Start at 10:00 A.M. Morning, everyone. Thank you for joining us. I'm Jeff Elliott with Three Part Advisors. Happy to have you guys all here for Postal Realty, our next presenting company. PSTL is the ticker. They're based just outside of New York. With us today from the company today, we have Andrew Spodek, who's the CEO. Rob Klein is CFO. And Jeremy Garber is President. The whole team here for you. Postal is actually a new Three Part Advisors IR client, so happy to set up follow-up meetings or calls with management as needed. Just reach out to me directly, and I can help you out with that. And with that, I'll just turn it over to Andrew.
Okay, good morning, everybody, and thank you for joining us. My name is Andrew Spodek. I'm the CEO of Postal Realty Trust. Some of you may know a little bit about us, but I think framing who I am and how we got here is part of the story. So just a little background. So I was born into postal real estate. Most people don't even know the Postal Service leases their assets. My father didn't at the time either. Started buying these assets in the early 1980s. He realized very early on what, as a company, we've proven out to be true, which are a lot of the misconceptions in postal. First of all, the Postal Service very rarely moves. We've maintained a 99% retention rate over the past 10+ years.
It's important to note during those 10 years, we've gone through pretty much every economic cycle: COVID, government shutdowns, and the single largest downsizing of the Postal Service network. But we've still been able to maintain that 99% retention rate. We collect 100% of our rent, 100% of the time. Again, government shutdowns, COVID, every economic cycle, we receive our rent. And number three is because of the preferential lease structure, we're able to own and operate these properties throughout the entire country. Currently, we're in 49 states: Hawaii and Alaska. For some reason, we haven't been able to buy something in Rhode Island. I can't explain why, but haven't found the right deal yet. Anyway, so my father continued to buy these in the early 2000s.
He semi-retired, and I took over, kind of institutionalized the business more by nature than by strategy, continued to grow the portfolio, and became the largest owner of postal assets. About seven years ago, a banker approached me about becoming a public company. Never thought about it. Didn't really have any investors. It was relatively low leverage, which is usually the reason why people go public. Spent about a year or so researching what the opportunity was. And let me just frame what postal real estate actually looks like. So you have about 32,000 postal facilities throughout the country. 25,000 of them are leased. The Postal Service pays approximately $1.4 billion in rent for those 25,000 facilities. Okay? Depending on whatever margin you want to put on it, excuse me, whatever cap rate you would like, that's got to be a $12 billion- $15+ billion-dollar market.
Those 25,000 facilities are owned by approximately 17,000 owners. Okay? It's a very fragmented market. The demographic of that seller is usually in their 60s-80s. They've owned their property between 40 and 50 years. Also, an interesting fact is that $1.4 billion that the Postal Service pays in rent is only 1.5% of their expenses. That's 1.5% of their expenses is to lease the backbone of their entire logistics business. It's a very powerful thought, right? So everybody talks about the closing of these postal facilities. It comes up in the news all the time. But the reality is, there's no real cost-benefit in closing these buildings. These buildings are part of the largest, most intricate logistics network in this country, if not in the world, right? The world is different today, right? Mail volume is gone, but package volume is the future.
Every online retailer, I don't care how large or small you are, utilizes and leverages the Postal Service network to get to the end customer. Think about that, right? Some of us live in major cities, but America is not that, right? The Postal Service touches 167 million delivery points six days a week. The most efficient way to get to the American people is by using the Postal Service, and everybody does it in one way or another. Every delivery service provider from FedEx, UPS, DHL, every online retailer from the larger Amazon of the world or Etsy or eBay, everybody does it. Amazon said to me directly, "Prime would not exist without the Postal Service," right? And those are the properties that we're buying. Anyway, we went public about five years ago. I seeded the public company with my personal assets.
