ExchangeRight Takes 17-Property DST Offering Full-Cycle

ExchangeRight, a sponsor of securitized 1031 exchange real estate offerings, has taken its Net-Leased Portfolio 18 Delaware statutory trust offering full cycle by selling the portfolio to an affiliated real estate investment trust.

ExchangeRight, a sponsor of securitized 1031 exchanges and other real estate offerings, has taken its Net-Leased Portfolio 18 Delaware statutory trust offering full cycle, representing its twenty-sixth full-cycle event on behalf of investors.

According to a filing with the Securities and Exchange Commission, the private placement offering launched in November 2017 and sought to raise $28.7 million from accredited investors. Proceeds from the offering were used to purchase a 268,000-square-foot portfolio of 17 net-leased properties for $62.2 million. Tenants at the properties include CVS, Tractor Supply, Dollar General, and Fresenius Medical Care.

ExchangeRight reported that total annual returns to investors, including cash flow, ranged from 6.67 to 6.98 percent, while providing uninterrupted monthly distributions to investors averaging 6.65 percent and meeting cash flow projections.

ExchangeRight offered investors the option to complete a tax-deferred 721 exchange into an acquiring REIT, perform a 1031 exchange, receive cash, or a combination of these options.

For investors who chose to complete a tax-deferred 721 exchange, the total return on sale including cash flow was equivalent to 132.74 percent of initial capital investment based in part on KPMG’s independent valuation of the acquiring portfolio’s real estate combined with its other assets and liabilities as of June 30, 2022.

For investors who chose to cash out or complete a 1031 exchange, the total return on sale including cash flow was approximately 131.30 percent of initial capital investment.

Joshua Ungerecht, one of the managing partners at ExchangeRight, said “the optionality created by ExchangeRight’s aggregation strategy allows for successful exit and multiple investment options.”

“This accomplishment is another testament to the stability of our offerings,” Ungerecht said. “Our strategy continues to preserve investor capital and produce income despite changes in the market…”

ExchangeRight and its affiliates’ platform has more than $5.3 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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