What changed in this filing

/stocks — the workspaceLOADING

Item 1. Financial Statements

2024-08-06 compared with 2024-05-07 · 181 added, 128 removed, 534 unchanged (37% of the section changed)

32 unchanged sentences

500,000,000 shares authorized;

22,607,251 and 21,933,005 shares issued and outstanding as of March 31, 2024 and December 31, 2023, respectively

22,717,706 and 21,933,005 shares issued and outstanding as of June 30, 2024 and December 31, 2023, respectively

Class B common stock, par value $ 0.01 per share;

27,206 shares authorized;

27,206 shares issued and outstanding as of March 31, 2024 and December 31, 2023

27,206 shares issued and outstanding as of June 30, 2024 and December 31, 2023

Additional paid-in capital 296,886 287,268

8 unchanged sentences

POSTAL REALTY TRUST, INC.

CONSOLIDATED STATEMENTS OF OPERATIONS AND COMPREHENSIVE INCOME (LOSS)

CONSOLIDATED STATEMENTS OF OPERATIONS AND COMPREHENSIVE INCOME

(in thousands, except share and per share data )

For the Three Months Ended

June 30, For the Six Months Ended

2024 2023 2024 2023

Rental income $ 17,364 $ 14,762 $ 33,969 $ 29,261

15 unchanged sentences

Income before income tax expense

1,060 1,282 1,332 1,731

Income tax expense

4 unchanged sentences

Net income attributable to common stockholders $ 817 $ 1,012 $ 1,023 $ 1,360

Net (loss) income per share:

Net income per share:

Basic and Diluted $ 0.02 $ 0.03 $ 0.01 $ 0.04

1 unchanged sentence

Basic and Diluted 22,339,245 19,544,833 22,192,277 19,417,304

Comprehensive income (loss):

Comprehensive income:

Net income $ 1,032 $ 1,261 $ 1,288 $ 1,694

Unrealized gain (loss) on derivative instruments

2,819 ( 2,837 )

Comprehensive income (loss)

3,075 ( 2,404 )

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

Comprehensive income (loss) attributable to common stockholders

$ 2,473 $ ( 1,931 )

Unrealized gain on derivative instruments 14 3,399 2,833 562

Comprehensive income 1,046 4,660 4,121 2,256

Comprehensive income attributable to operating partnership unitholders’ non-controlling interests ( 218 ) ( 921 ) ( 820 ) ( 448 )

Comprehensive income attributable to common stockholders $ 828 $ 3,739 $ 3,301 $ 1,808

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

12 unchanged sentences

— — — — — — 5,788 5,788

Issuance and amortization of equity-based compensation 120,941 1 1,147 — — 1,148 965 2,113

Issuance and amortization of equity-based compensation, net of forfeitures 120,941 1 1,147 — — 1,148 965 2,113

Issuance and amortization under the employee stock purchase plan ("ESPP")

2 unchanged sentences

Dividends and distributions — — — — ( 5,520 ) ( 5,520 ) ( 1,339 ) ( 6,859 )

Unrealized gain on derivative instrument

— — — 2,267 — 2,267 552 2,819

Unrealized gain on derivative instruments — — — 2,267 — 2,267 552 2,819

Net income — — — — 206 206 50 256

1 unchanged sentence

Balance – March 31, 2024 22,634,457 $ 226 $ 294,878 $ 6,888 $ ( 53,860 ) $ 248,132 $ 65,158 $ 313,290

Net proceeds from sale of common stock 57,993 1 684 — — 685 — 685

Shares issued upon redemption of operating partnership units

52,778 1 861 — — 862 ( 862 ) —

Issuance and amortization of equity-based compensation, net of forfeitures ( 316 ) — 722 — — 722 711 1,433

Issuance and amortization under the ESPP

— — 6 — — 6 — 6

Dividends and distributions — — — — ( 5,490 ) ( 5,490 ) ( 1,438 ) ( 6,928 )

Unrealized gain on derivative instruments — — — 11 — 11 3 14

Net income — — — — 817 817 215 1,032

Reallocation of non-controlling interest — — ( 265 ) — — ( 265 ) 265 —

Balance – June 30, 2024 22,744,912 $ 228 $ 296,886 $ 6,899 $ ( 58,533 ) $ 245,480 $ 64,052 $ 309,532

Balance – December 31, 2022 19,555,272 $ 195 $ 254,107 $ 7,486 $ ( 32,557 ) $ 229,231 $ 54,480 $ 283,711

2 unchanged sentences

22,798 — 409 — — 409 ( 409 ) —

Issuance and amortization of equity-based compensation 146,627 1 1,376 — — 1,377 568 1,945

Issuance and amortization of equity-based compensation, net of forfeitures 146,627 1 1,376 — — 1,377 568 1,945

Issuance and amortization under the ESPP

7 unchanged sentences

Balance – March 31, 2023 19,764,915 $ 197 $ 254,030 $ 5,207 $ ( 36,996 ) $ 222,438 $ 55,328 $ 277,766

Net proceeds from sale of common stock 265,225 3 3,840 — — 3,843 — 3,843

Issuance of operating partnership units in connection with acquisition transactions — — — — — — 548 548

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

Issuance and amortization of equity-based compensation, net of forfeitures ( 165 ) — 684 — — 684 558 1,242

Issuance and amortization under the ESPP — — 6 — — 6 — 6

Dividends and distributions — — — — ( 4,770 ) ( 4,770 ) ( 1,167 ) ( 5,937 )

