ExchangeRight, a sponsor of securitized 1031 exchange real estate offerings, has taken its Net-Leased Portfolio 17 Delaware statutory trust offering full cycle, representing its twenty-fifth full-cycle event on behalf of investors.
According to a filing with the Securities and Exchange Commission, the private placement offering launched in August 2017 and sought to raise $31.5 million from accredited investors. Proceeds from the offering were deployed to purchase a 248,900-square-foot portfolio of 16 net-leased properties across the Southeast and Midwest for $68.4 million. Tenants include Dollar General, Tractor Supply, Walgreens, and Verizon Wireless.
The offering reportedly provided uninterrupted monthly distributions to investors beginning at 6.84 percent and ending at 7.10 percent, not including return of capital.
Upon sale, ExchangeRight offered portfolio investors the option to perform another 1031 exchange, receive cash, complete a tax-deferred 721 exchange, or a combination of these options.
According to ExchangeRight, for investors who chose to complete a 721 exchange into the acquiring REIT, the total annual return on sale including cash flow was equivalent to 7.80 percent of initial capital investment, based in part on an independent real estate valuation from KPMG of the acquiring REIT as of March 31, 2022.
For investors who chose to cash out or complete a 1031 exchange, the total annual return on sale was approximately 7.03 percent of initial capital investment including cash flow.
Warren Thomas, one of the managing partners at ExchangeRight, said “the successful exit and multiple investment options provided to each investor are hallmarks of the strength and optionality created by ExchangeRight’s aggregation strategy.”
“We are honored to have protected investor capital through 25 successful full-cycle offerings so far,” Thomas added. “For each net-leased portfolio that we have taken full cycle, we are pleased to have provided investors with flexible tax-deferral exit options so they can achieve their individual investment goals even in the midst of a volatile economic climate.”
In other company news, ExchangeRight recently surpassed $5 billion in assets under management.
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.