ExchangeRight Surpasses $5 Billion in Assets Under Management
ExchangeRight, a sponsor of securitized 1031 exchange real estate offerings, has surpassed more than $5 billion in assets under management.
ExchangeRight, a sponsor of securitized 1031 exchange real estate offerings, reported that the company and its affiliates have surpassed more than $5 billion in assets under management. The firm previously surpassed $4 billion in AUM in December 2021.
ExchangeRight, founded by Joshua Ungerecht, David Fisher, and Warren Thomas in 2012, employs more than 160 people across the United States, with “larger hubs” in Idaho, Iowa, Illinois, Georgia, California, and Texas.
“The first word that comes to my mind when I think about reaching this point is ‘grateful’,” said Ungerecht. “I’m grateful for the people who put their trust in us to steward their wealth, for my partners’ integrity and commitment to excellence, and for the incredible team we get to work with every day that makes all of this possible. While five billion was an important milestone for us to cross, it is far more important to us that we meet or exceed our investor cash flow projections, which ExchangeRight has done for every investor, with every offering, in every month since our inception over 10 years ago.”
After starting with a two-property portfolio, ExchangeRight and its sister company, Telos Capital, has grown to manage more than 1,100 properties across 47 states, with more than 21 million square feet of commercial space under management.
ExchangeRight specializes in net-leased properties, and targets properties with leases backed by large, national companies with “primarily investment-grade credit ratings” that operate essential businesses, including grocery stores, pharmacies, and others with “strong, recession-resilient track records.”
ExchangeRight noted that it has “collected 100 percent of all rent due across its entire net lease platform since the company’s inception.”
Investors in ExchangeRight’s full-cycle net-leased DST offerings have the option to either cash out, complete a 1031 exchange, or execute a 721 exchange of their DST interests for operating partnership units in a real estate investment trust on a tax-deferred basis.
ExchangeRight said that “investors who elected to perform a 721 exchange have averaged the equivalent of a 9.25 percent annualized return on their initial capital investment given their ability to invest in the acquiring REIT at a discount to its NAV, which translated into returns that were more than 30.88 percent higher than projections.”
For those investors electing to receive cash or execute a 1031 exchange upon exit, ExchangeRight reported that its full-cycle offerings have generated an average annualized return to investors of 7.69 percent on initial capital, which is 8.42 percent higher than projections.
“Following the Great Recession, we analyzed the real estate that had performed well even in the most difficult economic environments, and strategically based our net lease platform on those assets,” Fisher said. “Our tenants operate businesses that continue to thrive through different economic climates because, regardless of anything else going on, people need groceries. They need medication and healthcare. They need basic necessities. These are businesses that have not only remained resilient, but have demonstrated meaningful growth, which has enabled them to continue to pay their rents and meet their lease obligations through recessions, and even through the government-imposed shut-downs related to the COVID crisis that negatively impacted so many other aspects of the economy.”
ExchangeRight and its affiliates’ platform has more than $5.2 billion in assets under management, diversified across more than 1,100 properties totaling 21 million square feet in 47 states. 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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