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Item 1. Financial Statements

2025-08-04 compared with 2025-05-01 · 245 added, 149 removed, 567 unchanged (41% of the section changed)

21 unchanged sentences

Above market leases, net 251 305

Assets held for sale, net 637 —

Total Assets $ 689,822 $ 646,818

9 unchanged sentences

500,000,000 shares authorized;

23,696,171 and 23,494,487 shares issued and outstanding as of March 31, 2025 and December 31, 2024, respectively

24,237,197 and 23,494,487 shares issued and outstanding as of June 30, 2025 and December 31, 2024, 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, 2025 and December 31, 2024

27,206 shares issued and outstanding as of June 30, 2025 and December 31, 2024

Additional paid-in capital 318,914 310,031

8 unchanged sentences

POSTAL REALTY TRUST, INC.

CONSOLIDATED STATEMENTS OF OPERATIONS AND COMPREHENSIVE (LOSS) INCOME

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

2025 2024 2025 2024

Rental income $ 22,730 $ 17,364 $ 44,210 $ 33,969

5 unchanged sentences

General and administrative 4,316 3,920 9,252 8,213

Casualty and impairment losses, net 150 —

Casualty and impairment losses (gains), net ( 345 ) — ( 195 ) —

Depreciation and amortization 5,914 5,518 11,538 10,819

9 unchanged sentences

Income before income tax expense

4,682 1,060 7,351 1,332

Income tax expense

4 unchanged sentences

Net income attributable to common stockholders $ 3,614 $ 817 $ 5,696 $ 1,023

Net income (loss) per share:

Net income per share:

Basic and Diluted $ 0.12 $ 0.02 $ 0.19 $ 0.01

1 unchanged sentence

Basic and Diluted 23,509,083 22,339,245 23,375,607 22,192,277

Comprehensive (loss) income:

Comprehensive income:

Net income $ 4,672 $ 1,032 $ 7,327 $ 1,288

Unrealized (loss) gain on derivative instruments ( 1,625 ) 14 ( 4,469 ) 2,833

Comprehensive (loss) income ( 189 ) 3,075

Comprehensive loss (income) attributable to operating partnership unitholders’ non-controlling interests 41 ( 602 )

Comprehensive (loss) income attributable to common stockholders $ ( 148 ) $ 2,473

Comprehensive income 3,047 1,046 2,858 4,121

Comprehensive income attributable to operating partnership unitholders’ non-controlling interests ( 690 ) ( 218 ) ( 648 ) ( 820 )

Comprehensive income attributable to common stockholders $ 2,357 $ 828 $ 2,210 $ 3,301

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

4 unchanged sentences

Stock Additional

Capital Accumulated Other Comprehensive Income (Loss) Accumulated Deficit Total Stockholders’

Capital Accumulated Other Comprehensive Income Accumulated Deficit Total Stockholders’

equity Operating

13 unchanged sentences

Balance – March 31, 2025 23,723,377 $ 237 $ 310,131 $ 3,001 $ ( 67,890 ) $ 245,479 $ 69,426 $ 314,905

Net proceeds from sale of common stock 529,828 5 7,556 — — 7,561 — 7,561

Issuance of operating partnership units in connection with acquisition transactions

— — — — — — 5,005 5,005

Shares issued upon redemption of operating partnership units

11,198 — 157 — — 157 ( 157 ) —

Issuance and amortization of equity-based compensation, net of forfeitures — — 700 — — 700 870 1,570

Issuance and amortization under the ESPP

— — 19 — — 19 — 19

Dividends and distributions — — — — ( 5,822 ) ( 5,822 ) ( 1,731 ) ( 7,553 )

Unrealized loss on derivative instruments — — — ( 1,257 ) — ( 1,257 ) ( 368 ) ( 1,625 )

Net income — — — — 3,614 3,614 1,058 4,672

Reallocation of non-controlling interest — — 351 — — 351 ( 351 ) —

Balance – June 30, 2025 24,264,403 $ 242 $ 318,914 $ 1,744 $ ( 70,098 ) $ 250,802 $ 73,752 $ 324,554

Balance – December 31, 2023 21,960,211 $ 219 $ 287,268 $ 4,621 $ ( 48,546 ) $ 243,562 $ 58,063 $ 301,625

9 unchanged sentences

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

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:

7 unchanged sentences

Loss on sale of real estate assets 49 —

Gain on insurance proceeds received for damage due to property ( 842 ) ( 22 )

Equity based compensation 3,945 3,565

11 unchanged sentences

Capital improvements ( 3,007 ) ( 1,568 )

Insurance proceeds related to property damage claims 842 22

Other investing activities ( 140 ) ( 75 )

18 unchanged sentences

Reallocation of non-controlling interest 1,985 1,344

Transfer of investment properties, net to assets held for sale 637 —

Reclassification of acquisition deposits included in prepaid expenses and other assets 312 147

4 unchanged sentences

Accrued costs of capital included in accounts payable and accrued expenses 131 130

Shares issued upon redemption of operating partnership units 157 862

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, 2025, the Company held an approximately 78.0 % interest in the Operating Partnership.

As of June 30, 2025, the Company held an approximately 77.3 % 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, 2025, the Company owned a portfolio of 1,738 properties located in 49 states and one territory.

As of June 30, 2025, the Company owned a portfolio of 1,806 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”).

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 360 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.

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 358 postal 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 charter, 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.

11 unchanged sentences

Non-controlling interests are required to be presented as a separate component of equity in the Consolidated

POSTAL REALTY TRUST, INC.

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (UNAUDITED)

Balance Sheets.

27 unchanged sentences

The debt discounts are amortized to interest expense over the term of the related loans 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.

As of March 31, 2025 and December 31, 2024, the net unamortized debt discounts was $ 0.2 million.

As of June 30, 2025 and December 31, 2024, the net unamortized debt discounts was $ 0.2 million.

POSTAL REALTY TRUST, INC.

13 unchanged sentences

Total escrows and reserves

$ 1,007 $ 744

Cash and escrows and reserves $ 2,087 $ 2,543

2 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 (Loss) 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.

