ExchangeRight Delaware Statutory Trust Offering Goes Full Cycle

ExchangeRight, a sponsor of securitized 1031 exchange real estate offerings, has taken its North Austin Apartment Portfolio Delaware statutory trust offering full cycle.

ExchangeRight, a sponsor of securitized 1031 exchange real estate offerings, has taken its North Austin Apartment Portfolio Delaware statutory trust offering full cycle. This marks the company’s 16th full-cycle offering and is part of the company’s current plan to sell into the multifamily market while buyer underwriting “remains aggressive and valuations remain at record levels.”

According to marketing documents sourced by The DI Wire, the DST’s portfolio was comprised of three Class B multifamily properties built between 1980 and 1984 with a total of 422 units. The properties include Amor, Feliz and Vida – all located in North Austin, Texas.

The private placement offering launched in October 2016 and sought to raise $21 million, according to a filing with the Securities and Exchange Commission. The portfolio’s sale price was not disclosed.

Exchangeright indicated that the full cycle transaction generated total returns of approximately 128.9 percent including return of capital to the DST and its investors. According to the company, final annualized returns to investors totaled 6.80 percent, outperforming its original target of a 6.52 percent annualized return.

ExchangeRight also said that it provided monthly distributions throughout the offering’s 4+ year hold period despite “significant headwinds caused by substantial property tax increases, rising insurance costs due to the impact of Hurricane Harvey on insurance companies, and the potential effect of COVID-19 and resulting government policies on the rental market and economy.”

“This successful full-cycle event represents our fifth sale in the multifamily sector since 2019,” said Warren Thomas, a managing partner of ExchangeRight. “We believe that selling assets at this time allowed us to take advantage of record cap rate valuations and best preserves investor capital while eliminating future risks which could erode investor value.”

ExchangeRight and its affiliates’ platform includes $3.2 billion in assets under management, comprised of 775 properties totaling approximately 13 million square feet and located throughout 39 states.

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