Andrew Spodek is the Chief Executive Officer of Postal Realty Trust and is a member of the board of directors. Mr. Spodek is the Founder and CEO of the predecessor entity, Nationwide Postal Management, Inc. NPM, founded in 2004, was the largest manager of USPS-leased properties in the United States.
Mr. Spodek has over 20 years of experience exclusively focused on investing in and managing post office properties.
Prior to founding NPM, Mr. Spodek led acquisitions and property management for his family’s private real estate investment activities. Mr. Spodek sits on the board of directors of the Association of United States Postal Lessors.
Mr. Spodek earned a M.S. in real estate from New York University and a BBA in finance and international management from Boston University.
In this 2,643 word interview, exclusively in the Wall Street Transcript, Andrew Spodek explains how his company is building a portfolio of post office real estate.
“My father — who had been in the real estate industry for his entire career — had been brought an opportunity to purchase a portfolio of postal properties in the early 1980s. Before this, he didn’t know that the Postal Service even leased their buildings. After doing some diligence, he ended up purchasing them and loved the assets, and he continued to buy them from there on out.
In the early 2000s, my father semi-retired, and I created a management company to operate his portfolio, and I began to buy postal properties on my own.
What I didn’t realize at that time, but what I realize now in retrospect, is that we were one of the only institutional owners and operators of postal properties. As we continued to acquire, we established ourselves as the largest owner of postal properties.
A few years ago, we started exploring the idea of creating a REIT around our portfolio.”
Mr. Spodek has further developed his postal portfolio into a more attactive financial package:
“What I also realized was how fragmented the market was and that even though we may have been the largest owner of postal properties, we were very small relative to the market. If you think about postal real estate in general, you have roughly 23,000 postal properties throughout the country.
Those 23,000 postal properties represent about $1 billion in gross annual rent. Of the 23,000 postal properties, 16,000 are owned by single-asset owners. That’s 16,000 people owning 16,000 postal property assets — that’s how fragmented this market is.
As a result, we decided to pursue this public market opportunity and completed our IPO in May of 2019.”
The assets are very attractive from a real estate perspective:
“Number one is the Postal Service pays their rent during good times and bad, whether it is during a government shutdown or the current pandemic that we’re dealing with.
Number two is the Postal Service very rarely moves.
Over the past 11 years, we’ve maintained a 98% retention rate. The Postal Service, in general, is very committed to the towns and communities that they’re based in. They have significant capital invested in the buildings they occupy, and they have very strong ties to their local communities. Additionally, these postal properties are part of a distribution network; removing one of the stops on the network is disruptive to the overall network in general. For all of those reasons and more, the Postal Service very rarely moves.
The third important consideration is that we’re able to operate hundreds of these buildings all over the country from our office on Long Island without the need to have any employees on-site at the properties.”
The value of the USPS is the value of the properties:
“It seems logical that the Postal Service that sees millions of Americans every day would be the most effective way of getting these packages to the American people. I believe the Postal Service’s last-mile distribution network is their competitive advantage in the package delivery industry.
It’s important to also understand that the Postal Service is a government agency and is the second-largest employer in the country. The Postal Service provides a critical need to the communities and American people that it serves.
In a situation like we are all living in today — with shelter-in-place due to COVID-19 — the value and need of the Postal Service is more relevant and important than it ever was.
The people that live throughout this country that need to collect their Social Security checks, medicine or any other resources look to the Postal Service. The Postal Service is there to provide uninterrupted delivery. And if the Postal Service were a private company, the chances of them being there and operating reliably at this size and scale and at this pace during a time like this is highly unlikely.”
Mr. Spodek emphasizes the quality of the management for the Postal Realty Trust:
“So first and foremost, I think it’s important that everybody understands that we’re internally managed by a team that’s been in this space for decades. We have very deep and long-lasting experience owning and operating and dealing with this particular tenant. I think that that’s key to everything.
It translates into the management and operation. It translates into acquisitions. It translates into the relationships that we have all over the country. Those relationships are with vendors and owners and intermediaries and brokers and the Postal Service.
It’s important to recognize when you’re investing in a company like ours, it’s not just about the tenant and their credit but also to understand that being diversified geographically is an advantage as well.
We currently own 549 properties in 45 states. Having that type of geographical diversification is very beneficial. Understanding that these postal properties are well-located in the towns they operate in is also important.”
Get the entire picture of the Postal Realty Trust by reading the complete 2,643 word interview with Andrew Spodek, exclusively in the Wall Street Transcript.
PSB Holdings CEO Scott Cattanach Explains the Benefits of Banking in North-Central Wisconsin
February 20, 2019
Larry Mendelson, Chairman and CEO of the HEICO Corporation (NYSE:HEI), Explains Value Creation
December 17, 2020
Paul Pittman, CEO of Farmland Partners [NYSE: FPI], Explains How to Get a 10+% Yield by Feeding the Planet
May 24, 2022
Santa Lucia CIO and Portfolio Manager Explains Indonesian Elections and Chinese Cement for Investors
January 31, 2019
