable intangible assets with finite lives are amortized over their expected useful lives.

22 unchanged sentences

Fair Value Measurements

POSTAL REALTY TRUST, INC.

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

The following disclosure of estimated fair value was determined by management using available market information and appropriate valuation methodologies.

4 unchanged sentences

The fair value of the Company’s borrowings under its Credit Facilities approximates carrying value because such borrowings are subject to a variable market rate, which reprices frequently.

The fair value was determined using the Adjusted Term SOFR (as defined below) as of December 31, 2022, and London Interbank Offered Rate (“LIBOR”) as of December 31, 2021, plus an applicable spread under the Credit Facilities, a Level 2 classification in the fair value hierarchy.

The fair value was determined using the Adjusted Term SOFR (as defined below) as of December 31, 2023 and December 31, 2022, plus an applicable spread under the Credit Facilities, a Level 2 classification in the fair value hierarchy.

The fair value of the Company’s secured borrowings aggregated approximately $ 28.0 million and $ 27.5 million as compared to the principal balance of $ 33.0 million and $ 33.1 million as of December 31, 2023 and 2022, respectively.

The fair value of the Company’s

POSTAL REALTY TRUST, INC.

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

secured debt was categorized as a Level 3 basis (as provided by ASC 820, Fair Value Measurements and Disclosures).

The fair value of the mortgage debt was determined by discounting the future contractual interest and principal payments by a market rate.

The Company's derivative assets, comprised of interest rate swap derivative instruments entered into in connection with the Credit Facilities, are recorded at fair value based on a variety of observable inputs, including contractual terms, interest rate curves, yield curves, measure of volatility, and correlations of such inputs.

The Company measures its derivatives at fair value on a recurring basis based on the expected size of future cash flows on a discounted basis and incorporating a measure of non-performance risk.

The fair value of the Company's derivative assets was categorized as a Level 2 basis (as provided by ASC 820, Fair Value Measurements and Disclosures).

The Company considers its own credit risk, as well as the credit risk of its counterparties, when evaluating the fair value of its derivative assets.

As of December 31, 2022 and 2021, the fair value of the Company’s interest rate swap derivative instruments was approximately $ 9.2 million and $ 1.0 million, respectively, included in “Prepaid expenses and other assets, net” on the Consolidated Balance Sheets.

Disclosure about fair value of assets and liabilities is based on pertinent information available to management as of December 31, 2022 and 2021.

The fair value of the Company’s secured borrowings was categorized as a Level 3 fair value estimate (as provided by ASC 820, Fair Value Measurements and Disclosures) and was determined by discounting the future contractual interest and principal payments by a market rate.

The Company's derivative assets and liabilities, comprised of interest rate swap derivative instruments entered into in connection with the Credit Facilities, are recorded at fair value based on a variety of observable inputs, including contractual terms, interest rate curves, yield curves, measure of volatility and correlations of such inputs.

The Company measures its derivatives at fair value on a recurring basis based on the expected amount of future cash flows on a discounted basis and incorporating a measure of non-performance risk.

The fair value of the Company's derivative assets and liabilities was categorized as a Level 2 fair value estimate (as provided by ASC 820, Fair Value Measurements and Disclosures).

The Company considers its own credit risk, as well as the credit risk of its counterparties, when evaluating the fair value of its derivative assets and liabilities.

As of December 31, 2023 and 2022, the fair value of the Company’s interest rate swap derivative assets was approximately $ 6.4 million and $ 9.2 million, respectively, included in “Prepaid expenses and other assets, net” on the Consolidated Balance Sheets.

As of December 31, 2023, the fair value of the Company's interest rate swap derivative liabilities was approximately $ 0.7 million included in "Accounts payable, accrued expenses and other, net" on the Consolidated Balance Sheets.

Disclosures about fair value of assets and liabilities are based on pertinent information available to management as of December 31, 2023 and 2022.

Although management is not aware of any factors that would significantly affect the fair value amounts, such amounts have not been comprehensively revalued for purposes of these financial statements since December 31, 2023 and current estimates of fair value may differ significantly from the amounts presented herein.

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An impairment loss is measured based on the excess of the asset’s carrying amount over its estimated fair value.

Impairment analyses will be based on current plans, intended holding periods and available market information at the time the analyses are prepared.

Impairment analyses will be based on current plans, intended holding periods and available market information at the

POSTAL REALTY TRUST, INC.

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

time the analyses are prepared.

If estimates of the projected future cash flows, anticipated holding periods or market conditions change, the evaluation of impairment losses may be different and such differences may be material.

6 unchanged sentences

The ability of the USPS to honor the terms of its leases is dependent upon regulatory, economic, environmental or competitive conditions in Pennsylvania or other regions where the Company operates in and could have a material effect on the Company’s overall business results.

POSTAL REALTY TRUST, INC.

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

The Company has deposited cash and maintains its bank deposits with large financial institutions in amounts that, from time to time, exceed federally insured limits.

2 unchanged sentences

Non-controlling interests in the Company represent OP Units held by the Company’s prior investors and certain sellers of properties to the Company and long term incentive units of the Operating Partnership ("LTIP Units") held by the Company’s CEO and certain other employees and the Company's Board of Directors.

Stockholder’s Equity for further details.

Stockholders’ Equity for further details.

Equity-Based Compensation

1 unchanged sentence

Equity-classified stock awards granted to employees and non-employees that have a service condition and/or a market condition are measured at fair value at date of grant and remeasured at fair value only upon a modification of the award.

The Company records forfeitures as they occur.

The Company recognizes compensation expense on a straight-line basis over the requisite service period of each award, with the amount of compensation expense recognized at the end of a reporting period at least equal the portion of fair value of the respective award at grant date or modification date, as applicable, that has vested through that date.

The Company records forfeitures as a reduction of equity-based compensation expense as such forfeitures occur.

The Company recognizes compensation expense on a straight-line basis over the requisite service period of each award, with the amount of compensation expense recognized at the end of a reporting period at least equal to the portion of fair value of the respective award at grant date or modification date, as applicable, that has vested through that date.

For awards with a market condition, compensation cost is not reversed if a market condition is not met so long as the requisite service has been rendered, as a market condition does not represent a vesting condition.

Stockholder’s Equity for further details.

Stockholders’ Equity for further details.

Insurance Accounting

5 unchanged sentences

The Company calculates earnings per share ("EPS") based upon the weighted average shares outstanding less issued and outstanding non-vested shares of Class A common stock.

As of December 31, 2022 and 2021, the Company had unvested restricted shares of Class A common stock, LTIP Units and certain restricted stock units (“RSUs"), which provide for non-forfeitable rights to dividend and dividend-equivalent payments.

As of December 31, 2023 and 2022, the Company had unvested restricted shares of Class A common stock, LTIP Units and certain restricted stock units (“RSUs"), which provide for non-

POSTAL REALTY TRUST, INC.

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

forfeitable rights to dividend and dividend-equivalent payments.