Unrealized gain on derivative instruments — — — 2,727 — 2,727 672 3,399

Net income — — — — 1,012 1,012 249 1,261

Reallocation of non-controlling interest — — ( 229 ) — — ( 229 ) 229 —

Balance – June 30, 2023 20,029,975 $ 200 $ 258,331 $ 7,934 $ ( 40,754 ) $ 225,711 $ 55,859 $ 281,570

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

2 unchanged sentences

(in thousands)

For the Three Months Ended

For the Six Months Ended

Cash flows from operating activities:

3 unchanged sentences

Amortization of in-place intangibles 3,780 3,547

Write-off and amortization of deferred financing costs 181 165

Write-off and amortization of deferred financing fees 362 330

Amortization of above/below market leases ( 1,423 ) ( 1,176 )

Amortization of intangible liability ( 119 ) ( 49 )

Gain on insurance proceeds received for damage due to property ( 22 ) —

Equity based compensation 3,565 3,207

9 unchanged sentences

Acquisition of real estate ( 41,775 ) ( 32,863 )

Escrows for acquisition and construction deposits ( 157 ) ( 223 )

Escrows for acquisition deposits ( 221 ) ( 222 )

Capital improvements ( 1,568 ) ( 968 )

Insurance proceeds related to property damage claims 22 —

Other investing activities ( 75 ) ( 28 )

4 unchanged sentences

Repayments of revolving credit facility ( 15,000 ) ( 3,000 )

Redemption of operating partnership units

Net proceeds from issuance of shares 8,552 4,561

9 unchanged sentences

Supplemental Disclosure of Non-Cash Investing and Financing Activities

Shares issued upon redemption of operating partnership units

Reallocation of non-controlling interest 1,344 2,567

Operating partnership units issued for property acquisitions

Unrealized gain (loss) on interest rate swaps, net

2,819 ( 2,837 )

Unrealized gain on interest rate swaps, net 2,833 562

Accrued capital expenditures included in accounts payable and accrued expenses 120 235

1 unchanged sentence

Write-off of fixed assets no longer in service 25 151

Reclassification of construction deposits included in prepaid expenses and other assets 57 113

Accrued costs of capital included in accounts payable and accrued expenses 130 8

Right of use assets 64 —

Right of use assets, net 25 —

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

10 unchanged sentences

As the sole general partner of the Operating Partnership, the Company has the exclusive power under the partnership agreement to manage and conduct the Operating Partnership’s business, subject to limited approval and voting rights of the limited partners.

As of March 31, 2024, the Company held an approximately 79.2 % interest in the Operating Partnership.

As of June 30, 2024, the Company held an approximately 79.3 % interest in the Operating Partnership.

As the sole general partner and the majority interest holder, the Company consolidates the financial position and results of operations of the Operating Partnership.

The Operating Partnership is considered a variable interest entity (“VIE”) in which the Company is the primary beneficiary.

As of March 31, 2024, the Company owned a portfolio of 1,537 properties located in 49 states and one territory.

As of June 30, 2024, the Company owned a portfolio of 1,607 properties located in 49 states and one territory.

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

52 unchanged sentences

Rental income is recognized on a straight-line basis over the term of the lease.

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 (Loss).

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.

7 unchanged sentences

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 (Loss) and produces a constant periodic rate of return on the "Investment in financing leases, net."

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."

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

However, considerable judgment is necessary to interpret market data and develop estimated fair value.

Accordingly, the estimates presented herein are not necessarily indicative of the amounts the Company could have realized on disposition of the assets and liabilities as of March 31, 2024 and December 31, 2023.

Accordingly, the estimates presented herein are not necessarily indicative of the amounts the Company could have realized on disposition of the assets and liabilities as of June 30, 2024 and December 31, 2023.

The use of different market assumptions and/or estimation methodologies may have a material effect on the estimated fair value amounts.

1 unchanged sentence

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (UNAUDITED)

Cash, escrows and reserves, receivables, prepaid expenses and other assets (excluding derivatives), accounts payable and accrued expenses are carried at amounts which reasonably approximate their fair values as of March 31, 2024 and December 31, 2023 due to their short maturities.

escrows and reserves, receivables, prepaid expenses and other assets (excluding derivatives), accounts payable and accrued expenses are carried at amounts which reasonably approximate their fair values as of June 30, 2024 and December 31, 2023 due to their short maturities.

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 March 31, 2024 and December 31, 2023, 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 $ 27.6 million and $ 28.0 million as compared to the principal balance of $ 32.9 million and $ 33.0 million as of March 31, 2024 and December 31, 2023, respectively.

The fair value was determined using the Adjusted Term SOFR (as defined below) as of June 30, 2024 and December 31, 2023, 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 $ 27.5 million and $ 28.0 million as compared to the principal balance of $ 32.9 million and $ 33.0 million as of June 30, 2024 and December 31, 2023, respectively.

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.

3 unchanged sentences

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 March 31, 2024 and December 31, 2023, the fair value of the Company’s interest rate swap derivative assets was approximately $ 8.7 million and $ 6.4 million, respectively, included in “Prepaid expenses and other assets, net” on the Consolidated Balance Sheets.

As of March 31, 2024 and December 31, 2023, the fair value of the Company's interest rate swap derivative liabilities was approximately $ 0.2 million and $ 0.7 million, respectively, 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 March 31, 2024 and December 31, 2023.

