Item 2.02 Results of Operations and Financial Condition.
Postal Realty Trust, Inc. (the "Company") issued a press release on January 4,
2021 that provided an update on the Company's property portfolio and operations
for the fourth quarter and year ended December 31, 2020. A copy of the press
release is attached hereto as Exhibit 99.1 and incorporated herein by reference.
The information in this Item 2.02 and Exhibit 99.1 shall not be deemed "filed"
for purposes of Section 18 of the Securities Exchange Act of 1934, as amended
(the "Exchange Act") or otherwise subject to the liabilities of that section and
shall not be deemed incorporated by reference in any filing made by the Company
under the Securities Act of 1933, as amended (the "Securities Act") or the
Exchange Act except as set forth by specific reference in such filing.
Item 5.02 Departure of Directors or Certain Officers; Election of Directors;
Appointment of Certain Officers; Compensatory Arrangements of Certain
Officers
On December 30, 2020, the Board of Directors (the "Board") of the Company
appointed Robert B. Klein to serve as the Chief Financial Officer of the
Company, effective January 1, 2021.
Mr. Klein, age 45, previously served as a Managing Partner and head of capital
markets at Monday Properties Services, LLC ("Monday Properties") since June
2016, where he led the strategic growth of the firm. From 1998 to the time he
joined Monday Properties, Mr. Klein served in various roles, including most
recently as a Managing Director, in the Real Estate Advisory Group at Evercore
Group L.L.C. ("Evercore") and advised public and private companies and special
committees on mergers and acquisitions, joint ventures, strategic partnerships,
portfolio acquisitions and sales, restructuring transactions, IPOs and strategic
alternatives. Prior to joining Evercore, Mr. Klein held positions with MJC
Associates LLC, Reckson Associates, Goldman, Sachs & Co and Bankers Trust.
Mr. Klein is an active member of Urban Land Institute (ULI), University of
Florida's Bergstrom Center Advisory Board and the Columbia Business School Real
Estate Circle. He graduated from the University of Florida Honors Program in
1997, with a Bachelor of Science in Business Administration and received his
M.B.A. from Columbia Business School in 2004.
In connection with his appointment as the Chief Financial Officer of the
Company, Mr. Klein and the Company have entered into an employment agreement,
which will govern the terms and conditions of Mr. Klein's employment with the
Company (the "Employment Agreement"). Pursuant to the terms of the Employment
Agreement, Mr. Klein will receive an annual base salary of $275,000 and will be
eligible to receive an annual incentive bonus with a target bonus of 110% of the
annual base salary, with the actual amount of such bonus to be determined by the
Compensation Committee of the Board (the "Compensation Committee"), using such
performance measures as the Compensation Committee deems to be appropriate. The
initial term of the Employment Agreement is two years commencing on January 1,
2021 and up to two additional automatic extensions of twelve months each after
the end of the initial term. Mr. Klein is expected to be eligible to receive
long-term incentive awards under the Company's Equity Incentive Plan, as
determined by the Compensation Committee from time to time, with a target grant
of 115% of his annual base salary. In addition, Mr. Klein will be entitled to
participate in the Company's employee stock purchase plan and will also be
eligible to participate in the Company's health insurance, 401k, life insurance
and disability coverage. Lastly, Mr. Klein is eligible to participate in the
Company's Alignment of Interest Program, where eligible participants may elect
to receive LTIP units or restricted shares of Class A common stock, or a mix of
both, in lieu of up to 100% of any compensation otherwise payable in cash.
In the event Mr. Klein's employment is terminated by the Company without
"Cause," by him for "Good Reason" (as such terms are defined in the Employment
Agreement) or due to Mr. Klein's death or Disability (as such term is defined in
the Employment Agreement), he will receive: his accrued base salary; accrued but
unpaid time off; any earned but unpaid bonuses; vested benefits due under the
terms of any deferred compensation incentive or other benefit plans maintained
by the Company; reimbursement of any expenses; and accelerated vesting of
unvested equity awards that were granted to Mr. Klein pursuant to, and in
exchange for his participation under, the Company's Alignment of Interest
Program. In addition to the foregoing, in the event Mr. Klein's employment is
terminated by the Company without "Cause" any time after the audit of the
Company's financial statements for fiscal year end December 31, 2021 is
completed or by Mr. Klein for "Good Reason" any time after the renewal of the
initial term of the Employment Agreement, then Mr. Klein will receive:
accelerated vesting of time-based equity awards; a lump sum payment equal to his
base salary for a period of six months after the date of termination plus 50% of
Mr. Klein's target bonus opportunity for the year in which his employment is
terminated; and a lump sum amount equal to six months of the monthly premium
payment for Mr. Klein's health, dental and vision insurance.