This was not a monetization for me in any way, shape, or form. I took back everything I put in in stock and Operating Partnership units . I'm one of the largest shareholders of the company. We continued to grow the company. In the past five years, we've grown the company by six-plus times. That's rental revenue, property count, square footage. I should also note I don't take a cash salary. I take all my compensation in stock as well. I'm as aligned with shareholders as you can possibly find a CEO. And truthfully, we're probably half the size that we should be. And that's because during COVID, we got slowed down, and in the past two years, interest rates we got slowed down. We're buying these at a 7.5 capitalization rate or better. We've articulated for this year to be about $90 million.
Now, $90 million in REIT world is not a lot of money. But when you think about the fact that our enterprise value of our company is $700 million, which is relatively small, buying $90 million or $100 million actually has the ability to move the needle. And that's what we've been doing. We've been actively acquiring properties. We are out there every day, all day. We buy about 200-300 properties a year. Please. Okay, please.
Are you buying an existing post office that's out here in Hoboken, Texas? Are you buying one of these postal centers and a shopping center?
That's a great question.
I mean, I don't know. When you say you're buying, what does that mean?
It's a great question, and I'll try to answer it. We buy everything that we think the Postal Service needs to operate their buildings. So let me explain that a little further, okay? We break up the categories of postal facilities into three categories, right? We have the last-mile facilities, which would be Hoboken, Texas, okay, 2,500 sq ft and smaller. Flex facilities, which are 2,500 sq ft-50,000 sq ft. And then there's industrial buildings, which are 50,000 sq ft and larger. The bread and butter of our business is the last-mile and flex facility. Now, the size of the facility really is indicative of the demographic that they're serving, right? So larger populations will have larger facilities. In the end, this is a real estate business, right? We're the landlords, and the Postal Service is the tenant.
Arguably the best credit tenant you're going to find, but still, we're just a landlord, right? We go where the deal takes us, and that could be a really small town, or it could be an urban area, right? And the first thing that we try to find is what's most important to the Postal Service. Do they want to be in this building? Do they need to be in this building in order to serve the American people, in order to deliver those packages? Once we determine that, that's only when we start underwriting the real estate and seeing if we're buying it at the right price or if the underlying rent is correct. It's important to understand that in all the volume that we do, 75% of the deals we do are off-market.
Now, not off-market like it's going to a broker and he's giving us the ability to see it first. It's not touching a broker, right? When you've been in this business your whole life and you've been a resource to postal owners your entire life, you have a relationship. We do outbound calling. They call us. This is just the nature of the world that we're living in. You asked specifically about shopping centers.
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Right.
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Right. So it's a very interesting question because we don't get that very often. Most of our buildings are not that, and I'll explain why, right? The majority of the buildings that we have and that we buy and we look for were actually built to the postal specifications, which means that they chose a parcel, a piece of land that had good access to local roads and highways that were typically either on Main and Main in whatever town it is or right off Main and Main. And then they provided the owner with plans of the building that they want. And the building typically had retail, office, and warehouse. It has very good land-to-building ratio, parking for customers, employees, postal vehicles. Those inline retail properties that are out there, I don't believe are very good postal facilities. It was a test case within their rollout of the system.
Those buildings are mostly retail only. They don't have carriers or trucks coming out of it. And I don't believe they're as sticky as some of these other buildings that we buy. It's a good example of the type of asset that we actually don't look to acquire.
Okay. Thank you.
Please. Anyway, so we've grown the company. We've been actively acquiring and rolling up the space. We are the largest owner. We own 7% of the market. And just to give you context of what that means, the next 20 largest owners altogether only own about 11% of the market. So first of all, you have 80% of the market that's up for grabs that we're buying at arguably a very good capitalization rate. But what is also very misunderstood about us and underappreciated in a significant way is that we're not only buying these at a good cap rate and we're not only buying these accretively to our cost of capital when we're acquiring them, but we're also adding internal growth, right? So what does internal growth mean? So we're leveraging our platform for efficiencies, right?