Accordingly, these unvested restricted shares of Class A common stock, LTIP Units and RSUs are considered participating securities and are included in the computation of basic and diluted EPS pursuant to the two-class method.

2 unchanged sentences

Recently Adopted Accounting Pronouncements

In February 2016, the FASB issued ASU 2016-2, Leases;

in July 2018, the FASB issued ASU 2018-10, Codification Improvements to Topic 842, Leases, and ASU 2018-11, Leases — Targeted Improvements;

and in December 2018, the FASB issued ASU 2018-20, Narrow-Scope Improvements for Lessors.

This group of ASUs is collectively referred to as Topic 842.

Topic 842 supersedes the existing standards for lease accounting (Topic 840, Leases).

Topic 842 was effective for the Company on January 1, 2021 as a result of its classification as an EGC.

The Company elected to utilize the following practical expedients provided by Topic 842, including:

the package of practical expedients that allows an entity not to reassess upon adoption (i) whether an expired or existing contract contains a lease, (ii) whether a lease classification related to expired or existing lease arrangements, and (iii) whether costs incurred on

POSTAL REALTY TRUST, INC.

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

expired or existing leases qualify as initial direct costs, and as a lessor, the practical expedient not to separate certain non-lease components, such as common area maintenance, from the lease component if the timing and pattern of transfer are the same for the non-lease component and associated lease component, and the lease component would be classified as an operating lease if accounted for separately.

Topic 842 requires lessees to record most leases on their balance sheet through a right-of-use (“ROU”) model, in which a lessee records a ROU asset and a lease liability on their balance sheet.

Leases that are less than 12 months do not need to be accounted for under the ROU model.

Lessees will account for leases as financing or operating leases, with the classification affecting the timing and pattern of expense recognition in the income statement.

Lease expense will be recognized based on the effective interest method for leases accounted for as finance leases and on a straight-line basis over the term of the lease for leases accounted for as operating leases.

The accounting by a lessor under Topic 842 is largely unchanged from that of Topic 840.

Under Topic 842, lessors will continue to account for leases as a sales-type, direct-financing, or operating.

A lease will be treated as a sale if it is considered to transfer control of the underlying asset to the lessee.

A lease will be classified as direct-financing if risks and rewards are conveyed without the transfer of control.

Otherwise, the lease is treated as an operating lease.

Topic 842 requires accounting for a transaction as a financing in a sale leaseback in certain circumstances, including when the seller-lessee is provided an option to purchase the property from the landlord at the tenant’s option.

Topic 842 also includes the concept of separating lease and non-lease components.

Under Topic 842, non-lease components, such as common area maintenance, would be accounted for under Topic 606 and separated from the lease payments.

However, the Company elected the lessor practical expedient allowing the Company to not separate these components when certain conditions are met.

With this election, effective on January 1, 2021, the Company combined tenant reimbursements with rental income on its Consolidated Statements of Operations and Comprehensive Income.

In December 2022, the FASB issued ASU 2022-06, Deferral of the Sunset Date of Topic 848 (“ASU 2022-06”) which was issued to defer the sunset date of Reference Rate Reform (topic 848):

In December 2022, the FASB issued ASU No.

2022-06, Deferral of the Sunset Date of Topic 848, which was issued to defer the sunset date of Reference Rate Reform (Topic 848):

Facilitation of the Effects of Reference Rate Reform to December 31, 2024.

ASU 2022-06 is effective immediately for all companies.

ASU 2022-06 had no impact on the Company's Consolidated Financial Statements for the year ended December 31, 2022.

Future Application of Accounting Standards

2022-06 is effective immediately for all companies.

2022-06 had no impact on the Company's Consolidated Financial Statements for the years ended December 31, 2023 and December 31, 2022.

In September 2016, the FASB issued ASU No.

2 unchanged sentences

2018-19, Codification Improvements to Topic 326, Financial Instruments - Credit Losses.

The guidance changes how entities measure credit losses for most financial assets and certain other instruments that are not measured at fair value through net income.

The guidance changed how entities measure credit losses for most financial assets and certain other instruments that are not measured at fair value through net income.

The guidance replaced the previous "incurred loss" model with an "expected loss" approach.

2 unchanged sentences

This guidance became effective for the Company and was adopted by the Company on January 1, 2023.

Upon adoption of this guidance, the Company had two direct financing leases with a net investment balance aggregating approximately $ 16.1 million prior to any credit loss adjustment.

The Company had two direct financing leases with a net investment balance aggregating approximately $ 16.0 million as of December 31, 2023 prior to any credit loss adjustment.

Historically, the Company has had no collection issues related to these direct financing leases and its other leases in which the Company is the lessor;

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Based on the aforementioned, the Company did not recognize any credit loss adjustment for such leases.

Future Application of Accounting Standards

In November 2023, the FASB issued ASU No.

2023-07, Segment Reporting (Topic 280) - Improvements to Reportable Segment Disclosures.

2023-07 improves disclosures about public entities' reportable segments and addresses requests from investors for additional, more detailed information about a reportable segment's expenses.

The provisions in this amendment are applicable to public entities with a single reportable segment.

The standard is effective for fiscal years beginning after December 15, 2023, and interim periods within fiscal years beginning after December 15, 2024, with early adoption permitted.

The Company has one reportable segment and continues to evaluate additional disclosures that may be required for entities with a single reportable segment.

Real Estate Acquisitions

The following tables summarizes the Company’s acquisitions for the years ended December 31, 2023 and 2022.

The purchase prices including transaction costs were allocated to the separately identifiable tangible and intangible assets and

POSTAL REALTY TRUST, INC.

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

liabilities based on their relative fair values at the date of acquisition.

The purchase prices including transaction costs were allocated to the separately identifiable tangible and intangible assets and liabilities based on their relative fair values at the date of acquisition.

The total purchase price including transaction costs was allocated as follows (in thousands, except for the number of properties):

9 unchanged sentences

223 $ 16,054 $ 61,952 $ 603 $ 5,547 $ 130 $ ( 3,863 ) $ ( 363 ) $ 80,060

POSTAL REALTY TRUST, INC.

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

Three Months Ended Number of Properties Land Building and Improvements Tenant Improvements In-place lease intangibles Above- market leases Below- market leases Other (7)

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Explanatory Notes :

(1) Includes an intangible liability related to unfavorable operating leases with purchase options on two properties during the three months ended September 30, 2023 and an above market ground lease intangible liability on one property during the three months ended December 31, 2023 that is each included in “Accounts payable, accrued expenses and other” on the Consolidated Balance Sheets.

(2) Includes closing costs of approximately $ 0.3 million for the three months ended March 31, 2023, approximately $ 0.2 million for the three months ended June 30, 2023, approximately $ 0.7 million for the three months ended September 30, 2023 and approximately $ 0.6 million for the three months ended December 31, 2023.

(3) Includes the acquisition of 39 properties in various states for cash consideration in individual or portfolio transactions for a price of approximately $ 17.6 million, including closing costs.