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 March 31, 2024 and current estimates of fair value may differ significantly from the amounts presented herein.

As of June 30, 2024 and December 31, 2023, the fair value of the Company’s interest rate swap derivative assets was approximately $ 8.7 million and $ 6.4 million, respectively, included in “Prepaid expenses and other assets, net” on the Consolidated Balance Sheets.

As of June 30, 2024 and December 31, 2023, the fair value of the Company's interest rate swap derivative liabilities was approximately $ 0.1 million and $ 0.7 million, respectively, 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 June 30, 2024 and December 31, 2023.

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 June 30, 2024 and current estimates of fair value may differ significantly from the amounts presented herein.

Derivative Instruments and Hedging Activities

12 unchanged sentences

The evaluation of anticipated cash flows is subjective and is based, in part, on assumptions regarding future occupancy, rental rates and capital requirements that could differ materially from actual results.

No impairments were recorded during the three months ended March 31, 2024 and 2023.

No impairments were recorded during the three and six months ended June 30, 2024 and 2023.

POSTAL REALTY TRUST, INC.

1 unchanged sentence

Concentration of Credit Risks

As of March 31, 2024, the Company’s properties were leased primarily to a single tenant, the USPS.

For the three months ended March 31, 2024, approximately 12.4 % of the Company’s total rental income, or $ 2.1 million, was concentrated in Pennsylvania.

For the three months ended March 31, 2023, approximately 13.7 % of the Company's total rental income, or $ 2.0 million, was concentrated in Pennsylvania.

As of June 30, 2024, the Company’s properties were leased primarily to a single tenant, the USPS.

For the six months ended June 30, 2024, approximately 12.2 % of the Company’s total rental income, or $ 4.1 million, was concentrated in Pennsylvania.

For the six months ended June 30, 2023, approximately 13.3 % of the Company's total rental income, or $ 3.9 million, was concentrated in Pennsylvania.

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.

15 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 March 31, 2024 and 2023, the Company had unvested restricted shares of Class A common stock, long term incentive units of the Operating Partnership ("LTIP Units") and certain restricted stock units (“RSUs”), which provide for non-forfeitable rights to dividend and dividend equivalent payments.

As of June 30, 2024 and 2023, the Company had unvested restricted shares of Class A common stock, long term incentive units of the Operating Partnership ("LTIP Units") and certain restricted stock units (“RSUs”), which provide for non-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.

12 unchanged sentences

Real Estate Transactions

The following tables summarizes the Company’s acquisitions for the three months ended March 31, 2024.

The following tables summarizes the Company’s acquisitions for the six months ended June 30, 2024.

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.

7 unchanged sentences

March 31, 2024 (2) 29 $ 6,442 $ 12,362 $ 98 $ 1,372 $ 34 $ ( 1,442 ) $ — $ 18,866

June 30, 2024 (3) 70 $ 6,191 $ 21,955 $ 144 $ 1,733 $ 11 $ ( 1,237 ) $ — $ 28,797

Total 99 $ 12,633 $ 34,317 $ 242 $ 3,105 $ 45 $ ( 2,679 ) $ — $ 47,663

Explanatory Notes :

(1) Includes closing costs of approximately $ 0.3 million for the three months ended March 31, 2024.

(1) Includes closing costs of approximately $ 0.3 million for the three months ended March 31, 2024 and $ 0.5 million for the three months ended June 30, 2024.

(2) Includes the acquisition of 29 properties in various states for cash consideration in individual or portfolio transactions for a price of approximately $ 18.9 million, including closing costs, which was funded with both the issuance of OP Units to the sellers (valued at approximately $ 5.8 million using the share price of Class A common stock on the date of each issuance of such OP Units) and cash consideration.

In addition, during the three months ended March 31, 2024, the Company entered into a definitive agreement to sell one property with an immaterial net book value, which transaction was completed in April 2024.

(3) Includes the acquisition of 70 properties in various states for cash consideration in individual or portfolio transactions for a price of approximately $ 28.8 million, including closing costs, which was funded with cash consideration.

Also, includes 36 properties acquired from a related party.

Related Party Transactions for further details.

In addition, during the six months ended June 30, 2024, the Company sold one property with an immaterial net book value, which transaction was completed in April 2024.

Intangible Assets and Liabilities

3 unchanged sentences

(in thousands)

March 31, 2024:

June 30, 2024:

In-place lease intangibles

11 unchanged sentences

( 22,940 ) 9,840 ( 13,100 )

Amortization of in-place lease intangibles was $ 1.8 million and $ 1.8 million for the three months ended March 31, 2024 and 2023, respectively.

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

Amortization of acquired above-market leases was $ 0.05 million and $ 0.04 million for the three months ended March 31, 2024 and 2023, respectively, and is included in “Rental income” in the Consolidated Statements of Operations and Comprehensive Income (Loss).

Amortization of acquired below-market leases was $ 0.7 million and $ 0.6 million for the three months ended March 31, 2024 and 2023, respectively, and is included in “Rental income” in the Consolidated Statements of Operations and Comprehensive Income (Loss).

POSTAL REALTY TRUST, INC.

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (UNAUDITED)

Amortization of in-place lease intangibles was $ 2.0 million and $ 3.8 million for the three and six months ended June 30, 2024, respectively, and $ 1.8 million and $ 3.5 million for the three and six months ended June 30, 2023, respectively.