Just by after we're buying them, taking it under our umbrella for management and operations, we're probably adding 25 to 50 basis points of accretion in efficiencies and cost of insurance and the way we operate the properties, and then we're marking these leases to market. Now, what you'll find in pretty much all of the answers that I'm going to give you about our facing off with the Postal Service is going to be different than every other owner out there, and what we've recently been able to achieve is an annual escalation in our leases. No other owner with a portfolio has been able to achieve that. We've gotten 3% escalations in our leases for 2022, 2023, 2024, and 2025 we're in the process of dealing with, and the leases we've executed to date account for about 21% of our portfolio, have annual escalations.
That by itself speaks to a tremendous amount of internal growth. That's after we've been able to mark these properties to market. Our balance sheet, we've kept very clean. We've always operated these properties very conservatively. We have very little, if any, floating rate exposure. We have pretty much our full credit facility available to us. We have $7 million drawn on a $150 million accordion and a $150 million accordion on top of that. And so we've really set ourselves up to be able to capitalize on the opportunities as they present themselves and grow our pipeline as our cost of capital goes down and as we see opportunities. We are, from my perspective, a very defensive play with the ability to have growth as well. Our dividend is also something that's important to some investors. We're currently trading somewhere in the 6.5%-7% dividend.
This is a covered dividend by our what I believe is a very secure, not just tenant, but retention rate and rent collections. I guess I'll open the floor up to any questions, and maybe if Robert, Jeremy want to help me, if anyone wants to direct questions to them or direct them to me.
Well, can I ask one more question?
Of course, please.
I want to go back to these. I don't know what to call them. I'm going to call them shopping center.
Please.
Postal place.
Okay.
Our UPS, I guess. Is the UPS Store where I take my Amazon packages back to send them back?
Yep.
They have their postal boxes in there.
Yeah.
Is that a part of y'all, or are they a competitor, or?
So I'll answer it this way. We are only interested in properties that have leases signed by the Postal Service, right? That is really what we're buying. And that's where your credit is, right? A lot of the buildings that you're talking about are individual franchises or business, and the credit tenant doesn't exist, right? That's an individual person operating a business. And so from our perspective, that is not something we're interested in buying.
Very good. Thank you.
Pleasure.
Can you talk about what happens when the Postal Service decides to vacate a location? Does that happen in your portfolio or elsewhere? Have you seen? How does that kind of play out?
Sure. So obviously, we're lucky enough not to have to deal with that very often when you have a 99% retention rate. But when that does happen, we've seen the property converted to all different types of things. Again, as I was stating, it's a very simple piece of real estate, and it has a lot of benefits, and it's able to be repositioned into a lot of different things. So we've seen it turn into banks, office buildings, medical spaces, hardware stores, community centers, right? It really depends on what the highest and best use in that particular town is. I've actually sold one of my properties where they built lofts on top of it because they needed housing, right? Depending on where you're buying it, it will really determine the type of tenancy that you have. We currently have two vacancies in the portfolio.
I think it accounts for something like 20 basis points of our total income, so it's really not a significant focus of our time, but it does happen.
Has this only occurred on lease expiration? Has there ever been a case where it happened during a lease? I do have to talk about a lease termination.
So usually it happens at expiration. Some of the leases that we buy, and when you buy a property from somebody, you typically inherit the lease that they were able to negotiate. So while we don't provide termination options in our leases, some owners do. I wouldn't suggest it to anybody because it's a one-sided option, but sometimes that happens. And sometimes there's a situation where they'll exercise that termination option. Yes, that does happen. Please, in the back.
I'm looking, but I'm just thinking as you drive through Texas, specifically all these small towns that may or may not even have as many people as the post office. And, I was asking you to consolidate that, but how do you—you're hiking around. How do you source new properties, or are those even the types you're looking at?
Okay. So there's a couple of questions in there. So first, it's hard to answer the question if we want those. I don't know what we're talking about specifically in terms of a property. In general, you'll find various places throughout the country that have a number of post offices in a small area, right? And everybody thinks that consolidation is the best thing to do. But when you play it out and you think about it as each one of these buildings is a node on a logistics chain, again, that's what we're investing in. We're investing in the infrastructure, okay? And we're investing in a distribution network. The rent for these 25,000 facilities is 1.5% of their expenses, right? But the largest expense that they have is labor, which is north of 70%.
