DALLAS, TX -- June 1, 2026 -- Initiates Coverage on Postal Realty Trust Inc. (NYSE: PSTL): Stonegate Capital Partners Initiates Coverage on Postal Realty Trust Inc. (NYSE: PSTL). PSTL’s 1Q26 update improved the setup by increasing forward revenue visibility and accelerating acquisition capacity at the same time. In our view, the thesis is becoming easier to underwrite, as the lease platform is producing clearer internal growth through mark-to-market resets and escalators, while improved capital access is adding a more active external growth leg. The next few quarters should be defined by acquisition conversion, continued lease book modernization, and leverage-neutral funding.
Quarterly Results: 1Q26 was higher quality than the simple y/y AFFO bridge suggests. Rental income increased 21.6% y/y to $26.1 million, net income attributable to common shareholders was $3.8 million or $0.11/share, and AFFO was $11.6 million or $0.33/share. Results were modestly ahead of consensus on both revenue and EPS, while occupancy remained 99.8%. More importantly, management noted that 1Q25 benefited from $0.02/share of holdover payments and prior-year property tax reimbursements, whereas 1Q26 included only $11,000 of holdover payments, indicating that the underlying earnings progression was better than the headline year-over-year comparison implies.
Operating Performance: A key takeaway was better lease visibility alongside a faster acquisition pace. The Company said all current-year rents have been agreed upon, 2027 expirations without renewal options are substantially agreed, all 2026/2027 leases will carry 3% escalators, the vast majority will have 10-year terms, 53% of the portfolio now has annual escalators, and 45% consists of 10-year leases based on executed and agreed-upon leases as of quarter-end; weighted average lease term is expected to exceed six years by year-end 2026 versus three years at IPO. PSTL also acquired 61 properties for $34.6 million in 1Q26 at an approximately 7.4% cash cap rate, adding roughly 195,000 square feet, and had already acquired or placed under definitive contract another $17 million in 2Q to date, indicating that improved cost of capital is translating into a more active external growth cadence without changing underwriting discipline.
Guidance & Liquidity: PSTL raised 2026 AFFO guidance by $0.01 to $1.40 $1.42, increased 2026 acquisition guidance by $15 million to $130-$140 million, and introduced a 2027 same-store cash revenue outlook of ~6.5%. On the call, management mentioned that roughly 25% of that 2027 growth should come from escalators, with the balance from mark-to-market, while also framing the medium-term growth algorithm around mark-to-market resets, annual escalators, retained cash flow, and day-1 accretive acquisitions. Liquidity also improved, with the revolver expanded to $250 million, $201 million undrawn at quarter-end, and $52.8 million of unsettled forward equity, which is expected to fund the acquisition plan on a leverage-neutral basis.
Valuation: We use a Dividend Discount Model, EV/EBITDA comp analysis, and P/AFFO comp analysis to guide our valuation. Our Dividend Discount uses a conservative range of payout ratios on 2027E AFFO to arrive at a valuation range of $24.15 to $32.20 with a mid-point of $28.17. Our P/AFFO analysis produces a valuation range of $22.64 to $24.15 with a mid-point of $23.39. Our EV/EBITDA valuation results in a range of $25.97 to $27.39 with a mid-point of $26.68. Taken together the average of our valuation ranges is $24.25 to $27.91 with a mid-point of $26.08.
About Stonegate
Stonegate Capital Partners is a leading capital markets advisory firm providing investor relations, equity research, and institutional investor outreach services for public companies. Our affiliate, Stonegate Capital Markets (member FINRA) provides a full spectrum of investment banking, equity research and capital raising for public and private companies.
SOURCE: Stonegate, Inc.
