ExchangeRight Essential Income REIT NAV Increases for Three Consecutive Quarters
ExchangeRight, a sponsor of Delaware statutory trust and non-traded real estate investment trust investment offerings, announced that the net asset value of its Essential Income REIT has increased for three consecutive quarters, reaching $27.29 per share based as of Sept. 30, 2024. This is a 0.11% increase over its $27.26 NAV in the prior quarter.
“The steady increase of the Essential Income REIT’s net asset value, even in the face of persisting economic volatility, is a sign of the resilience of its diversified portfolio,” said Warren Thomas, a managing partner at ExchangeRight. “We credit this resilience to the REIT’s conservative strategy and design, which is structured first and foremost to preserve investor capital and provide stable, tax-advantaged cash flow.”
As of the end of the third quarter, the Essential Income REIT’s portfolio includes 353 properties net leased to 37 primarily investment-grade tenants successfully operating in the necessity-based retail and healthcare industries and diversified across 34 states – providing added value for investors through ExchangeRight’s aggregation strategy, according to the company.
The Essential Income REIT’s monthly distribution rate to investors has remained stable and grown five times since its 2019 launch. The REIT’s adjusted funds from operations continue to fully cover its current annualized net distribution of 6.37% for Class I shares and 5.99% for Class A shares.
“The REIT has been able to achieve these objectives on behalf of investors due to its broad diversification, its primarily investment-grade tenants operating in necessity-based industries, and its ability to cover its dividend with adjusted funds from operations,” added Thomas.
Formed in January 2019, the REIT is available to accredited investors only and focuses on investing in single-tenant, primarily investment-grade net-leased real estate. The REIT targets a 10% total annual internal rate of return for its Class ER shares.
In June 2024, The DI Wire reported that the REIT had launched the then-new ER share class exclusively for broker-dealer representatives and their accredited investor clients. ExchangeRight said the shares’ internal rate of return is supported by a current monthly tax-efficient income of 6% annualized and additional growth potential generated by participation in the REIT’s value in addition to ExchangeRight’s incentive fees and sponsor DST fees.
According to the sponsor company, the Class ER shares’ baseline 6% annual return target is anchored by the performance of the Essential Income REIT’s real estate portfolio, more than $1.2 billion as of Sept. 30, 2024. The REIT has fully covered its dividend since its January 2019 inception and has collected 100% of rents regardless of economic volatility. The REIT became a public reporting company one year ago.
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