And so if you take one of these buildings out of the network, but the neighboring facilities around it still need to service that area, you're increasing the labor on the neighboring facilities because they need to work harder to serve those areas. And as a result, there's no cost-benefit to removing the property from the network, if that makes sense. Now, that's the business side of it. There's a whole other side, which is that this is still a government agency. And there's a lot of political pressure when you try to close a post office. If they try to close a post office in Humble, Texas, the people from Humble, Texas, are going to argue, and they're going to call their local politician, and they're not going to want it closed. So you have both of these things kind of keeping the Postal Service in their building.
There's a constitutional right that the American people have for universal service to have the local post office. And they care about it, and they'll fight for it. And it's one of the reasons why the Postal Service very, very rarely moves. Sorry.
Do you see an opportunity with the government efficiency initiatives coming up for the government to want to monetize the ones that are still U.S.-owned?
I hope so. I don't know that that's going to happen. We've gotten a lot of questions since this whole DOGE initiative or noise that's out there. The Postal Service is kind of outside of what I think they're going to be focused on. I think they'll be focused on GSA, real government agencies. If they did focus on the Postal Service, the efficiencies that they would get would probably be in the labor area, which I don't know that anybody would want to tackle just because of the unions. And the Postal Service is the second largest employer in this country. I just don't know that they want to touch that. From a balance sheet standpoint, I couldn't agree with you more. The Postal Service should not own their real estate. They should do a sale-leaseback . I do think that there's a tremendous opportunity there.
I can't tell you that this will accelerate that or not, but I'm hopeful that it will because we are the natural buyer and operator and manager of that portfolio if that would be an opportunity. Sorry, please.
You mentioned that the Postal Service touches 167 million delivery points, a growing number, and also, I'm worried about online retailers maybe building out their own warehouses or their own logistics network. How does that outlook look?
Yes, that is a growing network. I want to say in the past few years, it's grown from 163 to 167. Just again, most of my numbers are just gut, but I think it's close to that. It's cost prohibitive for anybody to try to replicate this network. Amazon said that to me themselves. Again, they told me to my face, Prime would not exist without the Postal Service. And when I spoke to them about it, this is not an area that makes any sense for them to replicate. In more densely urban areas, they will, for redundancy purposes, more than anything else, roll out these Amazon drivers, which has been good and bad for them in different areas for different reasons. But the last mile is still a virtual monopoly that the Postal Service controls. Please.
I'll give you one more example if you don't mind.
Okay.
I live in the suburb of Dallas, South Garland.
Sure, I know Garland.
We have a South Garland postal distribution center about two and a half miles from my house, and it's a big one. I mean, there's a huge parking lot for their employees. Maybe five people at most sometimes work at the desk up there, and what I'd have to say, it's a two- to maybe three-acre building size.
Yeah, I believe the Postal Service owns that property. Yep.
Recently, would that be something that y'all would own, or is that directly owned by the government?
So most of those larger facilities are owned by the Postal Service. The Postal Service typically focuses their ownership on two areas, and these are just the majority of them. There are exceptions to it. One of them are the larger processing centers, like what you're referring to. And the other are the historic buildings that you'll see in towns that are not very efficient, but they're very pretty. And those are the two buildings that they typically own. The lady behind you.
Yeah, just expanding on the sourcing question, you're saying 75% of the older feed that's going to be made to market. I think just for the example of a last-mile facility, how are you actually finding that post office? Are they coming to you for it to be bought out, or how does that work out?
So it happens in both ways. Sometimes they call us because they know us. And sometimes we do outreach to people on a regular basis. We have mailers and callers that are reaching out to owners and getting in front of these owners regularly, and we've been doing it for years. We have a proprietary database that we control about the market and about what everybody is paying and what the rents are and what the use of the facilities are. And this is what helps us underwrite and buy these properties. Please.
Sorry. Could you explain that you use the term double net lease?
Yes.
And you're in sort of a three-year average term. Could you tell me why the term is fairly short?