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 (Loss) Income 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).

Reimbursable expenses for the advisory services, including those relating to

POSTAL REALTY TRUST, INC.

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (UNAUDITED)

travel, out-of-pocket expenses, outside consultants and other outside service costs, are generally included in revenues and in general and administrative expenses in the period in which the expense is incurred.

2 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, 2025 and December 31, 2024.

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, 2025 and December 31, 2024.

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

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, 2025 and December 31, 2024 due to their short maturities.

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 June 30, 2025 and December 31, 2024 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, 2025 and December 31, 2024, 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 $ 29.3 million and $ 28.7 million as compared to the principal balance of $ 34.2 million and $ 34.3 million as of March 31, 2025 and December 31, 2024, respectively.

The fair value was determined using the Adjusted Term SOFR (as defined below) as of June 30, 2025 and December 31, 2024, 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 $ 29.5 million and $ 28.7 million as compared to the principal balance of $ 34.2 million and $ 34.3 million as of June 30, 2025 and December 31, 2024, 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, 2025 and December 31, 2024, the fair value of the Company’s interest rate swap derivative assets was approximately $ 4.3 million and $ 6.7 million, respectively, included in “Prepaid expenses and other assets, net” on the Consolidated Balance Sheets.

As of March 31, 2025 and December 31, 2024, the fair value of the Company's interest rate swap derivative liabilities was approximately $ 0.7 million and $ 0.3 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, 2025 and December 31, 2024.

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, 2025 and current estimates of fair value may differ significantly from the amounts presented herein.

As of June 30, 2025 and December 31, 2024, the fair value of the Company’s interest rate swap derivative assets was approximately $ 3.1 million and $ 6.7 million, respectively, included in “Prepaid expenses and other assets, net” on the Consolidated Balance Sheets.

As of June 30, 2025 and December 31, 2024, the fair value of the Company's interest rate swap derivative liabilities was approximately $ 1.1 million and $ 0.3 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, 2025 and December 31, 2024.

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, 2025 and current estimates of fair value may differ significantly from the amounts presented herein.

Derivative Instruments and Hedging Activities

13 unchanged sentences

Following the classification of a property as “held for sale,” no further depreciation or amortization is recorded on the assets and the assets are recorded at the lower of carrying value or fair market value, less cost to sell.

No properties were classified as held for sale as of March 31, 2025 and December 31, 2024.

The Company had one property classified as held for sale as of June 30, 2025 as a result of a tenant exercising a purchase option.

No properties were classified as held for sale as of December 31, 2024.

Impairment of Long-Lived Assets

5 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.

During the three months ended March 31, 2025, the Company assessed the recoverability of the carrying amount of its real estate and related intangibles.

The assessment resulted in the remeasurement of one property, based upon an

accumulation of costs in excess of what was originally expected, and such property was written down to its estimated fair value and was classified as Level 3 in the fair value hierarchy.

During the six months ended June 30, 2025, the Company assessed the recoverability of the carrying amount of its real estate and related intangibles.

The assessment resulted in the remeasurement of one property, based upon an accumulation of costs in excess of what was originally expected, and such property was written down to its estimated fair value and was classified as Level 3 in the fair value hierarchy.

The Company's estimate of the fair value was based on a discounted cash flow analysis.

The Company used two significant unobservable inputs which was the cash flow discount rate ( 11.0 %) and the terminal capitalization rate ( 10.0 %).

The remeasurement resulted in an impairment loss of $ 0.1 million, which is included in "Casualty and impairment loss, net" in the Company's Consolidated Statements of Operations and Comprehensive (Loss) Income.

No impairments were recorded for the three months ended March 31, 2024.

The remeasurement resulted in an impairment loss of $ 0.1 million, which is included in "Casualty and impairment losses (gains), net" in the Company's Consolidated Statements of Operations and Comprehensive Income.

No impairments were recorded for the six months ended June 30, 2024.

The Company uses the held for sale impairment model for our properties classified as held for sale, which is different from the held and used impairment model.

Under the held for sale impairment model, an impairment charge is recognized if the carrying amount of the long-lived asset classified as held for sale exceeds its fair value less cost to sell.

Because of these two different models, it is possible for a long-lived asset previously classified as held and used to require the recognition of an impairment charge upon classification as held for sale.

The Company recorded an impairment of $ 0.2 million which is included in "Casualty and impairment losses (gains), net" in the Company's Consolidated Statements of Operations and Comprehensive Income for the three and six months ended June 30, 2025.

Concentration of Credit Risks

As of March 31, 2025, the Company’s properties were leased primarily to a single tenant, the USPS.

For the three months ended March 31, 2025, approximately 11.0 % of the Company’s total rental income, or $ 2.4 million, was concentrated in Pennsylvania.

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.

As of June 30, 2025, the Company’s properties were leased primarily to a single tenant, the USPS.

For the six months ended June 30, 2025, approximately 10.6 % of the Company’s total rental income, or $ 4.7 million, was concentrated in Pennsylvania.

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.

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.

3 unchanged sentences

The Company accounts for equity-based compensation in accordance with ASC Topic 718 Compensation – Stock Compensation, which requires the Company to recognize an expense for the grant date fair value of equity-based awards.

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.

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

2 unchanged sentences

Stockholders’ Equity for further details.

POSTAL REALTY TRUST, INC.

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (UNAUDITED)

Insurance Accounting

1 unchanged sentence

The Company records the estimated amount of expected insurance proceeds for property damage and other losses incurred as an asset (typically a receivable from the insurer) and income up to the amount of the losses incurred when the amount is determinable and approved by the insurance company.

Any amount of insurance recovery in excess of the amount of the losses incurred is considered a gain contingency and is not recorded in other income until the amount is determinable and approved by the insurance company.

Any amount of insurance recovery in excess of the amount of the losses incurred is considered a gain contingency and is not recorded in casualty and impairment losses (gains), net until the amount is determinable and approved by the insurance company.