(4) Includes the acquisition of 39 properties in various states in individual or portfolio transactions for a price of approximately $ 16.0 million, including closing costs, which was funded with both the issuance of OP Units to the sellers (valued at approximately $ 0.5 million using the share price of Class A common stock on the date of each issuance of such OP Units) and cash consideration.

(5) Includes the acquisition of 70 properties in various states in individual or portfolio transactions for a price of approximately $ 24.8 million, including closing costs, which was funded with both the issuance of OP Units to the sellers (valued at approximately $ 2.8 million using the share price of Class A common stock on the date of each issuance of such OP Units) and cash consideration.

(6) Includes the acquisition of 75 properties in various states in individual or portfolio transactions for a price of approximately $ 21.6 million, including closing costs, which was funded with both the issuance of OP Units to the sellers (valued at approximately $ 6.3 million using the share price of Class A common stock on the date of each issuance of such OP Units) and cash consideration.

The aggregate purchase price for the quarter includes several land parcels that the Company acquired for approximately $0.4 million, which may in the future be added to existing or future leases with the USPS or used for other purposes that are consistent with the Company’s investment strategy.

(7) Includes an intangible liability related to unfavorable operating leases on two properties during the three months ended March 31, 2022 that is included in “Accounts payable, accrued expenses and other” on the Consolidated Balance Sheets.

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(8) Includes closing costs of approximately $ 0.6 million for the three months ended March 31, 2022, approximately $ 1.7 million for the three months ended June 30, 2022, approximately $ 0.5 million for the three months ended September 30, 2022 and approximately $ 0.5 million for the three months ended December 31, 2022.

(3) Includes the acquisition of 50 properties in various states in individual or portfolio transactions for a price of approximately $ 27.6 million, including closing costs, which was funded with both the issuance of OP Units to the sellers as non-cash consideration (valued at approximately $ 1.8 million using the share price of Class A common stock on the date of each issuance of such OP Units) and borrowings under the Credit Facilities.

(4) Includes the acquisition of 150 properties in various states in individual or portfolio transactions for a price of approximately $ 56.7 million, including closing costs, which was funded with both the issuance of OP Units to the sellers as non-cash consideration (valued at approximately $ 2.0 million using the share price of Class A common stock on the date of each issuance of such OP Units) and borrowings under the Credit Facilities.

(5) Includes the acquisition of 66 properties in various states in individual or portfolio transactions for a price of approximately $ 21.3 million, including closing costs, which was funded with both the issuance of OP Units to the sellers as non-cash consideration (valued at approximately $ 4.7 million using the share price of Class A common stock on the date of each issuance of such OP Units) and borrowings under the Credit Facilities.

(6) Includes the acquisition of 54 properties in various states in individual or portfolio transactions for a price of approximately $ 20.7 million, including closing costs, which was funded with both the issuance of OP Units to the sellers as non-cash consideration (valued at approximately $ 0.9 million using the share price of Class A common stock on the date of each issuance of such OP Units) and borrowings under the Credit Facilities.

(7) Represents an insurance receivable assigned to the Company related to a property in a small portfolio that was destroyed by arson prior to acquisition by the Company during the three months ended March 31, 2021.

The Company completed rebuilding such property which remained under lease to the USPS in the three months ended December 31, 2021 primarily using the insurance proceeds assigned by the seller to the Company.

The insurance proceeds were received in April 2021.

Also includes an intangible liability related to an unfavorable operating lease on a property acquired during the three months ended June 30, 2021 that is included in “Accounts payable, accrued expenses and other” on the Consolidated

(9) Includes the acquisition of 50 properties in various states in individual or portfolio transactions for approximately $ 27.6 million, including closing costs, which was funded with both the issuance of OP Units to the sellers as non-cash consideration (valued at approximately $ 1.8 million using the share price of Class A common stock on the date of each issuance of such OP Units) and cash consideration.

(10) Includes the acquisition of 150 properties in various states in individual or portfolio transactions for approximately $ 56.7 million, including closing costs, which was funded with both the issuance of OP Units to the sellers as non-cash

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NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

Balance Sheets.

During the three months ended September 30, 2021, includes a below-market ground lease intangible asset.

During the three months ended December 31, 2021, includes an intangible liability related to unfavorable operating leases on two properties that is included in “Accounts Payable, accrued expenses and other” on the Consolidated Balance Sheets.

(8) Includes closing costs of $ 0.5 million for the three months ended March 31, 2021, $ 0.9 million for the three months ended June 30, 2021, $ 0.5 million for the three months ended September 30, 2021 and $ 0.8 million for the three months ended December 31, 2021.

(9) Includes the acquisition of 54 properties in various states in individual or portfolio transactions for approximately $ 26.2 million, including closing costs, which was funded with borrowings under the Company's previous credit facility.

(10) Includes the acquisition of 71 properties in various states in individual or portfolio transactions for approximately $ 31.3 million, including closing costs, which was funded with both the issuance of OP Units to the sellers as non-cash consideration (valued at approximately $ 9.0 million using the share price of Class A common stock on the date of each issuance of such OP Units) and borrowings under the Company's previous credit facility.

(11) Includes the acquisition of 59 properties in various states in individual or portfolio transactions for approximately $ 19.6 million, including closing costs, which was funded with both the issuance of OP Units to the sellers as non-cash consideration (valued at approximately $ 6.5 million using the share price of Class A common stock on the date of each issuance of such OP Units) and borrowings under the Credit Facilities and, prior to its termination, the Company's previous credit facility.

(12) Includes the acquisition of 54 properties in various states in individual or portfolio transactions for approximately $ 28.7 million, including closing costs, which was funded with borrowings under the Credit Facilities.

In addition, the Company closed on one property accounted for as a direct financing lease and is included in “Investment in financing leases, net” on the Consolidated Balance Sheets.

consideration (valued at approximately $ 2.0 million using the share price of Class A common stock on the date of each issuance of such OP Units) and cash consideration.

(11) Includes the acquisition of 66 properties in various states in individual or portfolio transactions for approximately $ 21.3 million, including closing costs, which was funded with both the issuance of OP Units to the sellers as non-cash consideration (valued at approximately $ 4.7 million using the share price of Class A common stock on the date of each issuance of such OP Units) and cash consideration.

(12) Includes the acquisition of 54 properties in various states in individual or portfolio transactions for approximately $ 20.7 million, including closing costs, which was funded with both the issuance of OP Units to the sellers as non-cash consideration (valued at approximately $ 0.9 million using the share price of Class A common stock on the date of each issuance of such OP Units) and cash consideration.

Intangible Assets and Liabilities

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This amortization is included in “Depreciation and amortization” in the Consolidated Statements of Operations and Comprehensive Income.

Amortization of acquired above market leases was $ 0.1 million and $ 0.03 million for the years ended December 31, 2022 and 2021, respectively, and is included in “Rental income” on the Consolidated Statements of Operations and Comprehensive Income.