Of course.
Also, what double net really entails?
Sure. Okay. Double net is a term that I guess we coined, and it means that the Postal Service is responsible for the day-to-day operations of the property, so that's the utilities, the janitorial, landscaping, snowplowing, et cetera, general maintenance of the facility. The owner's expenses are the majority of the time tied to the roof and structure of the property, as well as insurance, and the reason why three years has been our WALT, and it typically hovers around there because the typical Postal Service lease is five years, and so most people don't sell right after their lease is renewed or right when their lease is about to expire, and so it just usually averages out around there.
Since we've been able to get the Postal Service to agree to our annual escalations, we've also been able to get the Postal Service to agree to moving some of our leases to a 10-year term. We've been happy with our mark-to-markets. We've been happy with our escalations. But even though we've shown everybody we've had a 99% retention rate, there's still this perceived risk that we'll take out of the equation once we get to 10-year leases. So now we're somewhere between 6%-7% of the portfolio have 10-year leases, and that will be growing as we execute leases. Also, all with the 3% escalations. Yes, gentlemen in the back.
Postal Realty is unique to the REIT space.
Yes.
It's an add-on one, and I'm curious how you think about benchmarks to other REIT peers, and then related to your valuation, based off of that analysis, where do you think you should be traded?
Great question. So we are definitely a one-of-one. This was a thesis before we went public. Again, no one's ever done this before. This roll-up didn't exist. The asset class didn't exist. This has been an education from day one. We don't have any peers. We just don't. Everybody looks at us and compares us to different types of companies for different reasons. And so it's a hard question to answer. Maybe Rob can give you more color when I'm done answering the valuation question. So we're significantly undervalued for a lot of reasons, as I've been trying to explain, right? So our stock price today is, I don't know, somewhere between 8%-8.5% implied cap rate. Okay? We're buying at or above a 7.5% cap. So I would argue at minimum, we should be where we're buying these properties. Okay?
That's without adding any portfolio premium, any platform premium. That's before adding anything for internal growth. Okay? And that's before giving us any credit for the fact that maybe we're buying these better than they're actually worth, right? And so that last part, we've proven out in this past quarter by disposing of two properties. Okay? Bought those two properties for $3.6 million and sold them within a year or two of buying them for $6.1 million, right? Bought them between, let's call it a 7.5% and an 8% cap and sold them at a 4.9% cap, right? So we can, I'd love us valued at a 5%, but I would say somewhere between 6% and 7.5% should be conservatively reasonable, depending on how much growth you think we have and how quickly you think we're going to end up compounding that escalation, right?
We only have 21% of the portfolio, but that's growing, and so somewhere in that range, I think, is reasonable. Is that enough? You want Rob to add some more? Rob? Good? Okay.
Can you talk about the partnership units and how you use those and why that's a deal to sellers?
Sure. So I didn't know how much background everybody has on REITs in general, so I didn't really go there. But I think it's an important part. So it's part of the story, actually. So when I said that this was not a monetization for me, right? So I didn't take any money out when I contributed my properties to the public company. I was the seed portfolio. I was able to do that because when you're creating a REIT, you can build it as an entity called an UpREIT. And what the UpREIT does is it gives you a currency called an Operating Partnership unit , right? And so that's a very fancy way of just basically saying that I got an ownership in a partnership. That's it, right? So I put in a dollar, and that dollar gave me a certain percentage of the partnership.
But what's interesting about it is that you're able to do it without triggering a capital gains tax. So most people know what a 1031 exchange is. That's relatively common out there. It looks and feels similar to that, right? So my basis and my properties continue, but I get to take my, let's call it $1 million. I put it into the public company. They give me $1 million of these Operating Partnership unit s. I collect a distribution, which is very similar to the dividend. I'm diversified in a larger pool of properties. Okay? I have arguably a great management team operating my properties. And I don't have to do anything. And if the roof needs to be replaced, there's a big expense. I don't have to worry about that. If my building vacates for some reason, I don't have to worry about that.
