But look out for the bureaucracy
The U.S. Postal Service occupies about 26,000 properties in the United States. One such property is an industrial building operated by Brit Properties, the landlord for the Post Office’s Wicker Park Annex at 1419 W. Carroll Avenue in Chicago.
The facility’s name is a bit of a misnomer. Their 19,000 square foot space is not located in Wicker Park at all. However, it was the closest acceptable location to Post Office management near Wicker Park that was available for lease back in 2009. The neighborhood is actually called the Union Triangle, with proximity to Union Park, bordered by Ogden Avenue on the east and Ashland Avenue on the west, and only one block west of the booming Fulton Market District.
Soon after the onset of the Great Recession, the Postal Service was searching for a location that could provide an expansive vehicle parking lot, loading docks, and a warehouse large enough to accommodate over 100 employees. The facility was needed for sorting and distributing regular letters and packages for delivery and customer pick up. The property needed to be as close to Wicker Park as possible. Eric Schneider of Brit Properties says, “The Postal Service found our building and has remained as a tenant for over 10 years.”
The U.S. Postal Service is an unusual tenant in a number of ways, both positive and negative. The good part is that American lawmakers have been supporting the Postal Service’s operations through funding approved by the United States Congress.
Schneider says “That’s as close as most landlord’s can get to a credit tenant. They never run out of deliveries.”
On the negative side, the Postal Service will only sign their own form of lease agreement. That lease is an extremely “tenant-sided” document. This is the exact opposite practice of landlords with non-governmental agency tenants. Furthermore, the bureaucracy can be challenging. Schneider chuckles, “collection of their rent and other expenses seems to sometimes get lost in the mail.” There have been many months within the past 10 years that the tenant owed the landlord back payments. Certain internal departments do not communicate with each each other very well. Collections are not always easy but payments always arrive eventually.
It seems logical that most of Brit Properties’ investors feel a sense of security based on the fact that the U.S. Postal Service is their tenant. Despite occasional collection issues, the property generates consistent cash flow. In these pandemic times that is something comforting. However, there are additional issues with an in-city location where parking is at a premium. Each morning there are dozens of Postal Service trucks and vans lined up in the street blocking neighborhood traffic. This is common where population density requires more letter carriers than a typical suburban location.