Insurance recoveries for business interruption for lost revenue or profit are accounted for as gain contingencies in their entirety, and therefore are not recorded in income until the amount is determinable and approved by the insurance company.

1 unchanged sentence

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, 2025 and 2024, 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, 2025 and 2024, 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.

7 unchanged sentences

We are currently evaluating the potential impact of adopting ASU 2024-03.

POSTAL REALTY TRUST, INC.

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (UNAUDITED)

Real Estate Transactions

The following tables summarizes the Company’s acquisitions for the three months ended March 31, 2025.

The following table summarizes the Company’s acquisitions for the six months ended June 30, 2025.

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.

3 unchanged sentences

Improvements Tenant

Improvements In-place

intangibles Above-

Improvements In-place lease intangibles Above-

leases Below-

1 unchanged sentence

March 31, 2025 (3) 36 $ 3,990 $ 12,579 $ 114 $ 1,192 $ — $ ( 1,415 ) $ ( 119 ) $ 16,341

June 30, 2025 (4) 68 $ 8,402 $ 28,473 $ 269 $ 2,775 $ 11 $ ( 3,131 ) $ 68 $ 36,867

Total 104 12,392 41,052 383 3,967 11 ( 4,546 ) ( 51 ) 53,208

Explanatory Notes :

(1) Includes intangible liabilities related to unfavorable operating leases with purchase options on three properties during the three months ended March 31, 2025 that is included in “Accounts payable, accrued expenses and other, net" on the Consolidated Balance Sheets.

(2) Includes closing costs of approximately $ 0.5 million for the three months ended March 31, 2025 .

(1) Includes intangible liabilities related to unfavorable operating leases with purchase options on three properties during the three months ended March 31, 2025 and two properties during the three months ended June 30, 2025 that is included in “Accounts payable, accrued expenses and other, net" on the Consolidated Balance Sheets.

Also, includes a below market ground lease intangible asset on four properties during the three months ended June 30, 2025 that is included in “Prepaid expenses and other assets, net" on the Consolidated Balance Sheets.

(2) Includes closing costs of approximately $ 0.5 million for the three months ended March 31, 2025 and $ 1.0 million for the three months ended June 30, 2025.

(3) Includes the acquisition of 36 properties in various states in individual or portfolio transactions for a price of approximately $ 16.3 million, including closing costs, which was funded with both the issuance of OP Units to the sellers (valued at approximately $ 1.0 million using the share price of Class A common stock on the date of the issuance of such OP units) and cash consideration.

(4) Includes the acquisition of 68 properties in various states in individual or portfolio transactions for a price of approximately $ 36.9 million, including closing costs, which were funded with both the issuance of OP Units to the sellers (valued at approximately $ 5.0 million using the share price of Class A common stock on the date of each issuance of such OP units) and cash consideration.

Sale of Real Estate

During the three months ended March 31, 2025, the Company sold one real estate property for net proceeds of $ 0.8 million and recorded a loss of $ 0.05 million.

POSTAL REALTY TRUST, INC.

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (UNAUDITED)

Casualty Loss, Net

During the three months ended March 31, 2025, the Company recognized $ 0.5 million in gross charges primarily related to the net book value of two properties damaged and related repairs, partially offset by an estimated $ 0.4 million of related insurance claims, that are included in “Rent and other receivables” on the Consolidated Balance Sheets, that the Company believes is probable it will recover, resulting in a net charge of $ 0.1 million included within "Casualty and impairment losses, net" in the Consolidated Statement of Operations and Comprehensive (Loss) Income.

During the six months ended June 30, 2025, the Company sold one real estate property for net proceeds of $ 0.8 million and recorded a loss of $ 0.05 million.

Assets Held for Sale

During the three and six months ended June 30, 2025 as a result of a tenant exercising a purchase option for one property, the Company reclassified the carrying value consisting of $ 0.1 million of land and $ 0.5 million of buildings and other real estate assets to "Assets held for sale, net" on the Company's Consolidated Balance Sheet and liabilities held for sale of $ 0.1 million is included as "Accounts payable, accrued expenses and other, net" on the Company's Consolidated Balance Sheet.

Refer to Note 2, Impairment of Long-lived Assets for further discussion.

Casualty and Impairment Losses (Gains), Net

During the three and six months ended June 30, 2025, the Company recognized $ 0.1 million and $ 0.6 million, respectively, in gross charges primarily related to the estimated net book value of several properties damaged and related repairs, offset by an estimated $ 0.6 million and $ 1.0 million, respectively, of related insurance claims, resulting in a net recovery of $ 0.5 million and

$ 0.4 million, respectively, included within “Casualty and impairment losses (gains), net” on the Consolidated Statement of Operations and Comprehensive Income.

The Company expects insurance proceeds to cover substantially all of such loss subject to applicable deductibles.

The Company has comprehensive all risk property insurance coverage on its two properties subject to the casualty losses, including for business interruption, with an aggregate $ 15.2 million limit of liability, subject to conditions, exclusions, deductibles and sub-limits.

To the extent insurance proceeds ultimately exceed the difference between replacement cost and net book value of the damaged assets and any related expenses incurred, the excess will be reflected as income in the period those amounts are determinable and approved by the insurance company.

No determination has been made as to the total amount of timing of insurance payments that may be received as a result of the events.

POSTAL REALTY TRUST, INC.

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (UNAUDITED)

Intangible Assets and Liabilities

3 unchanged sentences

(in thousands)

March 31, 2025:

June 30, 2025:

In-place lease intangibles

13 unchanged sentences

( 29,069 ) 12,898 ( 16,171 )

Amortization of in-place lease intangibles was $ 1.7 million for the three months ended March 31, 2025 and $ 1.8 million for the three months ended March 31, 2024, respectively.

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

Amortization of acquired above-market leases was $ 0.03 million and $ 0.05 million for each of the three months ended March 31, 2025 and 2024, and is included in “Rental income” in the Consolidated Statements of Operations and Comprehensive (Loss) Income.

