ExchangeRight, one of the nation’s largest sponsors of securitized 1031-exchangeable real estate investments, has brought another multifamily Delaware statutory trust offering full cycle, bringing the company’s total multifamily sales to $94.6 million for 2019.
The DST offering invested in Mira Bella and San Martin Apartments, two Class B apartment communities located in Houston, Texas with a total of 378 units and more than 12 acres of land.
San Martin and Mira Bella Apartments were purchased in July 2015 for approximately $21.4 million including reserves by investors and sold in November 2019 for an undisclosed sum. The company reported an approximately 129 percent total return on equity investment, including return of capital, and an IRR of 6.99 percent to investors.
“This offering is our fourth successful full-cycle DST program that we have completed this year, and was our most challenging due primarily to the 1,000-year flood caused by Hurricane Harvey which resulted in the submarket flooding as well as a significant increase in submarket crime, skips, defaults, bad credit, capital costs, and costly turnovers among other issues,” said Joshua Ungerecht, a managing member of ExchangeRight.
“As a result, ExchangeRight provided capital infusions to address the property repairs and improvements to drive value for investors all while standing behind our master lease obligations,” he added. “We never reduced, delayed, or missed a monthly distribution payment to investors over our 4+ year hold period, and we are proud to have gone far beyond our obligations to achieve a positive result for investors, despite the difficulties we met with this offering.”
ExchangeRight is a privately held firm based in Pasadena, California. Together with its affiliates, it has more than $2.3 billion in assets under management. The company and its affiliates’ platform includes 600 properties totaling 14 million square feet located in 38 states.