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

Amortization of acquired above-market leases was $ 0.04 million and $ 0.09 million for the three and six months ended June 30, 2024, respectively, and $ 0.04 million and $ 0.08 million for the three and six months ended June 30, 2023, respectively, and is included in “Rental income” in the Consolidated Statements of Operations and Comprehensive Income.

Amortization of acquired below-market leases was $ 0.8 million and $ 1.5 million for the three and six months ended June 30, 2024, respectively, and $ 0.6 million and $ 1.3 million for the three and six months ended June 30, 2023, respectively, and is included in “Rental income” in the Consolidated Statements of Operations and Comprehensive Income.

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

9 unchanged sentences

$ 13,479 $ 308 $ ( 14,264 )

The following table summarizes the Company’s indebtedness as of March 31, 2024 and December 31, 2023 (dollars in thousands):

The following table summarizes the Company’s indebtedness as of June 30, 2024 and December 31, 2023 (dollars in thousands):

Outstanding Balance as of

26 unchanged sentences

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.

The 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 2027 and the 2022 Term Loan matures in February 2028.

The Revolving Credit Facility matures in January 2026, which may be extended for two six-month periods subject to

POSTAL REALTY TRUST, INC.

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (UNAUDITED)

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.

1 unchanged sentence

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

POSTAL REALTY TRUST, INC.

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (UNAUDITED)

During the three months ended March 31, 2024 and 2023, the Company incurred $ 0.07 million and $ 0.07 million, respectively, of unused facility fees related to the Revolving Credit Facility.

As of March 31, 2024, the Company was in compliance with all of the Credit Facilities’ debt covenants.

During the three and six months ended June 30, 2024, the Company incurred $ 0.06 million and $ 0.1 million, respectively, and during the three and six months ended June 30, 2023, the Company incurred $ 0.07 million and $ 0.1 million, respectively, of unused facility fees related to the Revolving Credit Facility.

As of June 30, 2024, the Company was in compliance with all of the Credit Facilities’ debt covenants.

(2) Based upon the one-month Adjusted Term SOFR, which is the applicable Term Secured Overnight Financing Rate plus an adjustment of 0.10 %, subject to a 0 % floor (the “Adjusted Term SOFR”) .

10 unchanged sentences

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 March 31, 2024 and December 31, 2023 was approximately 3.9 years and 4.2 years, respectively.

The scheduled principal repayments of indebtedness as of March 31, 2024 are as follows (in thousands):

Year Ending December 31, Amount

2024 - Remaining $ 13

The weighted average maturity date for the Company's indebtedness as of June 30, 2024 and December 31, 2023 was approximately 3.5 years and 4.2 years, respectively.

POSTAL REALTY TRUST, INC.

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (UNAUDITED)

The scheduled principal repayments of indebtedness as of June 30, 2024 are as follows (in thousands):

Year Ending December 31, Amount

2024 - Remaining $ 9

Derivatives and Hedging Activities

As of March 31, 2024, 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:

As of June 30, 2024, 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)

14 unchanged sentences

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 in the Consolidated Statements of Operations and Comprehensive Income (Loss) for the three months ended March 31, 2024 and 2023 (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 three and six months ended June 30, 2024 and 2023 (in thousands):

For the Three Months Ended

June 30, For the Six Months Ended

Derivatives in Cash Flow Hedging Relationships (Interest Rate Swaps) 2024 2023 2024 2023

Amount of gain (loss) recognized on derivative in "Accumulated other comprehensive income"

Amount of gain recognized on derivative in "Accumulated other comprehensive income"

$ 1,341 $ 4,491 $ 5,491 $ 2,553

1 unchanged sentence

$ 1,327 $ 1,092 $ 2,658 $ 1,991

"Interest expense, net" presented in the Consolidated Statements of Operations and Comprehensive Income (Loss), in which the effects of cash flow hedges are recorded, totaled $ 2.8 million and $ 2.2 million for the three months ended March 31, 2024 and 2023, respectively.

As of March 31, 2024, the Company also had 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 March 31, 2024, it could have been required to settle its obligations under the agreements of any interest rate swap in a net liability position for approximately $ 0.2 million, which is at their termination value.

POSTAL REALTY TRUST, INC.

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (UNAUDITED)

"Interest expense, net" presented in the Consolidated Statements of Operations and Comprehensive Income, in which the effects of cash flow hedges are recorded, totaled $ 3.1 million and $ 5.9 million for the three and six months ended June 30, 2024, respectively and $ 2.5 million and $ 4.7 million for the three and six months ended June 30, 2023, respectively.

As of June 30, 2024, the Company also had 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 June 30, 2024, it could have been required to settle its obligations under the agreements of any interest rate swap in a net liability position for approximately $ 0.1 million, which is at their termination value.

Lessor Accounting

As of March 31, 2024, the Company's properties were leased primarily to the USPS, with leases expiring at various dates through May 31, 2031.

Certain leases had expired and were in holdover status as of March 31, 2024 as discussed below.

As of June 30, 2024, the Company's properties were leased primarily to the USPS, with leases expiring at various dates through June 30, 2032.

Certain leases had expired and were in holdover status as of June 30, 2024 as discussed below.

Certain leases contain renewal, termination and/or purchase options exercisable at the lessee’s election.

5 unchanged sentences

The Company elected the practical expedient to account for its lease and non-lease components as a single combined operating lease component under Topic 842.

As a result, rental income and tenant reimbursements were aggregated into a single line within rental income in the Consolidated Statements of Operations and Comprehensive Income (Loss).