Amortization of other intangibles was $ 0.1 million for the three months ended March 31, 2025 and $ 0.1 million for the three months ended March 31, 2024, respectively, and is included in "Rental income" in the Consolidated Statements of Operations and Comprehensive (Loss) Income.

Amortization of acquired below-market leases was $ 0.8 million for the three months ended March 31, 2025 and $ 0.7 million for the three months ended March 31, 2024, respectively, and is included in “Rental income” in the Consolidated Statements of Operations and Comprehensive (Loss) Income.

POSTAL REALTY TRUST, INC.

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (UNAUDITED)

Amortization of in-place lease intangibles was $ 1.8 million and $ 3.5 million for the three and six months ended June 30, 2025, respectively, and $ 2.0 million and $ 3.8 million for the three and six months ended June 30, 2024, 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 $ 0.03 million and $ 0.06 million for the three and six months ended June 30, 2025, respectively, and $ 0.04 million and $ 0.09 million for the three and six months ended June 30, 2024, respectively, and is included in “Rental income” in the Consolidated Statements of Operations and Comprehensive Income.

Amortization of other intangibles was $ 0.1 million and $ 0.2 million for the three and six months ended June 30, 2025, respectively, and $ 0.1 million and $ 0.1 million for the three and six months ended June 30, 2024, respectively, and is included in "Rental income" in the Consolidated Statements of Operations and Comprehensive Income.

Amortization of acquired below-market leases was $ 0.9 million and $ 1.6 million for the three and six months ended June 30, 2025, respectively, and $ 0.8 million and $ 1.5 million for the three and six months ended June 30, 2024, 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

$ 13,123 $ 251 $ ( 700 ) $ ( 19,066 )

The following table summarizes the Company’s indebtedness as of March 31, 2025 and December 31, 2024 (dollars in thousands):

The following table summarizes the Company’s indebtedness as of June 30, 2025 and December 31, 2024 (dollars in thousands):

Balance as of

32 unchanged sentences

On October 25, 2024, the Company amended the Credit Facilities (the "Third Amendment") to, among other things, increase the 2022 Term Loan commitments in an aggregate principal amount of up to $ 50.0 million in which the Company further exercised $ 40.0 million under the 2022 Term Loan, and on a delayed-draw basis, $ 10.0 million.

POSTAL REALTY TRUST, INC.

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (UNAUDITED)

The Credit Facilities include an accordion feature which permits the Company to borrow up to an additional (i) $ 150.0 million under the Revolving Credit Facility and (ii) $ 50.0 million under the Term Loans, subject to customary terms and conditions.

1 unchanged sentence

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.

With respect to the Revolving Credit Facility, the Company will pay, if the usage is equal to or less than 50 %, an unused facility fee of 0.20 % per annum, or if the usage is greater than 50 %, an unused facility fee of 0.15 % per annum, in each case on the average daily unused commitments under the Revolving Credit Facility.

POSTAL REALTY TRUST, INC.

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (UNAUDITED)

commitments under the Revolving Credit Facility.

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

During the three months ended March 31, 2025, the Company incurred $ 0.06 million and during the three months ended March 31, 2024, the Company incurred $ 0.07 million of unused facility fees related to the Revolving Credit Facility.

As of March 31, 2025, the Company was in compliance with all of the Credit Facilities’ debt covenants.

During the three and six months ended June 30, 2025, the Company incurred $ 0.05 million and $ 0.1 million, respectively, and during the three and six months ended June 30, 2024, the Company incurred $ 0.06 million and $ 0.1 million, respectively, of unused facility fees related to the Revolving Credit Facility.

As of June 30, 2025, the Company was in compliance with all of the Credit Facilities’ debt covenants.

(2) Based upon the applicable SOFR rate plus a SOFR adjustment of 0.10 %, subject to a 0 % floor (the “Adjusted Term SOFR”) .

11 unchanged sentences

(8) In connection with the acquisition of two properties, the Company obtained seller financing secured by the properties in the amount of $ 1.4 million based on a fixed interest rate of 5.00 % with interest-only payments through September 1, 2039.

The weighted average maturity date for the Company's indebtedness as of March 31, 2025 and December 31, 2024 was approximately 2.9 years and 3.2 years, respectively.

POSTAL REALTY TRUST, INC.

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (UNAUDITED)

The scheduled principal repayments of indebtedness as of March 31, 2025 are as follows (in thousands):

The weighted average maturity date for the Company's indebtedness as of June 30, 2025 and December 31, 2024 was approximately 2.5 years and 3.2 years, respectively.

The scheduled principal repayments of indebtedness as of June 30, 2025 are as follows (in thousands):

Year Ending December 31, Amount

2025 - Remaining $ 9

Explanatory Note :

(1) The Revolving Credit Facility matures in January 2026, which may be extended for two six-month periods.

The Company is currently exploring various refinancing options (the "Refinancing") and believes that it will be successful in extending or Refinancing the Revolving Credit Facility.

Derivatives and Hedging Activities

As of March 31, 2025, the Company had nine interest rate swaps with a total notional amount of $ 250.0 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, 2025, the Company had nine interest rate swaps with a total notional amount of $ 250.0 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)

13 unchanged sentences

To accomplish these objectives, the Company uses the interest rate swaps as part of its interest rate risk management strategy.

The interest rate swaps are designated as cash flow hedges, with any gain or loss recorded in “Accumulated other comprehensive (loss) income” on the Consolidated Balance Sheets and subsequently reclassified into interest expense as interest payments are made on the Credit Facilities.

During the next twelve months, the Company estimates that an additional $ 2.4 million will be reclassified from “Accumulated other comprehensive (loss) income” as a decrease to interest expense.

The interest rate swaps are designated as cash flow hedges, with any gain or loss recorded in “Accumulated other comprehensive income” on the Consolidated Balance Sheets and subsequently reclassified into interest expense as interest payments are made on the Credit Facilities.

During the next twelve months, the Company estimates that an additional $ 2.2 million will be reclassified from “Accumulated other comprehensive income” as a decrease to interest expense.

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

POSTAL REALTY TRUST, INC.

