KBRA assigns its BBB issuer rating to Postal Realty LP (NYSE:PSTL). The Outlook is Stable.

PSTL is an equity REIT focused on the acquisition, ownership, and management of properties leased to the United States Postal Service (USPS). All the company's operations are conducted through a subsidiary, Postal Realty LP, which is 79% owned by the public REIT.

Founded in 2004 and public since 2019, Postal Realty Trust, Inc. is a REIT focused on USPS-leased properties. USPS operates from more than 31,000 locations, with approximately 23,000 facilities leased from third parties. Postal is the largest single owner of USPS properties, with 1,917 owned properties (about 8% of all leased facilities).

Key Credit Considerations

The issuer rating reflects Postal's consistent cash flow generation from a highly diversified portfolio of USPS-leased properties, a long-standing record of nearly 100% lease renewal and portfolio occupancy, predictable operating margins and recurring capex needs, and moderate leverage. Financial flexibility is supported by the 2025 renewal and extension of the company's bank credit facilities, which enhances liquidity and provides capacity to support ongoing acquisition activity within management's targeted leverage parameters. At year-end 2025, Postal owned 1,917 properties across 49 states, with limited single-asset concentration, and continued to benefit from stable margins and cash flow visibility. Although weighted average lease term remains relatively short, Postal's historical renewal rates and management's continued shift toward longer-term leases with contractual annual rent increases supports internal growth and improved revenue durability over time.

The rating is primarily constrained by Postal's single-tenant exposure to USPS and the resulting sensitivity to changes in USPS operating strategy, including potential consolidation, network optimization, or facility closures that could increase vacancy risk and create uncertainty around downtime and secondary market values for certain assets. While USPS historically has renewed leases at very high rates, credit outcomes remain tied to USPS's operations and structure remaining unchanged. The company's growth strategy also relies on access to debt and equity capital to fund acquisitions in a fragmented market; less favorable capital market conditions could reduce acquisition volume, pressure external growth, and increase reliance on secured or bank financing. These constraints are partially mitigated by portfolio diversification, generally mission-critical location profiles, and management's demonstrated ability to source acquisitions and maintain occupancy through multiple operating cycles.

Outlook

The Stable Outlook reflects KBRA's expectation that Postal will continue to pursue a leverage-neutral expansion strategy while maintaining high occupancy and lease renewal rates.

Rating Sensitivities

Positive rating momentum could emerge if Postal demonstrates sustained improvement in scale and operating performance, including continued movement toward longer lease terms and stronger contractual rent growth, stable-to-improving margins, and a sustained reduction in leverage, alongside consistent access to diversified, primarily unsecured funding.

Negative rating pressure could develop if USPS undertakes more significant downsizing or consolidation actions that lead to higher vacancy and weaker asset values, or if Postal's credit metrics weaken materially—such as leverage rising meaningfully above current levels or fixed-charge coverage declining—particularly if driven by asset value declines due to lost tenancy, more aggressive financial policy, heavier reliance on bank credit, or borrowing to fund recurring capital needs.

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Methodologies

Disclosures

A description of all substantially material sources that were used to prepare the credit rating and information on the methodology(ies) (inclusive of any material models and sensitivity analyses of the relevant key rating assumptions, as applicable) used in determining the credit rating is available in the Information Disclosure Form(s) located here.

Information on the meaning of each rating category can be located here.

Further disclosures relating to this rating action are available in the Information Disclosure Form(s) referenced above. Additional information regarding KBRA policies, methodologies, rating scales and disclosures are available at www.kbra.com.

About KBRA

Kroll Bond Rating Agency, LLC (KBRA), one of the major credit rating agencies (CRA), is a full-service CRA registered with the U.S. Securities and Exchange Commission as an NRSRO. Kroll Bond Rating Agency Europe Limited is registered as a CRA with the European Securities and Markets Authority. Kroll Bond Rating Agency UK Limited is registered as a CRA with the UK Financial Conduct Authority. In addition, KBRA is designated as a Designated Rating Organization (DRO) by the Ontario Securities Commission for issuers of asset-backed securities to file a short form prospectus or shelf prospectus. KBRA is also recognized as a Qualified Rating Agency by Taiwan's Financial Supervisory Commission and is recognized by the National Association of Insurance Commissioners as a Credit Rating Provider (CRP) in the U.S.

Doc ID: 1013685

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Analytical Contacts

Scott O'Shea, Senior Director (Lead Analyst)

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scott.oshea@kbra.com

Alexander Mansour, Associate

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Andrew Giudici, Global Head of Corporate, Project, and Infrastructure Finance (Rating Committee Chair)

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KBRA Assigns BBB Issuer Rating to Postal Realty LP