As a result, rental income and tenant reimbursements were aggregated into a single line within rental income in the Consolidated Statements of Operations and Comprehensive Income.

The following table represents rental revenue that the Company recognized related to its operating leases (in thousands):

For the Three Months Ended

June 30, For the Six Months Ended

2024 2023 2024 2023

Fixed payments

2 unchanged sentences

2,245 1,908 4,410 3,857

Future minimum lease payments to be received as of March 31, 2024 under non-cancellable operating leases for the next five years and thereafter are as follows (in thousands):

$ 17,364 $ 14,762 $ 33,969 $ 29,261

Future minimum lease payments to be received as of June 30, 2024 under non-cancellable operating leases for the next five years and thereafter are as follows (in thousands):

Year Ending December 31, Amount (1)(2)(3)

2 unchanged sentences

(1) The above minimum lease payments to be received do not include reimbursements from tenants for real estate taxes and other reimbursed expenses.

(2) As of March 31, 2024, the leases at 98 of the Company's properties were expired and the USPS was occupying such properties as a holdover tenant.

POSTAL REALTY TRUST, INC.

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (UNAUDITED)

(2) As of June 30, 2024, the leases at 87 of the Company's properties were expired and the USPS was occupying such properties as a holdover tenant.

As such, the above minimum lease payments to be received do not include payments under these holdover leases.

1 unchanged sentence

(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.

Also excludes lease payments from one property sold in April 2024.

Purchase Option Provisions

POSTAL REALTY TRUST, INC.

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (UNAUDITED)

As of March 31, 2024, operating leases for 75 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 March 31, 2024, 70 of these properties had an aggregate carrying value of approximately $ 52.4 million with an aggregate purchase option price of approximately $ 68.0 million and the remaining five properties had an aggregate carrying value of approximately $ 4.3 million with purchase options exercisable at fair market value.

As of June 30, 2024, operating leases for 75 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 June 30, 2024, 71 of these properties had an aggregate carrying value of approximately $ 52.8 million with an aggregate purchase option price of approximately $ 68.2 million and the remaining four properties had an aggregate carrying value of approximately $ 3.3 million with purchase options exercisable at fair market value.

Investment in Financing Leases, Net

As of March 31, 2024 and December 31, 2023, financing leases for two of the Company's properties provide the USPS with the option to purchase the underlying property at fixed prices as of dates set forth in the lease agreement.

The components of the Company’s net investment in financing leases as of March 31, 2024 and December 31, 2023 are summarized in the table below (in thousands):

As of June 30, 2024 and December 31, 2023, financing leases for two of the Company's properties provide the USPS with the option to purchase the underlying property at fixed prices as of dates set forth in the lease agreement.

The components of the Company’s net investment in financing leases as of June 30, 2024 and December 31, 2023 are summarized in the table below (in thousands):

Total minimum lease payment receivable

3 unchanged sentences

Investment in financing leases, net $ 15,994 $ 16,042

Revenue earned under direct financing leases for each of the three months ended March 31, 2024 and 2023 were $0.3 million, which is recorded in "Fee and other" in the Consolidated Statements of Operations and Comprehensive Income (Loss).

Future lease payments to be received under the Company’s direct financing leases as of March 31, 2024 for the next five years and thereafter are as follows (in thousands):

Revenue earned under direct financing leases for each of the three and six months ended June 30, 2024 and 2023 were $ 0.3 million and $ 0.5 million, which is recorded in "Fee and other" in the Consolidated Statements of Operations and Comprehensive Income.

Future lease payments to be received under the Company’s direct financing leases as of June 30, 2024 for the next five years and thereafter are as follows (in thousands):

Year Ending December 31, Amount

2 unchanged sentences

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

As of March 31, 2024, these leases had remaining terms, including renewal options, of less than a year to 58.8 years and a weighted average remaining lease term of 22.0 years.

As of June 30, 2024, these leases had remaining terms, including renewal options, of 1.1 years to 58.5 years and a weighted average remaining lease term of 23.8 years.

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

POSTAL REALTY TRUST, INC.

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (UNAUDITED)

ROU asset – operating leases

2 unchanged sentences

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 (UNAUDITED)

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.

1 unchanged sentence

The lease terms may include options to extend or terminate the lease if it is reasonably certain that the Company will exercise that option.

Operating lease expense for the three months ended March 31, 2024 and 2023 was $ 0.07 million and $ 0.06 million, respectively.

Operating lease expense for the three and six months ended June 30, 2024 was $ 0.07 million and $ 0.1 million, respectively.

Operating lease expense for the three and six months ended June 30, 2023 was $ 0.06 million and $ 0.1 million, respectively.

Related Party Transactions for more details.

Future minimum lease payments to be paid by the Company as a lessee for operating leases as of March 31, 2024 for the next five years and thereafter are as follows (in thousands):

Future minimum lease payments to be paid by the Company as a lessee for operating leases as of June 30, 2024 for the next five years and thereafter are as follows (in thousands):

2024 — Remaining $ 39

4 unchanged sentences

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

For each of the three months ended March 31, 2024 and 2023, income tax expense related to REAC was $ 0.01 million.

For the three and six months ended June 30, 2024, income tax expense related to REAC was $ 0.02 million and $ 0.03 million, respectively.

For the three and six months ended June 30, 2023, income tax expense related to REAC was $ 0.01 million and $ 0.03 million, respectively.