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (UNAUDITED)

The table below presents the effect of the Company’s interest rate swap derivative instruments in the Consolidated Statements of Operations and Comprehensive (Loss) Income for the three months ended March 31, 2025 and 2024 (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, 2025 and 2024 (in thousands):

For the Three Months Ended

June 30, For the Six Months Ended

Derivatives in Cash Flow Hedging Relationships (Interest Rate Swaps) 2025 2024 2025 2024

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

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

$ ( 736 ) $ 1,341 $ ( 2,697 ) $ 5,491

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

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

$ 889 $ 1,327 $ 1,772 $ 2,658

"Interest expense, net" presented in the Consolidated Statements of Operations and Comprehensive (Loss) Income, in which the effects of cash flow hedges are recorded, totaled $ 3.6 million for the three months ended March 31, 2025 and $ 2.8 million for the three months ended March 31, 2024.

As of March 31, 2025, 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, 2025, it could have been required to settle its obligations under the agreements of any interest rate swap in a net liability position for approximately $ 0.7 million, which is at their termination value.

"Interest expense, net" presented in the Consolidated Statements of Operations and Comprehensive Income, in which the effects of cash flow hedges are recorded, totaled $ 4.0 million and $ 7.7 million for the three and six months ended June 30, 2025, respectively, and $ 3.1 million and $ 5.9 million for the three and six months ended June 30, 2024, respectively.

As of June 30, 2025, 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, 2025, it could have been required to

POSTAL REALTY TRUST, INC.

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (UNAUDITED)

settle its obligations under the agreements of any interest rate swap in a net liability position for approximately $ 1.1 million, which is at their termination value.

Lessor Accounting

As of March 31, 2025, the Company's properties were leased primarily to the USPS, with leases expiring at various dates through June 30, 2035.

Certain leases had expired and were in holdover status as of March 31, 2025 as discussed below.

As of June 30, 2025, the Company's properties were leased primarily to the USPS, with leases expiring at various dates through October 31, 2035.

Certain leases had expired and were in holdover status as of June 30, 2025 as discussed below.

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

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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 (Loss) Income.

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

2025 2024 2025 2024

Fixed payments

2 unchanged sentences

2,675 2,245 5,494 4,410

POSTAL REALTY TRUST, INC.

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (UNAUDITED)

Future minimum lease payments to be received as of March 31, 2025 (excluding base rental payments from properties classified as held for sale under non-cancellable operating leases for the next five years and thereafter are as follows (in thousands):

$ 22,730 $ 17,364 $ 44,210 $ 33,969

Future minimum lease payments to be received as of June 30, 2025 (excluding base rental payments from properties classified as held for sale under non-cancellable operating leases for the next five years and thereafter are as follows (in thousands):

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

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, 2025, the leases at seven of the Company's properties were expired and the USPS was occupying such properties as a holdover tenant.

(2) As of June 30, 2025, the leases at three 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

Purchase Option Provisions

As of March 31, 2025, operating leases for 88 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 (1) , in each case as of dates set forth in the lease.

As of March 31, 2025, 85 of these properties had an aggregate carrying value of approximately $ 62.5 million with an aggregate purchase option price of approximately $ 80.4 million and the remaining three properties had an aggregate carrying value of approximately $ 3.0 million with purchase options exercisable at fair market value.

As of June 30, 2025, operating leases for 90 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 (1) , in each case as of dates set forth in the lease.

As of June 30, 2025, 87 of these properties had an aggregate carrying value of approximately $ 66.0 million with an aggregate purchase option price of approximately $ 85.4 million and the remaining three properties had an aggregate carrying value of approximately $ 2.9 million with purchase options exercisable at fair market value.

During the three and six months ended June 30, 2025, a tenant exercised a purchase option.

Refer to Note 2, Assets Held for Sale for further discussion.

Explanatory Notes :

1 unchanged sentence

Investment in Financing Leases, Net

As of March 31, 2025 and December 31, 2024, 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, 2025 and December 31, 2024 are summarized in the table below (in thousands):

As of June 30, 2025 and December 31, 2024, 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, 2025 and December 31, 2024 are summarized in the table below (in thousands):

Total minimum lease payment receivable

3 unchanged sentences

Investment in financing leases, net $ 15,897 $ 15,951

POSTAL REALTY TRUST, INC.

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (UNAUDITED)

Revenue earned under direct financing leases for each of the three months ended March 31, 2025 and 2024 were $ 0.3 million, which is recorded in "Fee and other" in the Consolidated Statements of Operations and Comprehensive (Loss) Income.

Future lease payments to be received under the Company’s direct financing leases as of March 31, 2025 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, 2025 and 2024 were $ 0.3 million and $ 0.5 million, respectively, 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, 2025 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, 2025, these leases had remaining terms, including renewal options, of 0.3 years to 57.8 years and a weighted average remaining lease term of 21.3 years.

As of June 30, 2025, these leases had remaining terms, including renewal options, of 0.1 years to 57.5 years and a weighted average remaining lease term of 18.5 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

7 unchanged sentences

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, 2025 and 2024 was $ 0.09 million and $ 0.07 million, respectively.

Operating lease expense for the three and six months ended June 30, 2025 and 2024 was $ 0.09 million and $ 0.2 million, respectively, and $ 0.07 million and $ 0.1 million , respectively.

Related Party Transactions for more details.

POSTAL REALTY TRUST, INC.

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (UNAUDITED)

Future minimum lease payments to be paid by the Company as a lessee for operating leases as of March 31, 2025 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, 2025 for the next five years and thereafter are as follows (in thousands):

2025 — Remaining $ 169

3 unchanged sentences

REAC performs management services, including for properties the Company does not own, and advisory services to third-party owners of postal properties.

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

For the three months ended March 31, 2025 and 2024, income tax expense related to REAC was $ 0.01 million and $ 0.01 million, respectively.

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

For the three and six months ended June 30, 2025, income tax expense related to REAC was zero and $ 0.01 million, respectively.

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.