I collect my income. I have an SEC-compliant company listed on the New York Stock Exchange. This, to me, was a big driver of the public company. Again, it was just a thesis, but I believe that there were a lot of owners out there that, because they've owned their properties for 40, 50 years, they had no or little depreciable basis. They were paying a lot of taxes. There were a lot of families that owned these properties together that didn't want to be partners anymore, and I thought it provided a lot of flexibility. When we went out on the road to kind of pitch our story, a lot of investors told us that REITs say they're going to use this currency, and no one really does. I felt like we were different, but I couldn't compare us to anybody. The reality is that we've used it.
We've used it a lot. We use it 10%-15% of the time. And a lot of the deals, a lot of the 75% of the deals that come in are interested in those Operating Partnership unit s, but we don't always utilize them because of where the stock is trading or because we'd rather use cash or debt because, again, the goal is to grow the company. But the partnership unit has been a big driver of the public company opportunity on why we created this platform. Thank you. I appreciate the question, John. Please.
How crucial is the role of Postmaster General in your operations? I mean, can they make dictates or statements that would change a lot of the framework of how you currently operate? Or is that more conventional?
So I guess it depends what those statements or changes are. For those of you that maybe didn't hear, he was asking how much of an impact the Postmaster General can have on our business. The reality is the Postmaster General doesn't care about us at all. Again, we're 1.5% of their expenses, right? So he's focused on a lot of other things. The former Postmaster General, who happens to be the chairman of our board, the independent chairman of our board, I've spoken to him about this a lot. In 10 or 15 years that he was in some version at the helm of the company, either as the Postmaster General, which is the CEO, or COO, he only dealt with one leased postal property. He only heard about it, it only rose to the occasion of that office. And it was the Port Authority-owned property in JFK Airport.
It was because he remembers every year the lease rolled, they tried to gouge him, right? Every other post office lease, again, doesn't rise to the occasion of them caring. With that being said, a lot of the initiatives that the Postmaster General speaks about can be, and I believe will be, very beneficial to us, right? And so, like the initiative of the Postal Service moving towards electric vehicles, right? Those electric vehicles are going to need to be charged at our properties. That will be an opportunity for us. Either the Postal Service will invest in updating the electrical infrastructure and installing charging stations, which will then make our properties more valuable, or they will come to us as the owner and ask us to install it, which will give us a profit center to be able to charge them to install them, right?
Those types of initiatives will have an impact on our properties. But in general, he's not focused on us. I'm sorry. Did I answer the question sufficiently?
No, I think so. Yeah. My thing is a little bit more directed as to if they can find a statement or edict change any of the operational structure as it pertains to these people.
No. But again, it should be noted that the Postmaster General, on multiple occasions, even as recently as the past couple of months, has stated how important he thinks these postal facilities are, how he is not interested in closing these facilities, and those kind of things. But no, there is no edict and anything like that. They're just run as a big bureaucratic organization. So in theory, if they wanted to change something about the lease structure, they would change it and roll it out through the organization. Yes, sir.
W hen you stopped creating a 5% + cap rate, at what point would buybacks make sense or end of their capacity or willingness to do?
Financially, it makes sense today, and it's made sense. If we were a multi-billion dollar company, from my perspective, I would have been buying stock back a while ago. But the goal is to grow the company. The goal is to get to a certain size and scale, to be added to the indices, to get to a size and scale where we grow out of our G&A because we have public company expenses that could be leveraged for efficiencies as we grow our company. Those expenses are not going to grow. And so just for our stage of life as a public company, it doesn't make a lot of sense. But theoretically, just the math makes sense that I.
This is great. If you look at the portfolio from a replacement cost or.
Great question.
Is there a thesis there? Are these truly worth more than?
100%. So we're buying these at or below replacement cost. We're paying on average $150 a foot or less. Anybody in any version of commercial real estate will know how inexpensive that is. To give you context of how inexpensive that $150 a foot is, the Postal Service, if I gave them this room as a vanilla box and told them to build out their space, they would spend $200 a foot just in build-out expenses, right? We're paying $150 for the land, the building, and the lease in its current form. What's also important to know for any of those real estate people in the room is that the Postal Service's leases are also unique in the fact that there's no leakage. So what does that mean, leakage, right?