In connection with the IPO, the indirect sole shareholder of United Postal Holdings, Inc.

2 unchanged sentences

The indirect sole shareholder of UPH will be responsible for all tax related matters related to UPH.

As of December 31, 2022, the Company had remaining unrecognized tax benefits of $ 0.02 million, which were inclusive of interest and penalties, and a corresponding indemnification asset, which were included in "Prepaid expenses and other assets, net" on the Consolidated Balance Sheets.

During the three months ended March 31, 2023, the Company reversed the remaining $ 0.02 million of unrecognized tax benefits and the corresponding indemnification asset due to the expiration of statute of limitations.

Related Party Transactions

Management Fee Income

REAC recognized management fee income of $ 0.3 million for each of the three months ended March 31, 2024 and 2023 from various parties which were affiliated with the Company's CEO.

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

Accrued management fees receivable of $ 0.3 million and $ 0.3 million as of March 31, 2024 and December 31, 2023, respectively, are included in “Rent and other receivables” on the Consolidated Balance Sheets.

POSTAL REALTY TRUST, INC.

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (UNAUDITED)

other assets, net" on the Consolidated Balance Sheets.

During the six months ended June 30, 2023, the Company reversed the remaining $ 0.02 million of unrecognized tax benefits and the corresponding indemnification asset due to the expiration of statute of limitations.

Related Party Transactions

Management Fee Income

REAC recognized management fee income of $ 0.3 million and $ 0.7 million for the three and six months ended June 30, 2024, respectively, and $ 0.3 million and $ 0.6 million for the three and six months ended June 30, 2023, respectively, from various parties which were affiliated with the Company's CEO.

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 June 30, 2024 and December 31, 2023, respectively, are included in “Rent and other receivables” on the Consolidated Balance Sheets.

Related Party Lease

On May 17, 2019, the Company entered into a lease for office space in Cedarhurst, New York with an entity affiliated with the Company’s CEO (the “Office Lease”).

Pursuant to the Office Lease, the monthly rent is $ 15,000 subject to escalations.

The term of the Office Lease is five years commencing on May 17, 2019 and will expire on May 16, 2024.

Rental expenses associated with the Office Lease for each of the three months ended March 31, 2024 and 2023 were $ 0.05 million and was recorded in “General and administrative expenses” in the Consolidated Statements of Operations and Comprehensive Income (Loss).

In connection with the Company's IPO and the related formation transactions, the Company entered into a lease for office space in Cedarhurst, New York with an entity affiliated with the Company’s CEO (the “Office Lease”).

Pursuant to the Office Lease, the monthly rent was $ 15,000 subject to escalations.

The term of the Office Lease was five years commencing on May 17, 2019 and expired on May 16, 2024.

Rental expenses associated with the Office Lease for each of the three and six months ended June 30, 2024 and 2023 were $ 0.05 million and $ 0.1 million, respectively, and was recorded in “General and administrative expenses” in the Consolidated Statements of Operations and Comprehensive Income.

In May 2024, the Office Lease was extended to the end of 2024 at the same rental rate.

The Company determined this Office Lease was an operating lease.

For further details, see Note 7.

Right of First Offer Transactions

In connection with the Company's IPO and the related formation transactions, the Company entered into a Right of First Offer Agreement (the “ROFO Agreement”) with certain members of the family (the “Related Party”) of Andrew Spodek, the Company’s CEO.

Pursuant to the ROFO Agreement, the Company has the right of first offer to acquire from the Related Party 250 properties that are currently managed by the Company.

On May 30, 2024, the Company acquired from the Related Party a portfolio of 36 properties currently leased to the USPS for approximately $ 12.5 million in cash, excluding closing costs.

The transaction was approved by a special committee of the Company’s Board of Directors consisting of four independent directors.

As disclosed above in Note 5.

Spodek personally guaranteed a portion of or the entire amount outstanding under the Company's loans with First Oklahoma Bank and Vision Bank, totaling $ 1.9 million and $ 1.9 million as of March 31, 2024 and December 31, 2023, respectively.

As a guarantor, Mr.

3 unchanged sentences

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 (UNAUDITED)

For the Three Months Ended

June 30, For the Six Months Ended

2024 2023 2024 2023

Numerator for earnings per share – basic and diluted:

4 unchanged sentences

22,339,245 19,544,833 22,192,277 19,417,304

Basic and diluted net (loss) income per share

$ ( 0.01 ) $ 0.00

Basic and diluted net income per share $ 0.02 $ 0.03 $ 0.01 $ 0.04

Explanatory Note :

7 unchanged sentences

On November 4, 2022, the Company entered into separate open market sale agreements for its at-the-market offering program with each of Jefferies LLC, BMO Capital Markets Corp., 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

POSTAL REALTY TRUST, INC.

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (UNAUDITED)

supplemental confirmations with affiliates of certain agents.

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.

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 period presented (dollars and shares issued in thousands, except per share amounts).

During the three months ended March 31, 2024, 576,087 shares were issued under the ATM program.

During the three months ended March 31, 2023, 55,082 shares were issued under the ATM program.

As of March 31, 2024, the Company had approximately $ 105.8 million remaining that may be issued under the ATM Program.

During the three and six months ended June 30, 2024, 57,993 and 634,080 shares were issued under the ATM program.

During the three and six months ended June 30, 2023, 265,225 and 320,307 shares were issued under the ATM program.

As of June 30, 2024, the Company had approximately $ 105.0 million remaining that may be issued under the ATM Program.

