10 Things the Postal Service Won't Tell You Part 3
Welcome to another day in my life. Today is Saturday and I hope you had a safe and great week. It is another busy weekend for Dab the AIDS Bear and me.
For the past two days, I have been writing about things the United States Post Office does not want you to know. If you have not read the last two blogs, you should start on the blog for August 30, 2012 and read forward to this one.
7. We're sitting on a national treasure...
In the 2004 movie "National Treasure," a map on the back of the Declaration of Independence leads readers to riches buried beneath Manhattan's Trinity Church. And just like that church, one of the biggest landowners in New York City, the Postal Service is sitting on a valuable real estate portfolio in its edifices across the country, many of which are in prime downtown locations.
In light of its recent financial problems, the Postal Service has begun eyeing its facilities as a means of generating cash through leverage or property sales. The total value of its properties has never been officially appraised, but a 2011 report on the leveraging opportunity by the Postal Service Office of Inspector General estimated their value at well over $27 billion. (One post office on upscale summer-vacation destination Martha's Vineyard, for example, has an assessed value of more than $3 million, nearly twice its purchase price.)
Last year, the Postal Service hired real estate firm CB Richard Ellis Group to advise it on putting postal real estate on the market and to represent the USPS in those sales. The available buildings and land parcels are listed on USPSPropertiesForSale.com, with sticker prices as high as $17 million (some large buildings, such as a 17-story, 700,000-square-foot facility, do not list asking prices). A USPS spokesman said it has raised $120 million since the beginning of October through the sale of 30 properties, and currently has nearly 100 more, worth a total of about $252 million that it plans to sell in the next year and a half.
8. ...And we'll sell you a piece of it.
It may sound crazy to invest in an organization that loses millions of dollars an hour, but some intrepid investors say they've made millions off the Postal Service -- by becoming its landlords. Currently 75% of post offices, or more than 26,000 properties, are privately owned, and the Postal Service pays rent to people like Marvin Bakalar, a Rhinebeck, N.Y., resident who has been buying, selling and brokering post office properties (from the USPS and private owners) for more than three decades. The $20,000 or $40,000 the Postal Service often pays in annual rental fees amounts to government-backed returns exceeding 10 percent, according to Bakalar, who says he's made millions of dollars in the post office business. "Owning post offices was probably, in my opinion, one of the safest, most secure and best investments anyone could have," says the 68-year-old Bakalar, adding that post office owners are often average investors who own just one postal property.
But the market suddenly changed last year when the Postal Service announced it was evaluating more than 3,600 post offices for potential closure, scaring off buyers; past post office shutterings have left some investors like Bakalar in the lurch when the Postal Service moved out and stopped paying rent. New post office leases often have termination clauses allowing the USPS to vacate on short notice. "That's increased the risk tremendously," Bakalar says. A few days ago, he looked into buying an Alabama post office, but after calling the postmaster, learned that she was quitting after her hours were reduced -- a warning sign not to invest, he says. But he's still made money in what he calls a buyer's market for post offices, getting higher returns of up to 15%. He advises potential post office investors through his American Postal Owners Association. The USPS declined to comment on the risk of investing in postal real estate, but says that it continues to lease only a few of the properties it sells, and in most cases those leases are temporary.
9. We're a hotbed for crime.
Alongside your friendly mailman is a dark history of the Postal Service: It has long been a target -- or a medium -- for swaths of crime ranging from mail theft to Anthrax attacks to murder. For that reason, the USPS has its own police force that has been charged with safeguarding and ensuring confidence in the postal system for more than 200 years -- the U.S. Postal Inspection Service. Postal officials contend the threat is real: Postal inspectors arrested more than 5,500 suspects for mail- and postal-related crimes last year -- everything from using homeless people to cash stolen checks to sending suspicious powders and substances in the mail, including more than 200 improvised explosive devices. The Postal Inspection Service even played a role in the recent conviction of R. Allen Stanford for running a ponzi scheme, since the organization investigated fraudulent documents that went through the mail.
The biggest problems facing the postal system are mail fraud and mail theft, which accounted for half of last year's arrests. But a spokesman for the Postal Inspection Service says its activities deter and catch criminals who "want to threaten the American public through the mail system," and that post offices are safe: "There is no reason to be concerned." If consumers are ever worried that the person delivering their mail poses a danger, the Inspection Service advises, "Don't open the door."
10. Our greatest strength is supernatural.
Last year, at the direction of the Postal Regulatory Commission, a host of consulting firms measured what the PRC calls the "social benefit of the mail." It's a nearly intangible quality of the Postal Service -- its aura of Rockwellian nostalgia -- that many experts point to as a reason it should be preserved, despite its financial struggles. It's the factor that might lead people to bank at their post office instead of at the local Chase branch; that explains why putting a post office in a shopping center attracts and boosts small businesses that locate there; and that makes Congressional representatives reluctant to cut post office locations and hours (along with their fear of striking a nerve among voters who are passionately attached to old-fashioned mail, that is).
Because of its on-the-ground local infrastructure and its veritable army of couriers, the reports commissioned by the PRC noted the Postal Service's unique ability to deliver disaster relief provisions in an emergency such as a hurricane or bioterrorist attack. The Urban Institute hypothesized that crime rates in neighborhoods were lower during mail-delivery periods, though the study was suspended. "There is evidence that the presence of visible uniformed personnel who are well-recognized by the public play an important role in the social control of neighborhoods," the researchers wrote.
In his days as a letter carrier, Partridge says, he both lent a hand to a senior who fell down and helped a toddler find his way home. "When you have people going to people's houses five or six days a week, they put out fires, they see people who are sick," says PRC chairman Goldway. "They're sort of an extra police force."
Now you know the rest of the story about the United States Postal service. Hope you have a beary safe and great weekend.
Until we meet again; here's wishing you health, hope, happiness and just enough.
big bear hug,