ExchangeRight Takes DST Offering Full Cycle, Reports 134% to 143% Returns
ExchangeRight, a sponsor of securitized 1031 exchange real estate offerings, has taken its Net-Leased Portfolio 16 Delaware statutory trust offering full cycle, representing its twenty-third full-cycle event on behalf of investors.
ExchangeRight, a sponsor of securitized 1031 exchange real estate offerings, has taken its Net-Leased Portfolio 16 Delaware statutory trust offering full cycle, representing its twenty-third full-cycle event on behalf of investors.
According to a filing with the Securities and Exchange Commission, the private placement offering launched in May 2017 and sought to raise $28.5 million from accredited investors.
The portfolio included 19 net-leased properties tenanted by Dollar General, Walgreens, Advance Auto Parts and Tractor Supply, as well as other essential businesses. The retail properties spanned 261,900 square feet across nine states.
ExchangeRight said that it provided investors in the portfolio the option to perform another 1031 exchange, receive cash, complete a tax-deferred 721 exchange, or a combination of these options.
For investors who chose to complete a tax-deferred 721 exchange into an acquiring real estate investment trust, the total return on sale including cash flow was equivalent to approximately 143 percent of initial capital investment based on an independent KPMG valuation of the acquiring portfolio as of December 31, 2021.
For investors who chose to cash out or complete a 1031 exchange, the total return on sale was approximately 134 percent of initial capital investment, including cash flow.
“Once again, we have enhanced investors’ returns, liquidity and optionality with another successful full-cycle event,” said Warren Thomas, a managing partner of ExchangeRight. “Our strategy of acquiring primarily investment-grade tenants occupying net-leased properties continues to be a successful way to build portfolios that maintain and grow investor wealth. This approach has provided returns that meet or exceed projections, empowering our investors with cash flows among the highest in the industry.”
ExchangeRight and its affiliates’ platform includes more than $4.7 billion in assets under management across 1,050 properties totaling 19 million square feet in 44 states, as of February 2022. 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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