Amortization of acquired above market leases was $ 0.2 million and $ 0.1 million for the years ended December 31, 2023 and 2022, respectively, and is included in “Rental income” in the Consolidated Statements of Operations and Comprehensive Income.

Amortization of acquired below market leases was $ 2.6 million and $ 2.3 million for the years ended December 31, 2023 and 2022, respectively, and is included in “Rental income” in the Consolidated Statements of Operations and Comprehensive Income.

As of December 31, 2023, the weighted average amortization period for the Company’s intangible assets was approximately 2.9 years, 2.3 years and 8.8 years for in-place lease intangibles, above-market leases and below-market leases, respectively.

POSTAL REALTY TRUST, INC.

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

As of December 31, 2022, the weighted average amortization period for the Company’s intangible assets was approximately 3.2 years, 3.3 years and 8.8 years for in-place lease intangibles, above-market leases and below-market leases, respectively.

Future amortization/accretion of these intangibles is below (in thousands):

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Revolving Credit Facility (1) :

2021 Revolving Credit Facility $ — $ 13,000 SOFR + 150 bps (2)

Revolving Credit Facility

$ 9,000 $ — SOFR + 148 bps (2)

2021 Term Loan 75,000 50,000 SOFR + 143 bps (2)

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Explanatory Notes:

(1) On August 9, 2021, the Company entered into the Credit Facilities, which included the $ 150.0 million 2021 Revolving Credit Facility and the $ 50.0 million 2021 Term Loan.

(1) On August 9, 2021, the Company entered into the Credit Facilities, which initially included the $ 150.0 million Revolving Credit Facility and the $ 50.0 million 2021 Term Loan.

On May 11, 2022, the Company amended the Credit Facilities (the "First Amendment") to, among other things, add a new $ 75.0 million senior unsecured delayed draw term loan facility (the "2022 Term Loan" and, together with the 2021 Term Loan, the "Term Loans"), replace the LIBOR with the Secured Overnight Financing Rate ("SOFR") as the benchmark interest rate and allow for a decrease in the applicable margin by 0.02 % if the Company achieves certain sustainability targets.

The Credit Facilities include an accordion feature which will permit the Company to borrow up to an additional $ 150.0 million under the 2021 Revolving Credit Facility and up to an additional $ 35.0 million under the Term Loans (after exercise of the $ 40.0 million term loan accordion in December 2022), in each case subject to customary terms and conditions.

The 2021 Revolving Credit Facility matures in January 2026, which may be extended for two six-month periods subject to customary conditions, the 2021 Term Loan matures in January

On December 6, 2022, the Company exercised $ 40.0 million of term loan accordion under the 2022 Term Loan.

On July 24, 2023, the Company amended the Credit Facilities (the "Second Amendment") to, among other things, add a daily simple 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.

The Credit Facilities include an accordion feature which permits the Company to borrow up to an additional $ 150.0 million under the Revolving Credit Facility subject to customary terms and conditions.

As of December 31, 2023, the accordion feature under the Term Loans has been fully exercised.

The Revolving Credit Facility matures in January 2026,

POSTAL REALTY TRUST, INC.

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

2027 and the 2022 Term Loan matures in February 2028.

which may be extended for two six-month periods subject to customary conditions, the 2021 Term Loan matures in January 2027 and the 2022 Term Loan matures in February 2028.

Borrowings under the Credit Facilities carry an interest rate of, (i) in the case of the Revolving Credit Facility, either a base rate plus a margin ranging from 0.5 % to 1.0 % per annum or Adjusted Term SOFR (as defined below) plus a margin ranging from 1.5 % to 2.0 % per annum, or (ii) in the case of the Term Loans, either a base rate plus a margin ranging from 0.45 % to 0.95 % per annum or Adjusted Term SOFR plus a margin ranging from 1.45 % to 1.95 % per annum, in each case depending on the Company's consolidated leverage ratio.

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The Credit Facilities contain a number of customary financial and non-financial covenants.

During the years ended December 31, 2022 and 2021, the Company incurred $ 0.3 million and $ 0.1 million, respectively, of unused facility fees related to its previous credit facility and the 2021 Revolving Credit Facility.

During the years ended December 31, 2023 and 2022, the Company incurred $ 0.3 million and $ 0.3 million, respectively, of unused facility fees related to the Revolving Credit Facility.

As of December 31, 2023, the Company was in compliance with all of the Credit Facilities’ debt covenants.

(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”).

(3) Five properties are collateralized under this loan as of December 31, 2022 and Mr.

Upon the Company's 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.

Spodek also provided a personal guarantee of payment for 50% of the outstanding amount thereunder.

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(7) The loan is secured by a first mortgage lien on an industrial property located in Warrendale, Pennsylvania.

The loan has a fixed interest rate of 2.80 % with interest-only payments for the first five years and fixed payments of principal and interest thereafter based on a 30-year amortization schedule.

The loan has a fixed interest rate of 2.80 % with interest-only payments for the first five years (ending in January 2026) and fixed payments of principal and interest thereafter based on a 30-year amortization schedule.

The weighted average maturity date for the Company's indebtedness as of December 31, 2023 and 2022 was approximately 4.2 years and 5.5 years, respectively.

6 unchanged sentences

Total $ 241,988

POSTAL REALTY TRUST, INC.

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

Derivatives and Hedging Activities

The Company has five interest rate swaps with a total notional amount of $ 165.0 million that are used to manage its interest rate risk and fix the SOFR component on the Credit Facilities.

Within the $ 165.0 million, $ 50.0 million of the swaps mature in January 2027 and fix the interest rate of the 2021 Term Loan at 2.291 % as of December 31, 2022.

An additional $ 50.0 million of the swaps mature in February 2028 and fix the first $ 50.0 million amount outstanding under the 2022 Term Loan at 4.237 % as of December 31, 2022.

An additional $ 25.0 million of the swaps mature in February 2028 and fix the additional $ 25.0 million amount outstanding under the 2022 Term Loan at 4.81 % as of December 31, 2022.

The remaining $ 40.0 million of the swaps mature in February 2028 and fix the remaining $ 40.0 million amount outstanding under the 2022 Term Loan at 4.952 % as of December 31, 2022.

As of December 31, 2023, the Company had seven interest rate swaps with a total notional amount of $ 200.0 million that are used to manage its interest rate risk and fix the SOFR component on the Term Loans of the Credit Facilities:

Notional Amount ( $ in thousands)

Fixed Rate (1)

Effective Date Maturity Date

$ 50,000 2.27 % May 2022 January 2027

$ 25,000 4.217 % May 2022 February 2028

$ 25,000 4.79 % July 2022 February 2028

$ 40,000 4.932 % December 2022 February 2028

$ 25,000 5.736 % July 2023 January 2027

$ 10,000 6.049 % September 2023 February 2028

Explanatory Note :

(1) Reflects the all-in effective interest rate for the specified portion of the Term Loans hedged by the interest rate swaps.