Related Party Transactions

Transition and General Release Agreement with Former Chief Financial Officer

On June 18, 2025 (the "Transition Date"), Robert B.

Klein announced his intention to resign from his role as Chief Financial Officer of the Company but continued as an employee of the Company through June 30, 2025 (the “Separation Date,” the period from the Transition Date to the Separation Date is referred to as the “Transition Period”).

Subject to the terms of Transition and General Release Agreement dated June 18, 2025 between the Company and Mr.

Klein (the “Transition Agreement”), Mr.

Klein will provide consulting services to the Company beginning on the day following the Separation Date until the date the Company files its Form 10-Q for the period ending June 30, 2025 (the “Completion Date” and such period, the

“Consulting Period”).

Klein will continue serving as the Company’s principal financial officer through the end of the Consulting Period.

The Transition Agreement sets forth Mr.

Klein’s separation benefits and the terms pursuant to which Mr.

Klein will assist the Company in the transition of his roles through the Transition Period and the Consulting Period.

During each of the Transition Period and the Consulting Period, Mr.

Klein will continue to oversee and assist with the preparation of the Company’s Form 10-Q for the period ending on June 30, 2025 and, unless the Company determines otherwise, shall sign the Form 10-Q (and any related documentation) in his capacity as principal financial officer (the “Transition Support Duties”).

In accordance with the Transition Agreement, during the Transition Period, subject to Mr.

Klein’s performance of the Transition Support Duties, the Company will pay Mr.

Klein his regular base salary, less applicable taxes, withholdings and deductions payable in accordance with the Company’s current payroll practices and Mr.

Klein shall be entitled to continue to participate in any employee benefit plan that the Company has adopted or may adopt, until the Separation Date.

As set forth in the Transition Agreement, pursuant to the terms of the Company's 2019 Equity Incentive Plan (the “Equity Plan”), including, but not limited to, the Alignment of Interest Program under the Equity Plan (the “AOI”), and the award agreements issued thereunder (the “Award Agreements” and collectively with the Equity Plan and AOI, the “Equity Plan Governing Documents”) Mr.

Klein has been granted certain equity awards which remain outstanding, unconverted and unvested as of the Separation Date (the “Unvested Awards”).

Klein fully complies with the terms and conditions set forth in the Transition Agreement, including the execution of the supplemental release attached thereto and performance of the Transition Support Duties, the Company will pay Mr.

Klein a gross amount equal to $ 500,000 , less applicable taxes, withholdings and deductions (the “Consideration”).

The Company will pay the Consideration in part by accelerating the vesting of 28,000 Unvested Awards (as determined in the Company’s sole discretion) (the “Selected Awards”), with the remainder to be paid in cash.

The terms governing the acceleration of the Selected Awards and the payment of the Consideration are described in the Transition Agreement.

Notwithstanding anything to the contrary in any Equity Plan Governing Document, (i) Mr.

Klein’s Unvested Awards, other than the Selected Awards, will automatically and immediately be cancelled and forfeited, and will lapse for no consideration, effective as of July 1, 2025, (ii) the Selected Awards will remain outstanding and eligible to vest following the Separation Date in accordance with the terms of the Transition Agreement and (iii) to the extent the Consideration is not earned, the Selected Awards will automatically and immediately be cancelled and forfeited and will lapse for no consideration, effective as of the Completion Date (or such earlier date as determined by the Company, in its sole discretion).

Pursuant to the terms of the Transition Agreement, Mr.

Klein will be subject to continued compliance with confidentiality, non-disparagement and cooperation covenants.

In conjunction with the Company's search for a new Chief Financial Officer, the Company has retained an executive search firm that employs an immediately family member of one of our directors.

Jeremy Garber, who immediately prior to Mr.

Klein's resignation as Chief Financial Officer of the Company was the Company's President, Secretary and Treasurer, is serving as the interim Chief Financial Officer of the Company while the search for Mr.

Klein's successor is completed.

Management Fee Income

REAC recognized management fee income of $ 0.4 million for the three months ended March 31, 2025 and $ 0.3 million for the three months ended March 31, 2024 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 (Loss) Income.

Accrued management fees receivable of $ 0.7 million and $ 0.4 million as of March 31, 2025 and December 31, 2024, respectively, are included in “Rent and other receivables” on the Consolidated Balance Sheets.

On May 5, 2025, REAC entered into amendments to the management agreements (as amended, the “Amended Management Agreements”) pursuant to which the Company provides property management services to 362 properties, owned by family members and affiliates of Mr.

An additional property for which REAC provides management services to affiliates of Mr.

Spodek was not amended by the Amended Management Agreements.

The Amended Management Agreements provide that, as of April 1, 2025, the initial management fee to be received by REAC is equal to 4.0 % per annum of each property’s gross revenue, payable quarterly.

Each successive April 1, the management fee will be increased to 102.5 % of the management fee previously in effect.

The initial term of the Amended Management Agreements is through March 31, 2030 (the “Initial Term”), unless terminated earlier.

After the Initial Term, the Amended Management Agreements will be automatically renewed for successive one-year terms, unless either party provides 30 days' advance notice of non-renewal.

Furthermore, beginning October 1, 2025, the Amended Management Agreements may be terminated by either party at any time upon 60 days’ notice to the other party.

The Amended Management Agreements also provide that, to the extent REAC provides services in connection with the financing of managed properties, REAC shall be entitled to an additional $ 5,000 fee per property being financed, whether such properties are financed individually, as part of a portfolio or pooled, provided that the total fees payable shall not exceed $ 50,000 per financing transaction.

POSTAL REALTY TRUST, INC.

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (UNAUDITED)

Management Agreements were unanimously approved by an independent Special Committee of the Company's Board of Directors (the "Board") consisting of all members of the Board other than Mr.

REAC recognized management fee income of $ 0.2 million and $ 0.6 million for the three and six months ended June 30, 2025, respectively, and $ 0.3 million and $ 0.7 million for the three and six months ended June 30, 2024, 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 $ 0.2 million and $ 0.4 million as of June 30, 2025 and December 31, 2024, respectively, are included in “Rent and other receivables” on the Consolidated Balance Sheets.