There are no arrangements or understandings between Mr. Klein and any other
person pursuant to which he was appointed to serve as Chief Financial Officer of
the Company. The Company is not aware of any transactions or existing
relationships in which Mr. Klein has a direct or indirect material interest that
would require disclosure pursuant to Item 404(a) of Regulation S-K other than as
set forth herein, and is not aware of any family relationship between Mr. Klein
and the Company's executive officers, directors or any person nominated to
become a director or executive officer of the Company that would require
disclosure under Item 401(d) of Regulation S-K. Except as disclosed above, no
other material plan, contract, or arrangement was entered into or materially
amended by the Company in connection with Mr. Klein's appointment, and there was
no grant or award made by the Company to Mr. Klein or modification thereto under
any such plan, contract, or arrangement in connection with his appointment.
A copy of the Employment Agreement is attached hereto as Exhibit 10.1 and
incorporated herein by reference.
1
Item 7.01 Regulation FD Disclosure.
The Company issued a press release on January 4, 2021 announcing the appointment
of Mr. Klein as the Chief Financial Officer of the Company.
The information in this Item 7.01 shall not be deemed "filed" for purposes of
Section 18 of the Exchange Act or otherwise subject to the liabilities of that
section and shall not be deemed incorporated by reference in any filing made by
the Company under the Securities Act or the Exchange Act, except as set forth by
specific reference in such filing.
Item 8.01 Other Events.
On January 4, 2021, the Company provided an update on its property portfolio for
the fourth quarter and year ended December 31, 2020:
Collections and Acquisitions
For the three months ended December 31, 2020, the Company collected 100% of its
rents and completed the acquisition of 36 properties for approximately $62.6
million, excluding closing costs. These acquisitions comprised approximately
577,105 net leasable interior square feet and have a weighted average rental
rate of $8.23 per leasable square foot based on rents in place as of December
31, 2020.
For the year ended December 31, 2020, the Company acquired 261 properties for
approximately $130.3 million, excluding closing costs. These acquisitions
comprised approximately 1.2 million net leasable interior square feet and have a
weighted average rental rate of $9.21 per leasable square foot based on rents in
place as of December 31, 2020.
As of December 31, 2020, the Company's portfolio is 100% occupied and is
comprised of 726 properties across 47 states with approximately 2.7 million net
leasable interior square feet. The weighted average rental rate for the
portfolio is $9.67 per leasable square foot.
In addition, the Company has entered into definitive agreements to acquire 13
postal properties for approximately $18.5 million, excluding closing costs. The
majority of these transactions are anticipated to close by the end of the first
quarter of 2021, subject to the satisfaction of customary closing conditions.
Holdover Leases and 2020 Lease Expirations
As of January 4, 2021, the Company owns 90 properties with leases that expired
in 2019 and 2020. The Company has agreed with the United States Postal Service
("USPS") upon rents on all properties. Of the 90 properties, 72 properties have
new leases that have been fully executed by both the Company and the USPS and
leases for the remaining 16 properties have been signed by the Company and
returned to the USPS for execution. Leases for the remaining two properties,
which were acquired in the fourth quarter of 2020, are awaiting draft leases
from the USPS.
Item 9.01 Financial Statements and Exhibits.
(d) Exhibits
Exhibit
Number Description
10.1 Employment Agreement, dated December 30, 2020, by and between the
Company and Robert B. Klein
99.1 Press Release, dated January 4, 2021
2
Cautionary Note Regarding Forward-Looking Statements
Certain matters within this Current Report on Form 8-K, including with respect
to the disclosures set forth under Items 2.02 and 8.01 herein, are discussed
using forward-looking language as specified in the Private Securities Litigation
Reform Act of 1995, and, as such, may involve known and unknown risks,
uncertainties and other factors that may cause the actual results or performance
to differ from those projected in the forward-looking statements.
Forward-looking statements include statements regarding the proposed public
offering and other statements identified by words such as "could," "may,"
"might," "will," "likely," "anticipates," "intends," "plans," "seeks,"
"believes," "estimates," "expects," "continues," "projects" and similar
references to future periods, or by the inclusion of forecasts or projections.
Forward-looking statements, including, among others, statements regarding the
Company's acquisition strategy or future acquisition activity, including
weighted average rental rates and cap rates, which are based on the Company's
current expectations and assumptions regarding capital market conditions, its
acquisition pipeline, the Company's business, the economy and other future
conditions. Because forward-looking statements relate to the future, by their
nature, they are subject to inherent uncertainties, risks and changes in
circumstances that are difficult to predict. As a result, the Company's actual
results may differ materially from those contemplated by the forward-looking
statements. Important factors that could cause actual results to differ
materially from those in the forward-looking statements include the USPS's
terminations or non-renewals of leases, changes in demand for postal services
delivered by the USPS, the solvency and financial health of the USPS and the
Company's other tenants, competitive, financial market and regulatory
conditions, disruption in market, economic and financial conditions as a result
of the ongoing COVID-19 pandemic, general real estate market conditions, the
Company's competitive environment and other factors set forth under "Risk
Factors" in the Company's filings with the United States Securities and Exchange
Commission. Any forward-looking statement made in this Current Report on Form
8-K speaks only as of the date on which it is made. The Company undertakes no
obligation to publicly update or revise any forward-looking statement, whether
as a result of new information, future developments or otherwise.
3© Edgar Online, source Glimpses
POSTAL REALTY TRUST, INC. 