So a lot of commercial leases, if the lease ends today and you're signing a new lease, you have to give them free rent. You have to do capital improvements or tenant improvement dollars or spend money on the property. You have to pay leasing commissions. We don't have to do anything like that. If the lease ends today, the new lease starts tomorrow. You collect your rent the whole time. There's no leakage. Everything flows down to the bottom line. Great questions, guys. Yeah, please.
Great questions. Thank you for doing a very good job laying this out. I guess I'm just still curious about the last answer. What happens if you don't narrow the gap? It's obviously you're cheap. You're trying to narrow the valuation gap. Maybe you want to put it evenly. But what is the ultimate end game? So what the hope is? You sell this to somebody, and at some point, let's say the gap doesn't narrow. What is that plan?
So what happens if the gap doesn't narrow in terms of my implied cap rate, meaning the stock price doesn't move? Is that what you're saying?
If you could just continue to sell at a persistent discount.
So the answer is I don't have to sell anything. I could just continue to operate and collect my rent and grow my rent and be totally happy doing that and distribute and recycle my capital and live life very easily. The reality is that that's not going to happen, right? At some point, it's hard not to recognize it, right? And it's interestingly enough why we're here, right? We've never been here before. We're new to this conference, right? We've built this company. And if you spend some time looking at everything about our company, from our balance sheet to our board to our governance to everything that we do, is built as a multi-billion-dollar company. And because that's where, at least from my perspective, my goal always was, right? I was never doing this.
I would never have turned my life upside down to do this and stay where we are, right? At some point, someone has to recognize what's going on. The problem is we've spent the past couple of years going to NAREIT and meeting with the REIT mafia, who are very nice and very interested and really understand our story and see the value we're doing, but they can't buy us. We're too small, and so we were just in front of the wrong investors. We had the wrong partners. Now, by the way, if you look at our investor roster, our large investors are typically not in companies our size. Our largest investor is Fidelity, right? The Fidelities of the world don't buy into a couple hundred million dollar market cap companies, and they've been in us for a couple of years, and they understand.
They see what we're doing. But most companies of that size or larger can't take positions in us. So once we get to $750 billion-$1 billion, all of those people will end up buying us and owning us. And that cycle that has been kind of hurting us to date will then end up helping us in a big way, right? That headwind will end up being a tailwind. And that's the goal here. Please.
Would you expand a little bit more? How did your dad get into this? Can you tell us how you got in?
Yeah.
What sparked your dad to see this opportunity?
So I guess there's two questions there. First of all, a doctor friend of his that was a neighbor in his community brought it to him. That wasn't a real estate person. That's how he got the first small portfolio of like three post offices. What really intrigued him about it was the fact that he didn't have to collect rent. My father owns all different types of real estate, and the rent collection was the biggest pain out of anything. You have to chase people to collect your rent. Here, I don't even invoice my tenant. I don't even send them a bill. I get my check before the end of the month, every month, without question. That was really what drove his interest in this. I'm sorry. I think there was a question over here.
Yeah. Are you only in this segment, or did you try some other things, I guess, in terms of buying other buildings or outside of this little niche?
The public company? No. No. No, so we are. I want to say it's 96%-98% postal leased. We have some buildings that have a secondary tenant in it, but it's not our focus, right? There is a logic to, at some point, veering outside of postal to a certain degree, but it will be based in postal, so what I mean by that is, like we just were in the process of buying a postal asset in Oregon, and the owner owns the neighboring Chase Bank, right, and so there's a logic to buying that Chase Bank also.
I happened to think it was overpriced, and so I didn't really want to go there, but there's a logic to buying a postal asset with a secondary tenant as long as we like the secondary tenant. Oh, I'm getting this signal, which I'm assuming means no more questions. Thank you, everybody. I appreciate the time.