Happy belated birthday to the United States Postal Service… 250 years and still going strong.

As most schoolkids know, Ben Franklin was appointed the nation’s first Postmaster General in 1775. Even then, a courier could deliver correspondence from New York to Philadelphia and return with a reply in less than 24 hours. Still, I wonder what old Ben would think about today’s vast operation.

The USPS employs 640,000 workers and operates a fleet of 250,000 vehicles. Even in tiny towns without a single traffic light, there’s a post office somewhere nearby. Incredibly, these facilities serve nearly 170 million unique delivery points.

Mail carriers deliver 128 billion letters and packages annually — about 350 million per day. And as we all know, first-class postage rates are continually climbing. The USPS generated $78 billion in operating revenues last year. If this were a private enterprise, that would be good enough to put the USPS at 43rd on the Fortune 500 list.

The Postal Service is also the federal government’s most respected agency, garnering 91% favorability ratings from both Democrats and Republicans.

Unfortunately, this venerable institution (which receives no government monies or appropriations) hasn’t turned a net profit since 2006. Meanwhile, underfunded employee health and pension obligations have also been a thorny problem. The Postal Service Reform Act of 2022 brought some relief, but legislation can’t alter the fundamental shifts in the way Americans communicate and stay informed.

Things that used to arrive in physical mailboxes (such as birthday cards and wedding shower invitations) are now frequently delivered electronically. Since handling 200+ billion pieces of mail in 2000, post office “throughput” delivery volume has declined by 30%.

On the bright side, the USPS competes effectively with UPS (NYSE: USPS) and FedEx (NYSE: FDX) for package shipping services — which have grown explosively thanks to e-commerce. Over the past decade, the number of packages delivered annually by the USPS has doubled from 4 billion to nearly 8 billion.

Even mighty Amazon (NSDQ: AMZN) piggybacks on this network and often relies on the good old post office to cover small rural towns unreached by its massive fulfillment centers. With rates determined by the free market rather than regulators, this segment accounts for just 6% of USPS mail volume, but more than 30% of its income.

This far-flung empire requires many outposts – about 34,000 nationally. And most of them are leased. Keep in mind, the USPS has the implicit support of the federal government and is technically considered an independent agency of the executive branch.

Truly, there are few better tenants.

That’s exactly why I like Postal Realty (NYSE: PSTL). On the surface, it looks like any other real estate investment trust (REIT), with a growing collection of properties that generate a nice pile of tax-advantaged rental income. But whereas most REITs own apartments or office parks or retail strip centers, this one only leases post offices.

Since its IPO in 2019, the portfolio has quintupled in size. Postal Realty currently owns 1,800 properties stretching from Alaska to Hawaii… and all points in between. These structures range from small last-mile retail outlets that sell stamps to massive 100,000-plus-square-foot industrial warehouses that act as processing hubs and distribution centers.

In total, PSTL owns 5.7 million square feet of space, most of which is leased at around $12 per square foot. Just as you can count on the USPS for on-time mail delivery, this quasi-government entity (the only agency specifically mentioned in the U.S. Constitution) always pays its rent on time.

The company’s annualized base rental income has swelled to $50+ million. And while many of its peers have vacant buildings with for-rent signs out front, that isn’t an issue here. Lease retention rates were a perfect 100% last year, with overall occupancy at 99.8%.

As the business grows, general and administrative (G&A) overhead expenses have gotten smaller as a percentage of revenue. In other words, margins have scaled and the business is becoming more profitable. Adjusted funds from operations (AFFO) have doubled over the past five years and are on track to reach $40 million ($1.32 per share) in 2025.

That deep pool of cash supports a sizeable annualized dividend distribution of $0.97 per share – which puts the yield north of 6%.

Despite headwinds facing the Postal Service, new households are being formed every day — about 2 million per year at the current pace. Just about every one of them will need either a P.O. box or a traditional mailbox, adding to the existing 168 million delivery points.

Looking ahead, PSTL controls just a tiny 6% (1,800 of 30,000+) sliver of this fragmented $15 billion property market. And it continues to consolidate through disciplined acquisition – purchasing another 47 USPS properties last quarter alone.