Three Months Ended

June 30, Six Months Ended

2024 2023 2024 2023

Shares issued

58 265 634 320

Gross proceeds received

3 unchanged sentences

Average gross sales price per share $ 14.20 $ 15.07 $ 14.25 $ 15.06

POSTAL REALTY TRUST, INC.

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (UNAUDITED)

Dividends and Distributions

During the three months ended March 31, 2024, the Company's Board of Directors approved and the Company declared and paid dividends or distributions, as applicable, of $ 6.8 million to Class A common stockholders, Voting Equivalency stockholders, OP unitholders and LTIP unitholders, or $ 0.24 per share or unit, as shown in the table below.

During the three and six months ended June 30, 2024, the Company's Board of Directors approved and the Company declared and paid dividends or distributions, as applicable, of $ 6.9 million and $ 13.7 million, respectively to Class A common stockholders, Voting Equivalency stockholders, OP unitholders and LTIP unitholders, or $ 0.24 per share or unit and $ 0.48 per share or unit, respectively, as shown in the table below.

Declaration Date Record Date Date Paid Amount Per Share or Unit

February 2, 2024 February 16, 2024 February 29, 2024 $ 0.24

April 30, 2024 May 8, 2024 May 31, 2024 $ 0.24

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 employees and the Board of Directors in connection with the IPO and/or as a part of their compensation.

During the three months ended March 31, 2024, the Company issued 151,916 LTIP Units to the Company’s CEO for his 2023 incentive bonus, his election to defer 100 % of his 2024 annual salary and for long term incentive compensation, 51,490 LTIP Units to the Company’s President for his 2023 incentive bonus, 53,906 LTIP Units to the Company's Chief Financial Officer for his 2023 incentive bonus and for long term incentive compensation and 51,940 LTIP Units to certain other employees for their 2023 incentive bonus and for long term incentive compensation.

As of March 31, 2024 and December 31, 2023, non-controlling interests consisted of 4,799,318 OP Units and 1,193,873 LTIP Units and 4,387,334 OP Units and 884,621 LTIP Units, respectively.

This represented approximately 20.8 % and 19.3 % of the outstanding Operating Partnership units as of March 31, 2024 and December 31, 2023, respectively.

During the six months ended June 30, 2024, the Company issued 151,916 LTIP Units to the Company’s CEO for his 2023 incentive bonus, his election to defer 100 % of his 2024 annual salary and for long term incentive compensation, 51,490 LTIP Units to the Company’s President for his 2023 incentive bonus, 53,906 LTIP Units to the Company's Chief Financial Officer for his 2023 incentive bonus and for long term incentive compensation, 43,526 LTIP Units in May 2024 to the Board of Directors for their annual retainers as compensation for their services as directors and for long term incentive compensation and 51,940 LTIP Units to certain other employees for their 2023 incentive bonus and for long term incentive compensation.

As of June 30, 2024 and December 31, 2023, non-controlling interests consisted of 4,746,540 OP Units and 1,237,399 LTIP Units and 4,387,334 OP Units and 884,621 LTIP Units, respectively.

This represented approximately 20.7 % and 19.3 % of the outstanding Operating Partnership units as of June 30, 2024 and December 31, 2023, respectively.

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 date on which a person first became a holder of common units, each limited partner and assignees of limited partners 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 the OP Units held by such limited partner or assignee 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 six months ended June 30, 2024, 52,778 OP Units were redeemed for 52,778 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.

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

Restricted Stock and Other Awards

POSTAL REALTY TRUST, INC.

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (UNAUDITED)

Pursuant to the Company’s Plan, the Company may grant equity incentive awards to its directors, officers, employees and consultants.

As of March 31, 2024, the remaining shares available under the Plan for future issuance was 1,047,055 .

As of June 30, 2024, the remaining shares available under the Plan for future issuance was 1,021,972 .

The Plan provides for grants of stock options, stock awards, stock appreciation rights, performance units, incentive awards, other equity-based awards (including LTIP Units) and dividend equivalents in connection with the grant of performance units and other equity-based awards.

POSTAL REALTY TRUST, INC.

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (UNAUDITED)

The following table presents a summary of the Company's outstanding restricted shares of Class A common stock, LTIP Units and RSUs.

The balance as of March 31, 2024 represents unvested restricted shares of Class A common stock and LTIP Units and RSUs that are outstanding, whether vested or not:

The balance as of June 30, 2024 represents unvested restricted shares of Class A common stock and LTIP Units and RSUs that are outstanding, whether vested or not:

Shares (1)(2)

6 unchanged sentences

( 5,697 ) — ( 23,359 ) ( 29,056 ) $ 12.71

Outstanding, as of March 31, 2024 553,148 1,193,873 378,320 2,125,341 $ 15.80

Outstanding, as of June 30, 2024 552,832 1,237,399 378,320 2,168,551 $ 15.76

Explanatory Notes :

3 unchanged sentences

(3) Includes 151,916 LTIP Units granted to the Company’s CEO, 51,490 LTIP Units granted to the Company’s President and 53,906 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 51,940 LTIP Units granted to certain other employees of the Company, certain of which vested fully on the date of grant with the remaining vesting over three years or cliff vest at the end of eight years .

(4) Includes 79,296 RSUs granted to certain officers and employees of the Company during the three months ended March 31, 2024, subject to the achievement of a service condition and a market condition.

