ExchangeRight Real Estate LLC, a sponsor of 1031 exchange investments, has fully subscribed Net Leased Portfolio 23 DST, a Reg D Delaware statutory trust offering comprised of 23 single-tenant net-leased retail assets. The total offering amount is approximately $93.2 million, of which $42.8 million is equity and $51.4 million is long-term fixed-rate financing.
The offering was designed for investors seeking to participate in a 1031 tax-deferred exchange as well as investors seeking a diversified net-leased real estate investment on a cash basis.
The portfolio includes 23 single-tenant, long-term net-leased retail assets that are 100 percent occupied. The company said that the offering’s projected cash flow as a percentage of equity is anticipated to be 6.30 percent in the first year of ownership.
First-year net operating income is diversified as follows:
- 38.5% Pharmaceutical (Walgreens)
- 21.3% Grocery (GIANT Food)
- 19.7% Discount Necessity Retail (Dollar General, Family Dollar)
- 11.4% Discount Auto (Advance Auto, AutoZone)
- 9.1% Agriculture (Tractor Supply)
“The market is severely overdue for a correction and/or recession so we are extremely pleased to have provided investors with yet another portfolio designed to weather the storm and provide stable income and capital preservation to help bridge the next economic downturn,” said Joshua Ungerecht, ExchangeRight managing member.
The portfolio closed with 10-year interest-only non-recourse financing with a stated annual rate of 4.42 percent and a weighted-average lease term of 11.7 years.
ExchangeRight and its affiliates have acquired or have under contract more than $1.7 billion of assets, including more than 500 properties that total over 12 million square feet across 38 states.
The company is currently operating two preferred equity funds and two companies that make short-term preferred equity and debt investments into investment properties. The company has previously sponsored 34 investment offerings.