The Company’s objectives in using the interest rate derivatives are to add stability to interest expense and to manage its exposure to interest rate movements.

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The Company does not use derivatives for trading or speculative purposes and currently does not have any derivatives that are not designated as hedges.

The table below presents the effect of the Company’s interest rate swap derivative instruments on the Consolidated Statements of Operations and Comprehensive Income for the years ended December 31, 2022 and 2021 (in thousands).

The table below presents the effect of the Company’s interest rate swap derivative instruments in the Consolidated Statements of Operations and Comprehensive Income for the years ended December 31, 2023 and 2022 (in thousands):

Years Ended December 31,

1 unchanged sentence

Amount of gain recognized on derivative in "Accumulated other comprehensive income" $ 1,115 $ 8,604

Amount of gain (loss) reclassified from "Accumulated other comprehensive income" into interest expense $ ( 355 ) $ 151

Interest expense, net presented in the Consolidated Statements of Operations and Comprehensive Income, in which the effects of cash flow hedges are recorded, totaled $ 6.0 million and $ 3.7 million for the years ended December 31, 2022 and 2021, respectively.

As of December 31, 2022, the Company did not have any derivatives in a net liability position and did not post any collateral related to these agreements.

If the Company had breached any of these provisions as of December 31, 2022, it could have been required to settle its obligations under the agreements at their termination value.

Amount of income (loss) reclassified from "Accumulated other comprehensive income" into interest expense

$ ( 4,615 ) $ ( 355 )

POSTAL REALTY TRUST, INC.

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

"Interest expense, net" presented in the Consolidated Statements of Operations and Comprehensive Income, in which the effects of cash flow hedges are recorded, totaled $ 10.0 million and $ 6.0 million for the years ended December 31, 2023 and 2022, respectively.

Lessor Accounting

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Holdover rent is typically paid as the greater of estimated market rent or the rent amount due under the expired lease.

Purchase Option Provisions

As of December 31, 2022, operating leases for 60 of the Company’s properties provided the USPS with the option to purchase the underlying property either at fair market value or at fixed prices, in each case as of dates set forth in the lease

POSTAL REALTY TRUST, INC.

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

As of December 31, 2022, 57 of these properties acquired for an aggregate purchase price of approximately $ 44.8 million had an aggregate purchase option price of approximately $ 53.5 million and the remaining three properties acquired for an aggregate purchase price of approximately $ 2.6 million had purchase options exercisable at fair market value.

(3) In August 2023, the Company received notice from the USPS to terminate the lease for one property, which termination became effective in February 2024.

Purchase Option Provisions

As of December 31, 2023, operating leases for 74 of the Company’s properties provided the USPS with the option to purchase the underlying property either at fair market value or at fixed prices, in each case as of dates set forth in the lease agreement.

As of December 31, 2023, 70 of these properties had an aggregate carrying value of approximately $ 52.9 million with an aggregate purchase option price of approximately $ 67.9 million and the remaining four properties had an aggregate carrying value of approximately $ 2.9 million with purchase options exercisable at fair market value.

Investment in Financing Leases, Net

10 unchanged sentences

As a lessee, the Company has ground and office leases which were classified as operating leases.

On January 1, 2021 the Company adopted Topic 842 and recognized ROU assets of $ 1.2 million and lease liabilities of $ 1.2 million.

As of December 31, 2022, these leases had remaining terms, including renewal options, of one to 56 years and a weighted average remaining lease term of 22.6 years.

Operating ROU assets and lease liabilities are included in “Prepaid expenses and other assets, net” and “Accounts payable, accrued expense and other” on the Consolidated Balance Sheets as follows (in thousands):

As of December 31, 2023, these leases had remaining terms, including renewal options, of 0.4 years to 59 years and a weighted average remaining lease term of 23.3 years.

Operating right of use ("ROU") assets and lease liabilities are included in “Prepaid expenses and other

POSTAL REALTY TRUST, INC.

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

assets, net” and “Accounts payable, accrued expenses and other, net” on the Consolidated Balance Sheets as follows (in thousands):

As of December 31,

2023 As of December 31,

ROU asset – operating leases

$ 967 $ 1,010

Lease liability – operating leases

$ 994 $ 1,014

The difference between the recorded ROU assets and lease liabilities is mainly due to the reclassification of the below market ground lease intangible asset which was included within the ROU assets recognized upon transition.

Operating lease assets and liabilities are measured at the commencement date based on the present value of future lease payments.

As most of the Company’s leases do not provide an implicit rate, the Company uses its incremental borrowing

POSTAL REALTY TRUST, INC.

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

rate based on the information available at the commencement date in determining the present value of future payments.

As most of the Company’s leases do not provide an implicit rate, the Company uses its incremental borrowing rate based on the information available at the commencement date in determining the present value of future payments.

The Company used a discount rate ranging from 4.25 % to 7.35 % based on the yield of its current borrowings in determining its lease liabilities.

2 unchanged sentences

Operating lease expense for each of the twelve months ended December 31, 2023 and 2022 was $ 0.2 million.

Related Party Transactions for more details.

Future minimum lease payments to be paid by the Company as a lessee for operating leases as of December 31, 2023 for the next five years and thereafter are as follows (in thousands):

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REAC generates income, resulting in federal and state corporate income tax liability for REAC.

For the years ended December 31, 2022 and 2021, income tax benefit and income tax expense related to REAC was $ 3,670 and $ 0.1 million, respectively.

As of December 31, 2022 and 2021, the Company’s consolidated balance sheets reflect a liability for unrecognized tax benefits in the amounts of $ 0.02 million and $ 0.2 million, respectively, primarily related to the utilization of certain loss carryforwards by United Postal Holdings, Inc.

For the years ended December 31, 2023 and 2022, income tax expense and income tax benefit related to REAC was $ 0.1 million and 3,670 , respectively.

As of December 31, 2022, the Company’s Consolidated Balance Sheets reflected a liability for unrecognized tax benefits in the amount of $ 0.02 million primarily related to the utilization of certain loss carryforwards by United Postal Holdings, Inc.

("UPH") through May 16, 2019.

For the years ended December 31, 2022 and 2021, the Company has accrued interest and penalties of $ 0.01 million and $ 0.04 million, respectively.

These balances are included in the Consolidated Balance Sheets in "Accounts payable, accrued expenses and other liabilities".

As of December 31, 2022, the Company estimates that unrecognized tax benefits may decrease by approximately $ 0.02 million within twelve months of the balance sheet date due to expiring statutes of limitation.

In connection with the IPO, the Company recorded an indemnification asset for the unrecognized tax benefits due to an agreement from the indirect sole shareholder of UPH to reimburse the Company for such benefits.

Accordingly, the Company’s unrecognized tax benefits, if recognized, would result in a decrease to the indemnification asset and have no impact on the effective tax rate.

During the years ended December 31,

For the year ended December 31, 2022, the Company accrued interest and penalties of $ 0.01 million.