Also, includes 43,526 LTIP Units granted to the Company's independent directors that vest over three years or cliff vest at the end of three years and 51,940 LTIP Units granted to certain other employees of the Company, certain of which vested fully on the date of grant with the remaining vesting over three years or cliff vest at the end of eight years .

(4) Includes 79,296 RSUs granted to certain officers and employees of the Company during the six months ended June 30, 2024, 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 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, 2026.

5 unchanged sentences

In February 2024, 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 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 three and six months ended June 30, 2024, the Company recognized compensation expense of $ 1.4 million and $ 3.2 million, respectively, and during the three and six months ended June 30, 2023, the Company recognized compensation expense of $ 1.2 million and $ 2.8 million, respectively, in “General and administrative expenses” in the Consolidated Statements of Operations and Comprehensive Income related to all awards.

During the three and six months ended June 30, 2024, the Company recognized compensation expense of $ 0.1 million and $ 0.4 million, respectively, and during

POSTAL REALTY TRUST, INC.

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (UNAUDITED)

During the three months ended March 31, 2024 and 2023, the Company recognized compensation expense of $ 1.8 million and $ 1.6 million, respectively, in “General and administrative expenses” and $ 0.3 million and $ 0.3 million, respectively, in "Property operating expenses" in the Consolidated Statements of Operations and Comprehensive Income (Loss) related to all awards.

As of March 31, 2024, there was $ 20.5 million of total unrecognized compensation cost related to unvested awards, which is expected to be recognized over a weighted average period of 5.2 years.

the three and six months ended June 30, 2023, the Company recognized compensation expense of $ 0.1 million and $ 0.4 million, respectively, in "Property operating expenses" in the Consolidated Statements of Operations and Comprehensive Income related to all awards.

As of June 30, 2024, there was $ 19.6 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.

In July 2024, the Company issued 4,545 LTIP Units to a consultant under the consultancy agreement with the Company.

Employee Stock Purchase Plan

2 unchanged sentences

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 March 31, 2024 and December 31, 2023, 49,657 and 44,520 shares have been issued under the ESPP since commencement, respectively.

During the three months ended March 31, 2024 and 2023, the Company recognized compensation expense of $ 0.01 million and $ 0.01 million, respectively, related to the ESPP.

As of June 30, 2024 and December 31, 2023, 49,657 and 44,520 shares have been issued under the ESPP since commencement, respectively.

During the three and six months ended June 30, 2024 , the Company recognized compensation expense of $ 0.01 million and $ 0.02 million, respectively and during the three and six months ended June 30, 2023, the Company recognized compensation expense of $ 0.01 million and $ 0.02 million, respectively, related to the ESPP.

Commitments and Contingencies

As of March 31, 2024, the Company was not involved in any litigation nor, to its knowledge, is any litigation threatened against the Company that, in management’s opinion, would result in any material adverse effect on the Company’s financial position and results of operations, or which is not covered by insurance.

As of June 30, 2024, the Company was not involved in any litigation nor, to its knowledge, is any litigation threatened against the Company that, in management’s opinion, would result in any material adverse effect on the Company’s financial position and results of operations, or which is not covered by insurance.

In the ordinary course of the Company’s business, the Company enters into non-binding (except with regard to exclusivity and confidentiality) letters of intent indicating a willingness to negotiate for acquisitions.

1 unchanged sentence

Subsequent Events

In addition to the subsequent events discussed elsewhere in the notes to the unaudited Consolidated Financial Statements, the following events occurred subsequent to March 31, 2024:

The Company's Board of Directors approved, and on April 30, 2024, the Company declared a first quarter 2024 common stock dividend of $ 0.24 per share, which is payable on May 31, 2024 to stockholders of record as of May 8, 2024.

As of May 7, 2024, the Company had $ 15.0 million drawn on the Revolving Credit Facility.

As of May 7, 2024 and d uring the period subsequent to March 31, 2024, the Company acquired six leased properties for approximately $ 4.1 million, excluding closing costs.

As of May 7, 2024 and d uring the period subsequent to March 31, 2024, the Company issued 57,993 shares of its Class A common stock under the ATM Program for gross proceeds of approximately $ 0.8 million.

As of May 7, 2024 and d uring the period subsequent to March 31, 2024, the Company had entered into definitive agreements to acquire 11 properties for approximately $ 3.5 million.

In addition to the subsequent events discussed elsewhere in the notes to the unaudited Consolidated Financial Statements, the following events occurred subsequent to June 30, 2024:

The Company's Board of Directors approved, and on July 23, 2024, the Company declared a second quarter 2024 common stock dividend of $ 0.24 per share, which is payable on August 30, 2024 to stockholders of record as of August 2, 2024.

As of August 6, 2024 , the Company had $ 39.0 million drawn on the Revolving Credit Facility.

As of August 6, 2024 and d uring the period subsequent to June 30, 2024, the Company acquired nine leased properties for approximately $ 3.4 million, excluding closing costs.

As of August 6, 2024 and d uring the period subsequent to June 30, 2024, the Company issued 306,708 shares of its Class A common stock under the ATM Program for gross proceeds of approximately $ 4.4 million.

As of August 6, 2024 and d uring the period subsequent to June 30, 2024, the Company had entered into definitive agreements to acquire 16 properties for approximately $ 4.7 million.

However, the Company can provide no assurances that the acquisitions of these properties will be consummated on the terms and timing the Company expects, or at all.

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-Q

Item 1. Financial Statements