ExchangeRight, a sponsor of securitized 1031 exchange real estate offerings, has taken its Net-Leased Portfolio 5 Delaware statutory trust offering full cycle.
The 118,600-square-foot portfolio was comprised of 14 properties in seven states that are net leased to Advance Auto Parts, AutoZone, Dollar General, Dollar Tree, Family Dollar, Sherwin-Williams, and The Christ Hospital.
According to a filing with the Securities and Exchange Commission, the private placement offering launched in early 2014 and sought to raise $13 million from accredited investors. The proceeds were deployed to purchase the 14 net-leased properties for $23 million.
In connection with the closing, ExchangeRight provided the investors in the portfolio with the option to perform another 1031 exchange, receive cash, complete a tax-deferred 721 exchange, or a combination of these options.
ExchangeRight reported that Net-Leased Portfolio 5 generated 157.08 percent total returns including return of capital for investors who chose to cash out or complete a 1031 exchange with their proceeds. For investors who chose to complete a tax-deferred 721 exchange into the acquiring real estate investment trust, the portfolio generated 163.48 percent total returns including return of capital for investors based on an independent KPMG valuation of the acquiring portfolio as of June 30, 2021.
ExchangeRight said that it provided uninterrupted monthly distributions to its investors over the offering’s entire hold period, meeting projected cash flow targets throughout.
“We are pleased to advance our long-term aggregated exit strategy with another DST that was focused on essential businesses and that was designed to protect and grow investor wealth,” said Warren Thomas, a managing partner of ExchangeRight. “We have once again expanded our platform, which allows us to enhance value for our investors and further strengthen our position to execute a public market exit in the future.”
In other company news, last month, ExchangeRight took its sixth and final multifamily offering full cycle with the sale of two Class B value-add properties located in El Paso, Texas.
ExchangeRight and its affiliates’ platform includes more than $4.5 billion in assets under management, across 1,000 properties totaling 18 million square feet in 43 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.