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ExchangeRight Fully Subscribes Debt-Free $24.8 Million DST Offering

ExchangeRight, a provider of Delaware statutory trust and non-traded real estate investment trust investment offerings, has fully subscribed its Net-Leased All-Cash 2 DST, a $24.84 million offering of net-leased real estate for investors seeking a debt-free 1031 exchange strategy designed to produce stable income, provide tax advantages, and offer flexible exit options with the potential for enhanced returns.

Net-Leased All-Cash 2 DST is structured to provide investors with monthly distributions starting at an annualized rate of 5.15% from in-place revenue. The DST features four net-leased properties tenanted by BioLife, Tractor Supply, Dollar General, and Dollar Tree. The portfolio’s properties collectively span over 55,000 square feet and are located in Florida, Idaho, and Texas.

Net-Leased All-Cash 2 DST’s exit strategy is structured to provide investors with a tax-deferred 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 into ExchangeRight’s Essential Income REIT.

Warren Thomas, a managing partner at ExchangeRight, shared that the company’s All-Cash Offerings are structured to accommodate diverse investor needs, allowing investors who desire debt-free instruments to participate in ExchangeRight’s investment strategy.

“Our recession-resilient portfolios with non-recourse debt have historically performed in alignment with our expectations,” Thomas said. “When investors need a specific type of offering that doesn’t exist, we aim to create it for them. Closing this resilient All-Cash DST designed to preserve capital with the potential to provide enhanced returns and a future cash-out refinance option, gave us another opportunity to show how we put investors’ needs first.”

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 March 31, 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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