ExchangeRight, one of the nation’s leading providers of diversified real estate DST and REIT investments, has announced that the company’s Essential Income REIT has acquired a portfolio of 15 net-leased assets, adding 231,654 square feet of net-leased property to the Essential Income REIT. This latest acquisition brings the REIT’s acquired assets to 352 net-leased properties diversified across 37 national creditworthy tenants, 34 states, and 4.7 million square feet. The REIT’s total acquired assets are occupied primarily by investment-grade tenants successfully operating essential businesses in recession-resilient industries, including healthcare and necessity-based retail.
The Essential Income REIT acquired the portfolio of net-leased assets for $84 million. In connection with the transaction, former investors of the seller performed a tax-deferred 721 exchange into the REIT’s Operating Partnership (“OP”), resulting in the issuance of $18.2 million of OP Units by the Essential Income REIT to new investors. The REIT’s current distribution from operations represents a 6.36% annualized return based on the current net asset value (“NAV”) per share.
The acquired assets were part of the Essential Income REIT’s acquisition pipeline, which is included in the REIT’s fully identified portfolio of 943 properties net-leased to 55 tenants across 627 markets. More than 94% of the identified portfolio’s base rent is generated from essential businesses.
“Rather than taking a blind pool approach, the Essential Income REIT’s aggregation strategy begins with a large, fully identified portfolio of rigorously vetted properties,” said Joshua Ungerecht, a managing partner at ExchangeRight. “This pre-arranged strategic growth provides our REIT investors with a systematic pipeline of future acquisitions to achieve enhanced diversification and return potential, supported by similar net-leased properties with primarily investment-grade tenants.”
ExchangeRight and its affiliates’ vertically integrated platform features more than $5.6 billion in assets under management that are diversified across over 1,200 properties, and 23 million square feet throughout 47 states. ExchangeRight pursues its passion to empower people to be secure, free, and generous by providing REIT, fund, and 1031 DST portfolios that target secure capital, stable income, and strategic exits. The company structures and manages net-leased portfolios of assets backed primarily by investment-grade corporations that successfully operate in the necessity-based retail and healthcare industries, as well as diversified value-add portfolios of inline and outparcel retail properties shadow-anchored by strong-performing grocery tenants. Past performance does not guarantee future results. Please visit www.exchangeright.com for more information.
About ExchangeRight’s Essential Income REIT
The Essential Income REIT, a Maryland statutory trust, is a self-administered real estate company, formed on January 11, 2019, focusing on investing in single-tenant, primarily investment-grade net-leased real estate. The REIT pays an annualized distribution rate on new investments of 6.36% for its Class I shares and 5.98% for Class A shares and has fully covered its dividend with Adjusted Funds from Operations since its inception and through its most recently reported period. The Company, through its operating partnership, ExchangeRight Income Fund Operating Partnership, LP, owned 352 properties in 34 states (collectively, the “Trust Properties”) as of August 31, 2023. The Trust Properties are occupied by 37 different national primarily investment-grade necessity-based retail tenants and are additionally diversified by industry, geographic region, and lease term. The Company has elected and is qualified to be taxed as a real estate investment trust (“REIT”) for U.S. federal income tax purposes. For more information, please visit the Class A website for broker-dealers, registered representatives, and their investors, or the Class I website for RIAs, advisors, family offices, institutions, and their investors. Past performance of the REIT and ExchangeRight does not guarantee future performance.
Senior Media Relations Officer