Related Party Lease

7 unchanged sentences

The 2025 Office Lease was approved by a special committee of the Company’s Board of Directors consisting of four independent directors.

Rental expenses associated with the Office Leases for the three months ended March 31, 2025 and 2024 were $ 0.06 million and $ 0.05 million, respectively, and was recorded in “General and administrative expenses” in the Consolidated Statements of Operations and Comprehensive (Loss) Income.

Rental expenses associated with the Office Leases for the three and six months ended June 30, 2025 and 2024 were $ 0.06 million and $ 0.1 million, respectively, and $ 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.

The Company determined the Office Leases were an operating lease.

1 unchanged sentence

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.

POSTAL REALTY TRUST, INC.

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (UNAUDITED)

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

The Company has a remaining right of first offer to purchase 214 of the 360 managed properties.

The Company has a remaining right of first offer to purchase 214 of 358 managed postal properties.

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 $ 1.8 million and $ 1.8 million as of March 31, 2025 and December 31, 2024, respectively.

As a guarantor, Mr.

4 unchanged sentences

For the Three Months Ended

June 30, For the Six Months Ended

2025 2024 2025 2024

Numerator for earnings per share – basic and diluted:

4 unchanged sentences

23,509,083 22,339,245 23,375,607 22,192,277

Basic and diluted net (loss) income per share $ 0.06 $ ( 0.01 )

Basic and diluted net income per share $ 0.12 $ 0.02 $ 0.19 $ 0.01

Explanatory Note :

11 unchanged sentences

(“M&T”), as additional sales agents, and affiliates of Mizuho, as forward sellers.

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 and six months ended June 30, 2025, 529,828 and 669,454 shares, respectively, were issued under the ATM program.

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

As of June 30, 2025, the Company had approximately $ 83.9 million remaining that may be issued under the ATM Program.

POSTAL REALTY TRUST, INC.

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (UNAUDITED)

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, 2025, 139,626 shares were issued under the ATM program.

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

As of March 31, 2025, the Company had approximately $ 91.7 million remaining that may be issued under the ATM Program.

Three Months Ended

June 30, Six Months Ended

2025 2024 2025 2024

Shares issued

530 58 669 634

Gross proceeds received

4 unchanged sentences

Dividends and Distributions

During the three months ended March 31, 2025, the Company's Board of Directors approved and the Company declared and paid dividends or distributions, as applicable, of $ 7.4 million to Class A common stockholders, Voting Equivalency stockholders, OP unitholders and LTIP unitholders, or $ 0.2425 per share or unit as shown in the table below.

During the three and six months ended June 30, 2025, the Company's Board of Directors approved and the Company declared and paid dividends or distributions, as applicable, of $ 7.6 million and $ 14.9 million, respectively to Class A common stockholders, Voting Equivalency stockholders, OP unitholders and LTIP unitholders, or $ 0.2425 and $ 0.485 per share or unit, respectively as shown in the table below.

Declaration Date Record Date Date Paid Amount Per Share or Unit

January 30, 2025 February 14, 2025 February 28, 2025 $ 0.2425

April 21, 2025 May 1, 2025 May 30, 2025 $ 0.2425

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, 2025, the Company issued 219,335 LTIP Units to the Company’s CEO for his 2024 incentive bonus, his election to defer 100 % of his 2025 annual salary and for long term incentive compensation, 90,909 LTIP Units to the Company’s President for his 2024 incentive bonus, 12,952 LTIP Units to the Company's Chief Financial Officer for his long term incentive compensation and 121,913 LTIP Units to certain other employees for their 2024 incentive bonus and for long term incentive compensation.

As of March 31, 2025 and December 31, 2024, non-controlling interests consisted of 5,071,875 OP Units and 1,687,053 LTIP Units and 4,998,738 OP Units and 1,241,944 LTIP Units, respectively.

This represented approximately 22.1 % and 20.9 % of the outstanding Operating Partnership units as of March 31, 2025 and December 31, 2024, respectively.

During the six months ended June 30, 2025, the Company issued 219,335 LTIP Units to the Company’s CEO for his 2024 incentive bonus, his election to defer 100 % of his 2025 annual salary and for long term incentive compensation, 90,909 LTIP Units to the Company’s President for his 2024 incentive bonus, 12,952 LTIP Units to the Company's Principal Financial Officer for his long term incentive compensation, 46,944 LTIP Units in May 2025 to the Board of Directors for their annual retainers as compensation for their services and for long term incentive compensation and 121,913 LTIP Units to certain other employees for their 2024 incentive bonus and for long term incentive compensation.

As of June 30, 2025 and December 31, 2024, non-controlling interests consisted of 5,463,804 OP Units and 1,722,799 LTIP Units and 4,998,738 OP Units and 1,241,944 LTIP Units, respectively.

This represented approximately 22.7 % and 20.9 % of the outstanding Operating Partnership units as of June 30, 2025 and December 31, 2024, 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, 2025, 11,198 LTIP Units were redeemed for 11,198 OP Units (the "Converted Units").

The Converted United were then immediately redeemed for 11,198 shares of Class A common stock (such transaction, including the transaction governing the Converted Units, the "Conversion").

In connection with the Conversion, 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.

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

1 unchanged sentence

Pursuant to the Postal Realty Trust Inc., 2019 Equity Incentive Plan, (the "Plan"), the Company may grant equity incentive awards to its directors, officers, employees and consultants.

As of March 31, 2025, the remaining shares available under the Plan for future issuance was 973,737 .

The Plan provides for grants of stock options, stock awards, stock appreciation

POSTAL REALTY TRUST, INC.

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (UNAUDITED)

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.

As of June 30, 2025, the remaining shares available under the Plan for future issuance was 945,434 .

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.