During the years ended December 31, 2023 and 2022, the Company reversed $ 0.02 million and

POSTAL REALTY TRUST, INC.

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

2022 and 2021, the Company reversed $ 0.2 million and $ 0.2 million, respectively, of unrecognized tax benefits inclusive of interest and penalties due to the expiration of statute of limitations, with an offsetting adjustment to the indemnification asset.

$ 0.2 million, respectively, of unrecognized tax benefits inclusive of interest and penalties due to the expiration of statute of limitations, with an offsetting adjustment to the indemnification asset.

A reconciliation of the beginning and ending amounts of unrecognized tax benefits is as follows (in thousands):

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These amounts are included in “Fee and other” in the Consolidated Statements of Operations and Comprehensive Income.

Accrued management fees receivable of $ 0.3 million and $ 0.3 million as of December 31, 2022 and 2021, respectively, are included in “Rents and other receivables” on the Consolidated Balance Sheets.

Accrued management fees receivable of $ 0.3 million and $ 0.3 million as of December 31, 2023 and 2022, respectively, are included in “Rent and other receivables” on the Consolidated Balance Sheets.

Related Party Lease

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Spodek’s interests with respect to the amount of debt he is guaranteeing (and the terms of any repayment or default) may not align with the Company's interests and could result in a conflict of interest.

Share Purchase

On November 16, 2021, Mr.

Spodek acquired 58,823 shares of the Company's Class A common stock at a price of $ 17.00 per share as a part of the Company's public offering of Class A common stock in November 2021.

POSTAL REALTY TRUST, INC.

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

Earnings Per Share

1 unchanged sentence

The following table presents a reconciliation of income from operations used in the basic and diluted EPS calculations (dollars in thousands, except share and per share data).

POSTAL REALTY TRUST, INC.

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

For the Years Ended December 31,

8 unchanged sentences

(1) Diluted EPS reflects the potential dilution of the conversion of obligations and the assumed exercises of securities including the effects of restricted shares and RSUs issued under the Company’s 2019 Equity Incentive Plan (the “Plan”) (See Note 11.

Stockholder’s Equity).

Stockholders’ Equity).

The effect of such shares and RSUs would not be dilutive and were not included in the computation of weighted average number of shares outstanding for the periods presented in the table above.

2 unchanged sentences

As such, the assumed conversion of these OP Units and LTIP Units would have no net impact on the determination of diluted EPS.

Stockholder’s Equity

On December 14, 2020, the Company entered into separate open market sale agreements for its at-the-market offering program (the "2020 ATM Program"), pursuant to which the Company may offer and sell, from time to time, shares of its Class A common stock having an aggregate sales price of up to $ 50.0 million.

On November 4, 2022, the Company terminated the 2020 ATM Program and 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 (the "2022 ATM Program"), pursuant to which the Company may offer and sell, from time to time, shares of its Class A common stock having an aggregate sales price of up to $ 50.0 million.

Stockholders’ Equity

On November 4, 2022, the Company 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 (the "ATM Program"), pursuant to which the Company may offer and sell, from time to time, shares of its Class A common stock having an aggregate sales price of up to $ 50.0 million.

The agreements also provide that the Company may enter into one or more forward sale agreements under separate master forward confirmations and related supplemental confirmations with affiliates of certain agents.

The following table summarizes the activity under the 2020 ATM Program and the 2022 ATM Program for the periods presented (dollars and shares issued in thousands, except per share amounts).

During the year ended December 31, 2022, 751,382 shares were issued under the 2020 ATM Program and the 2022 ATM Program.

On August 8, 2023, the Company 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 following table summarizes the activity under the ATM Program for the periods presented (dollars and shares issued in thousands, except per share amounts).

During the year ended December 31, 2023, 1,861,407 shares were issued under the ATM Program.

As of December 31, 2023, the Company had approximately $ 114.1 million remaining that may be issued under the ATM Program.

POSTAL REALTY TRUST, INC.

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

Years Ended December 31,

Shares issued (1)

Gross proceeds $ 11,869 $ 6,894

Fees and issuance costs 530 432

Net proceeds $ 11,339 $ 6,462

Gross proceeds received

$ 27,810 $ 11,869

Fees, issuance and other costs

Net proceeds received

$ 26,560 $ 11,339

Average gross sales price per share $ 14.94 $ 15.80

During the year ended December 31, 2022, the Company's Board of Directors approved and the Company declared and paid dividends of $ 21.6 million to Class A common stockholders, Voting Equivalency stockholders, OP unitholders and LTIP unitholders, or $ 0.925 per share or unit, as shown in the table below.

Explanatory Note:

(1) During the year ended December 31, 2023, the Company entered into forward sales transactions under the ATM Program for the sale of 798,847 shares of its Class A common stock, which were all subsequently settled during 2023.

Dividends and Distributions

POSTAL REALTY TRUST, INC.

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

During the year ended December 31, 2023, the Company's Board of Directors approved and the Company declared and paid dividends or distributions, as applicable, of $ 24.4 million to Class A common stockholders, Voting Equivalency stockholders, OP unitholders and LTIP unitholders, or $ 0.95 per share or unit, as shown in the table below.

Declaration Date Record Date Date Paid Amount Per Share or Unit

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October 23, 2023 November 1, 2023 November 30, 2023 $ 0.2375

During the year ended December 31, 2021, the Company's Board of Directors approved and the Company declared and paid dividends of $ 15.0 million to Class A common stockholders, Voting Equivalency stockholders, OP unitholders and LTIP unitholders, or $ 0.885 per share or unit, as shown in the table below.

During the year ended December 31, 2022, the Company's Board of Directors approved and the Company declared and paid dividends or distributions, as applicable, of $ 21.6 million to Class A common stockholders, Voting Equivalency stockholders, OP unitholders and LTIP unitholders, or $ 0.925 per share or unit, as shown in the table below.

Declaration Date Record Date Date Paid Amount Per Share or Unit

January 29, 2021 February 12, 2021 February 26, 2021 $ 0.2175

February 1, 2022 February 15, 2022 February 28, 2022 $ 0.2275

April 28, 2022 May 13, 2022 May 27, 2022 $ 0.2300

July 27, 2022 August 8, 2022 August 26, 2022 $ 0.2325

November 4, 2021 November 15, 2021 November 30, 2021 $ 0.2250

October 26, 2022 November 7, 2022 November 28, 2022 $ 0.2350

Non-controlling Interests

Non-controlling interests in the Company represent OP Units held by the Company’s prior investors and certain sellers of properties to the Company and LTIP Units primarily issued to the Company's CEO and the Board of Directors in connection with the IPO and/or in lieu of their cash compensation.

During the year ended December 31, 2022, the Company issued 118,389 LTIP Units in January 2022 to the Company's CEO for his 2021 incentive bonus, his election to defer 100 % of his 2022 annual salary and for long term incentive compensation, issued 38,174 LTIP Units in June 2022 to the Board of Directors for their annual retainers as compensation for their services as directors and issued 5,040 LTIP Units in July 2022 to a consultant under the consultancy agreement with the Company.

