The Company's IPO and Formation Transactions

6 Months Ended

Jun. 30, 2020

The Company's Initial Public Offering and Formation Transactions [Abstract]

The Company's IPO and Formation Transactions

Note 2. The Company’s IPO and Formation Transactions

Both the Company and the Operating Partnership commenced operations upon completion of the IPO and the Formation Transactions on May 17, 2019. The Company’s operations are carried out primarily through the Operating Partnership and the wholly owned subsidiaries of the Operating Partnership.

On May 17, 2019, the Company completed its IPO, pursuant to which it sold 4,500,000 shares of its Class A common stock at a public offering price of $17.00 per share. The Company raised $76.5 million in gross proceeds, resulting in net proceeds of approximately $71.1 million after deducting approximately $5.4 million in underwriting discounts and before giving effect to $6.4 million in other expenses relating to the IPO. The Company’s Class A common stock began trading on the New York Stock Exchange under the symbol “PSTL” on May 15, 2019.

In connection with the IPO and Formation Transactions, the Company, through its Operating Partnership, used a portion of the net proceeds to repay approximately $31.7 million of outstanding indebtedness related to the Predecessor.

Pursuant to the Formation Transactions, the Company, directly or through the Operating Partnership, acquired the entities that comprise the Predecessor. The initial properties and other interests were contributed in exchange for 1,333,112 OP Units, 637,058 shares of Class A common stock, 27,206 shares of Voting Equivalency stock and $1.9 million of cash. In addition, the Operating Partnership purchased 81 post office properties (the “Acquisition Properties”) in exchange for $26.9 million in cash, including approximately $1.0 million paid to Mr. Spodek, the Company’s chief executive officer and a director for his non-controlling ownership in nine of the Acquisition Properties.

The Company’s results of operations for the three and six months ended June 30, 2019 reflect the results of operations of the Predecessor together with the Company, while the financial condition as of December 31, 2019 and June 30, 2020 reflects solely the Company. References in these notes to consolidated financial statements to “Postal Realty Trust, Inc.” signify the Company for the period after the completion of the IPO and the Formation Transactions and the Predecessor for all prior periods.

The following is a summary of the Predecessor Statement of Operations for the period from April 1, 2019 through May 16, 2019 and for the period from January 1, 2019 through May 16, 2019, and the Company’s Statement of Operations for the period from May 17, 2019 through June 30, 2019. These amounts are included in the consolidated and combined consolidated statement of operations herein for the three and six months ended June 30, 2019.

	Predecessor						Postal Realty Trust, Inc.
	April 1,			January 1,			May 17,
	2019			2019			2019
	through			through			through
	May 16,			May 16,			June 30,
	2019			2019			2019
Revenues:
Rental income	$	756,969		$	2,249,355		$	1,099,459
Tenant reimbursements		111,219			348,075			162,010
Fee and other income		141,033			427,959			135,292
Total revenues		1,009,221			3,025,389			1,396,761
Operating Expenses:
Real estate taxes		117,723			367,512			171,048
Property operating expenses		115,010			366,716			133,576
General and administrative		106,557			483,448			861,475
Depreciation and amortization		245,313			725,756			522,459
Total operating expenses		584,603			1,943,432			1,688,558
Income (loss) from operations		424,618			1,081,957			(291,797	)
Interest expense, net:
Contractual interest expense		(212,352	)		(570,819	)		(15,688	)
Amortization of deferred financing costs		(1,592	)		(4,773	)		(262	)
Loss on early extinguishment of Predecessor debt		-			-			(185,586	)
Interest income		-			1,134			1,124
Total interest expense, net		(213,944	)		(574,458	)		(200,412	)
Income (loss) before income tax expense		210,674			507,499			(492,209	)
Income tax expense		-			(39,749	)		(6,259	)
Net income (loss)		210,674			467,750			(498,468	)
Less:
Net income attributable to noncontrolling interest in properties		(1,493	)		(4,336	)		-
Net income attributable to Predecessor	$	209,181		$	463,414			-
Net loss attributable to Operating Partnership unitholders’ noncontrolling interests								106,672
Net loss attributable to common stockholders							$	(391,796	)