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, 2025 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, 2025 represents unvested restricted shares of Class A common stock and LTIP Units and RSUs that are outstanding, whether vested or not:

Shares (1)(2)

3 unchanged sentences

76,180 492,053 104,176 672,409 $ 12.88

Conversion to common stock — ( 11,198 ) — ( 11,198 ) $ 15.13

Vesting of restricted shares and RSUs (5)

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— — ( 47,005 ) ( 47,005 ) $ 12.28

Outstanding, as of March 31, 2025 527,147 1,687,053 402,675 2,616,875 $ 15.13

Outstanding, as of June 30, 2025 527,147 1,722,799 402,675 2,652,621 $ 15.10

Explanatory Notes :

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(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 219,335 LTIP Units granted to the Company’s CEO, 90,909 LTIP Units granted to the Company’s President and 12,952 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 121,913 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 90,362 RSUs granted to certain officers and employees of the Company during the three months ended March 31, 2025, subject to the achievement of a service condition and a market condition.

(3) Includes 219,335 LTIP Units granted to the Company’s CEO, 90,909 LTIP Units granted to the Company’s President and 12,952 LTIP Units granted to the Company's Principal Financial Officer, which vest over three years or cliff vest at the end of eight years .

Also, includes 46,944 LTIP Units granted to the Company's independent directors that vest over three years or cliff vest at the end of three years and 121,913 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 90,362 RSUs granted to certain officers and employees of the Company during the six months ended June 30, 2025, 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, 2027.

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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 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 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, 2022, the Company issued 47,005 RSUs (the “2022 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, 2024.

In January 2025, the Company's CGC Committee

In February 2024, the Company's Corporate Governance and Compensation Committee of the Board of Directors ("CGC Committee") determined that the Company's total

POSTAL REALTY TRUST, INC.

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (UNAUDITED)

determined that the Company's total stockholder return for such three-year performance period did not meet the threshold performance hurdles for the 2022 Performance-Based Awards and, as a result, approved the cancellation of 47,005 RSUs for such awards.

During the three months ended March 31, 2025, the Company recognized compensation expense of $ 2.0 million and during the three months ended March 31, 2024, the Company recognized compensation expense of $ 1.8 million in “General and administrative expenses” in the Consolidated Statements of Operations and Comprehensive (Loss) Income related to all awards.

During the three months ended March 31, 2025, the Company recognized compensation expense of $ 0.4 million and during the three months ended March 31, 2024, the Company recognized compensation expense of $ 0.3 million in "Property operating expenses" in the Consolidated Statements of Operations and Comprehensive (Loss) Income related to all awards.

As of March 31, 2025, there was $ 22.1 million of total unrecognized compensation cost related to unvested awards, which is expected to be recognized over a weighted average period of 5.09 years.

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.

In January 2025, the Company's CGC Committee determined that the Company's total stockholder return for such three-year performance period did not meet the threshold performance hurdles for the 2022 Performance-Based Awards and, as a result, approved the cancellation of 47,005 RSUs for such awards.

During the three and six months ended June 30, 2025, the Company recognized compensation expense of $ 1.5 million and $ 3.4 million, respectively, and during the three and six months ended June 30, 2024, the Company recognized compensation expense of $ 1.4 million and $ 3.2 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, 2025, the Company recognized compensation expense of $ 0.1 million and $ 0.5 million, respectively, and during the three and six months ended June 30, 2024, 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, 2025, there was $ 21.1 million of total unrecognized compensation cost related to unvested awards, which is expected to be recognized over a weighted average period of 4.9 years.

In July 2025, the Company issued 3,998 LTIP Units to a consultant under a consultancy agreement with the Company.

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 March 31, 2025 and December 31, 2024, 64,096 and 58,569 shares have been issued under the ESPP since commencement, respectively.

During the three months ended March 31, 2025 , the Company recognized compensation expense of $ 0.02 million and during the three months ended March 31, 2024, the Company recognized compensation expense of $ 0.01 million related to the ESPP.

As of June 30, 2025 and December 31, 2024, 64,096 and 58,569 shares have been issued under the ESPP since commencement, respectively.

During the three and six months ended June 30, 2025, the Company recognized compensation expense of $ 0.02 million and $ 0.04 million, respectively, and during the three and six months ended June 30, 2024, 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, 2025, 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, 2025, 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.

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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, 2025:

The Company's Board of Directors approved, and on April 21, 2025, the Company declared a first quarter 2025 common stock dividend of $ 0.2425 per share, which is payable on May 30, 2025 to stockholders of record as of May 1, 2025.

As of April 30, 2025 , the Company had $ 33.0 million drawn on the Revolving Credit Facility.

As of April 30, 2025 and d uring the period subsequent to March 31, 2025, the Company acquired 25 leased properties for approximately $ 12.7 million, excluding closing costs.

As of April 30, 2025 and d uring the period subsequent to March 31, 2025, the Company issued 109,374 shares of its Class A common stock under the ATM Program for gross proceeds of approximately $ 1.6 million.

As of April 30, 2025 and d uring the period subsequent to March 31, 2025, the Company had entered into definitive agreements to acquire 51 properties for approximately $ 30.7 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, 2025:

On July 1, 2025, 112,718 unvested LTIP Units, 40,623 unvested RSUs and 18,460 unvested shares of Class A common stock owned by Robert Klein, were cancelled pursuant to the Transition Agreement (the "Klein Award Cancellations").

The Company's Board of Directors approved, and on July 20, 2025, the Company declared a second quarter 2025 common stock dividend of $ 0.2425 per share, which is payable on August 29, 2025 to stockholders of record as of July 31, 2025.

As of August 4, 2025 , the Company had $ 48.0 million drawn on the Revolving Credit Facility.

As of August 4, 2025 and d uring the period subsequent to June 30, 2025, the Company acquired 23 leased properties for approximately $ 8.4 million, excluding closing costs.

As of August 4, 2025 and d uring the period subsequent to June 30, 2025, the Company issued 337,255 shares of its Class A common stock under the ATM Program for gross proceeds of approximately $ 5.0 million.

As of August 4, 2025 and d uring the period subsequent to June 30, 2025, the Company had entered into definitive agreements to acquire 30 properties for approximately $ 10.4 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