Non-controlling interests in the Company represent OP Units held by the Company’s prior investors and certain sellers of properties to the Company and LTIP Units primarily issued to the Company's employees and the Board of Directors in connection with the IPO and/or as a part of their compensation.

During the year ended December 31, 2023, the Company issued 143,288 LTIP Units to the Company's CEO for his 2022 incentive bonus, his election to defer 100 % of his 2023 annual salary and for long term incentive compensation, 75,489 LTIP Units to the Company’s president for his 2022 incentive bonus and his election to defer 50% of his 2023 annual salary, 57,057 LTIP Units to the Company's Chief Financial Officer for his 2022 incentive bonus and for long term incentive compensation, 40,635 LTIP Units to the Board of Directors for their annual retainers as compensation for their services as directors, 25,510 LTIP Units to an employee for his 2022 incentive bonus, his election to defer a portion of his 2023 annual salary and for long term incentive compensation and 8,447 LTIP Units to a consultant under the consultancy agreement with the Company.

In addition, during the years ended December 31, 2023 and 2022, the Company issued 693,648 and 661,398 OP Units, respectively, to certain contributors in connection with portfolio acquisitions (for further details, see Note 3.

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OP Units and shares of Class A common stock generally have the same economic characteristics, as they share equally in the total net income or loss and distributions of the Operating Partnership.

Beginning on or after the date which is 12 months after the later of (i) the completion of the IPO or (ii) the date on which a person first became a holder of common units, each limited partner and assignees of limited partners will have the right, subject to the terms and conditions set forth in the partnership agreement to

Beginning on or after the date which is 12 months after the date on which a limited partner first receives the OP Units, such limited partner will generally have the right, subject to the terms and conditions set forth in the partnership agreement, to require the Operating Partnership to redeem all or a portion of such OP Units in exchange for cash, or at the Company’s sole discretion, shares of Class A common stock, on an one-for-one basis determined in accordance with and subject to adjustment under the partnership agreement.

During the year ended December 31, 2023, 402,433 OP Units and 2,673 LTIP Units were redeemed for 405,106 shares of Class A common stock.

For redemption of OP Units using shares of Class A common stock, the Company adjusted the carrying value of non-controlling interests to reflect its share of the book value of the Operating Partnership reflecting the change in the Company’s ownership of the Operating Partnership.

Such adjustments are recorded to additional paid-in capital as a reallocation of non-controlling interest in the Consolidated Statements of Changes in Equity.

During the year ended December 31, 2023, 37,500 OP Units were also redeemed for cash for the total amount of $ 0.6 million.

POSTAL REALTY TRUST, INC.

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

require the Operating Partnership to redeem all or a portion of the OP Units held by such limited partner or assignee in exchange for cash, or at the Company’s sole discretion, shares of the Class A common stock, on an one-for-one basis determined in accordance with and subject to adjustment under the partnership agreement.

The Operating Partnership unitholders are entitled to share in cash distributions from the Operating Partnership in proportion to their percentage ownership of OP Units.

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Shares (1)(2)

Shares Weighted

Shares/Units/RSUs

Outstanding, as of January 1, 2023 449,076 536,868 229,500 1,215,444 $ 16.12

Granted 131,166 350,426 120,909 602,501 $ 15.53

Vesting of restricted shares (5)

Conversion to common stock

— ( 2,673 ) — ( 2,673 ) $ 18.02

Vesting of restricted shares and RSUs (5)

( 76,010 ) — ( 27,456 ) ( 103,466 ) $ 13.11

Forfeited ( 5,830 ) — ( 11,216 ) ( 17,046 ) $ 8.86

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(1) Represents restricted shares awards included in Class A common stock.

(2) The time-based restricted share awards granted to the Company's officers and employees typically vest in three annual installments or cliff vest at the end of three years or eight years .

The time-based restricted share awards granted to the Company's independent directors vest over three years .

(3) Includes 118,389 LTIP Units to the Company’s CEO that vest over eight years , 38,174 LTIP Units to the Company's independent directors that vest over three years or cliff vest at the end of three years and 5,040 LTIP Units granted to a consultant under the consultancy agreement with the Company that vested on December 31, 2022.

(2) The time-based restricted share awards granted to the Company's officers and employees typically vest in three annual installments or cliff vest at the end of three years , five years or eight years .

(3) Includes 143,288 LTIP Units granted to the Company’s CEO, 75,489 LTIP Units granted to the Company's president and 57,057 LTIP Units granted to the Company's Chief Financial Officer, which vest over three years or cliff vest at the end of eight years .

Also includes 25,510 LTIP Units granted to an employee of the Company, a portion of which vested on December 31, 2023 with the remaining to vest over three years or cliff vest at the end of eight years, 40,635 LTIP Units granted to the Company's independent directors that vest over three years or cliff vest at the end of three years and 8,447 LTIP Units granted to a consultant under the consultancy agreement with the Company, with 3,304 of such units vested on June 30, 2023 and 5,143 remaining to vest on June 30, 2024.

(4) Includes 63,512 RSUs granted to certain officers and employees of the Company during the year ended December 31, 2023 subject to the achievement of a service condition and a market condition.

Such RSUs are market-based awards and are subject to the achievement of hurdles relating to the Company’s absolute total stockholder return and continued employment with the Company over the approximately three-year period from the grant date through December 31, 2024.

Such RSUs are market-based awards and are subject to the achievement of performance-based hurdles relating to the Company’s specified absolute and relative total stockholder return goals and continued employment with the Company over the approximately three-year period from the grant date through December 31, 2025.

The number of market-based RSUs is based on the number of shares issuable upon achievement of the market-based metric at target.

Also, includes 40,963 time-based RSUs issued for 2021 incentive bonuses to certain employees that vested fully on January 31, 2022, the date of grant, and 12,780 time-based RSUs granted to certain employees for their election to defer 2022 salary that vested on December 31, 2022.

Also, includes 46,258 time-based RSUs issued for 2022 incentive bonuses to certain employees that vested fully on January 31, 2023, the date of grant, and 11,138 time-based RSUs granted to certain employees for their election to defer a portion of their 2023 salary that vested on December 31, 2023.

RSUs reflect the right to receive shares of Class A common stock, subject to the applicable vesting criteria.

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NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

In January 2023, the Company issued 123,197 LTIP Units to the Company’s CEO for his 2022 incentive bonus and his election to defer 100 % of his 2023 annual salary, 75,489 LTIP Units to the Company’s president for his 2022 incentive bonus and his election to defer 50% of his 2023 annual salary and 45,698 LTIP Units to the Company's Chief Financial Officer for his 2022 incentive bonus.

In February 2024, the Company issued 132,693 LTIP Units to the Company’s CEO for his 2023 incentive bonus and his election to defer 100 % of his 2024 annual salary, 51,490 LTIP Units to the Company’s president for his 2023 incentive bonus and 43,038 LTIP Units to the Company's Chief Financial Officer for his 2023 incentive bonus.

