Postal Realty (PSTL) Q4 2025 Earnings Transcript

PSTL’s setup is less about headline growth and more about financing optionality compounding into a lower-risk self-funding model. The important shift is not just the lower leverage target; it’s that management now believes it can keep growth accretive while relying less on emergency-style capital raising. That matters because REITs with sticky, government-linked cash flows usually rerate when the market stops assigning a refinancing discount and starts valuing duration.

The second-order beneficiary is not only PSTL equity holders but also its acquisition pipeline: a better cost of capital expands the universe of smaller, less efficient portfolios that were previously uneconomic. The market may be underestimating how quickly the 10-year lease / escalator structure can turn a modest cap-rate spread into a durable internal IRR engine, especially once scale lowers G&A as a percent of revenue. If management keeps executing, same-store growth plus external growth should keep AFFO compounding even if acquisition volumes stay merely at guidance.

The biggest risk is that the current narrative assumes a clean pass-through from improved financing conditions into deal flow and rerating. That can break if cap rates compress faster than funding costs, if the forward equity overhang becomes a psychological ceiling on the stock, or if USPS lease negotiations become more contentious than management implies. The 2027 renewal block is the real medium-term watch item: today’s confidence is high, but any slippage there would hit the market’s core assumption that rent roll can be extended without friction.

Contrarian read: the market may be focusing too much on the USPS auction headlines and not enough on the scarcity value of PSTL’s balance sheet. If the competitive bidding process expands last-mile access, it could increase the strategic importance of existing delivery-unit infrastructure rather than dilute it, because new entrants still need physical nodes near demand. That creates a subtle but meaningful bull case: more competition in the last mile can increase, not reduce, the value of compliant, already-networked real estate.