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ExchangeRight Fully Subscribes $6.3 Million All-Cash DST Offering

ExchangeRight, a provider of Delaware statutory trust and non-traded real estate investment trust investment offerings, has fully subscribed its ExchangeRight All-Cash DST, a debt-free portfolio of net-leased real estate backed by investment-grade companies operating in necessity-based retail industries.

The $6.31 million private placement offering was launched in September 2023.

The offering has been structured to provide investors with monthly distributions currently at an annualized rate of 5% from in-place revenue. All-Cash DST is a closed offering and is not accepting new investors. The All-Cash DST features net-leased properties: Tractor Supply and a Family Dollar and Dollar Tree combo store. The portfolio’s properties together span more than 30,000 square feet and are located in Abilene and Sweetwater, Texas.

ExchangeRight All-Cash DST’s exit strategy aims to provide investors with a cash-out refinance option in addition to the ability to complete a 1031 exchange, 721 exchange, cash out, or a combination of these options. Predicated upon successful future financing of the properties, ExchangeRight anticipates that investors will have the option to receive a portion of their initial investment using a tax-deferred cash-out refinance, with the potential to complete a tax-deferred 721 exchange of non-refinanced equity in a later transaction with an acquiring REIT.

Last month, ExchangeRight fully subscribed another DST: Net-Leased Portfolio 64 DST, an $89.2 million private placement offering.

Joshua Ungerecht, a managing partner at ExchangeRight, explained that the company continues to see sustained demand for stable all-cash offerings.

“We are committed to meet the ongoing needs in the market for 1031 DST offerings that focus on historically recession-resilient tenants and industries. Based on where we are in the economic cycle, more representatives and advisers are choosing investments that are foremost designed to protect their clients’ wealth and income,” said Ungerecht.

“This all-cash portfolio focuses on real estate that is producing cash flows from in-place lease revenue from Dollar Tree and Tractor Supply Company, which are investment-grade credit tenants and historically have thrived through economic downturns like the Great Recession and the COVID crisis,” added Ungerecht.

ExchangeRight reports that the company and its affiliates’ platform has more than $5.9 billion in assets under management that are diversified across more than 1,200 properties and over 24 million square feet across 47 states, as of April 30, 2024. The company invests in net-leased properties in the “necessity-based” retail and healthcare industries, as well as value-add inline and outparcel retail spaces shadow-anchored by grocery tenants.

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