LTIP Units issued to the Company’s CEO, president and Chief Financial Officer in lieu of cash compensation will cliff vest on the eighth anniversary of February 1, 2024.

In addition, in January 2023, the Company issued 45,767 restricted shares of Class A common stock for annual grants to employees and consultants and 47,455 RSUs, 22,205 LTIP units and 44,650 restricted shares of Class A common stock to other employees for their 2022 incentive bonus and election by certain employees to defer a portion of their 2023 annual salaries.

In addition, in February 2024, the Company issued 32,579 restricted shares of Class A common stock for annual grants to employees and consultants and 34,841 RSUs, 48,778 LTIP units and 31,883 restricted shares of Class A common stock to other employees for their 2023 incentive bonus.

RSUs reflect the right to receive shares of Class A common stock.

RSUs and certain LTIP Units issued to employees for 2023 incentive bonuses vested fully on the date of grant.

RSUs and certain LTIP Units issued to employees in lieu of deferral of 2023 annual salary will cliff vest on December 31, 2023.

Certain restricted shares of Class A common stock issued to employees and consultants will vest in three equal, annual installments on each of the first three anniversaries of February 1, 2024, while other restricted shares of Class A common stock and LTIP Units issued to employees in lieu of cash compensation will cliff vest on the third, fifth or eighth anniversary of February 1, 2024.

The Company also issued 4,626 restricted shares of Class A common stock in February 2023 to certain employees and consultants for work anniversaries, which shares vested fully on the date of grant, and 3,304 LTIP Units in January 2023 to a consultant under the consultancy agreement with the Company.

In January 2023, the Company also issued an aggregate of 34,755 LTIP Units, 28,757 of restricted shares of Class A common stock and 63,512 RSUs to certain officers of the Company.

The Company also issued 703 restricted shares of Class A common stock in February 2024 to certain employees for work anniversaries, which shares vested fully on the date of grant.

In February 2024, the Company also issued an aggregate of 33,253 LTIP Units, 31,625 of restricted shares of Class A common stock and 79,296 RSUs to certain officers of the Company.

The LTIP Units and restricted shares of Class A common stock will vest in three equal, annual installments over the approximately three-year period ending February 1, 2027, subject to continued employment with the Company.

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During the year ended December 31, 2020, the Company issued 38,672 RSUs (the “2020 Performance-Based Awards”) to certain employees that were market-based awards and subject to the achievement of performance-based hurdles relating to the Company’s absolute total stockholder return goals and continued employment with the Company over the approximately three-year performance period ended December 31, 2022.

In January 2023, the Company's Corporate Governance and Compensation Committee of the Board of Directors determined that the Company's total stockholder return for such three-year performance period exceeded the threshold performance hurdles for the 2020 Performance-Based Awards and, as a result, approved the payout of (i) 27,456 RSUs for such awards, which were settled using the Company’s shares of Class A common stock, and (ii) their cash dividends for the three-year performance period.

In January 2023, the Company's Corporate Governance and Compensation Committee of the Board of Directors ("CGC Committee") determined that the Company's total stockholder return for such three-year performance period exceeded the threshold performance hurdles for the 2020 Performance-Based Awards and, as a result, approved the payout of (i) 27,456 RSUs for such awards, which were settled using the Company’s shares of Class A common stock, and (ii) their cash dividends for the three-year performance period.

During the year ended December 31, 2021, the Company issued 46,714 RSUs (the “2021 Performance-Based Awards”) to certain employees that were market-based awards and subject to the achievement of performance-based hurdles relating to the Company’s absolute total stockholder return goals and continued employment with the Company over the approximately three-year performance period ended December 31, 2023.

In February 2024, the Company's CGC Committee determined that the Company's total stockholder return for such three-year performance period met the threshold performance hurdles for the 2021 Performance-Based Awards and, as a result, approved the payout of (i) 23,357 RSUs for such awards, which were settled using the Company’s shares of Class A common stock, and (ii) their cash dividends for the three-year performance period.

During the year ended December 31, 2023, the Company recognized compensation expense of $ 5.2 million and $ 0.6 million in “General and administrative expenses” and "Property operating expenses" in the Consolidated Statements of Operations and Comprehensive Income, respectively, related to all awards.

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As of December 31, 2023, there was $ 15.1 million of total unrecognized compensation cost related to unvested awards, which is expected to be recognized over a weighted average period of 5.0 years.

POSTAL REALTY TRUST, INC.

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

Employee Stock Purchase Plan

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The Code permits the Company to provide up to a 15 % discount on the lesser of the fair market value of such shares of Class A common stock at the beginning of the offering period and the close of the offering period.

As of December 31, 2022

POSTAL REALTY TRUST, INC.

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

and 2021, 29,710 and 16,293 shares have been issued under the ESPP since commencement, respectively.

As of December 31, 2023 and 2022, 44,520 and 29,710 shares have been issued under the ESPP since commencement, respectively.

During the years ended December 31, 2023 and 2022, the Company recognized compensation expense of $ 0.03 million and $ 0.03 million, respectively, related to ESPP.

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The Company's Board of Directors approved, and on February 2, 2024, the Company declared a fourth quarter 2023 common stock dividend of $ 0.24 per share, which was paid on February 29, 2024 to stockholders of record as of February 16, 2024.

As of March 7, 2023, the Company had $ 182.0 million drawn on the Credit Facilities, with $ 50.0 million drawn on the 2021 Term Loan, $ 115.0 million drawn on the 2022 Term Loan and $ 17.0 million drawn on the 2021 Revolving Credit Facility.

As of March 7, 2023 and during the period subsequent to December 31, 2022, the Company closed on the acquisitions of 24 properties for approximately $ 12.7 million, excluding closing costs.

As of March 7, 2023 and during the period subsequent to December 31, 2022, the Company had entered into definitive agreements to acquire nine properties for approximately $ 1.8 million.

As of February 29, 2024, the Company 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.

As of February 29, 2024 and during the period subsequent to December 31, 2023, the Company issued 483,341 shares of its Class A common stock under the ATM Program for gross proceeds of approximately $ 6.9 million.

As of February 29, 2024 and during the period subsequent to December 31, 2023, the Company closed on the acquisitions of eight properties for approximately $ 4.5 million, excluding closing costs.

POSTAL REALTY TRUST, INC.

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

As of February 29, 2024 and during the period subsequent to December 31, 2023, the Company had entered into definitive agreements to acquire twenty properties for approximately $ 13.9 million.

The majority of these transactions are anticipated to close during the second and third quarters of 2024, subject to the satisfaction of customary closing conditions.

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Compared sentence by sentence after normalising whitespace, quotation marks, case and digits, so re-formatting and restated figures do not read as changed language. Wording changes appear as one removal and one addition. The current filing and the prior one are authoritative.

What changed 10-K

Item 8. Financial Statements and Supplementary Data