ExchangeRight, has announced that for two consecutive quarters the Essential Income REIT was the only growth or stabilizing equity non-traded REIT (“NTR”) ranked in the highest grade for all three performance profile categories in Blue Vault’s non-traded REIT Industry Review for Q3 2024: “Operating Performance”, “Financing Outlook”, and “Cumulative MFFO Payout”.
The Essential Income REIT was the only NTR in its comparison class that experienced an increase in Net Asset Value (“NAV”) per share every quarter from Q1 2024 to Q4 2024. The Essential Income REIT’s NAV per share is $27.37 based in part on an independent real estate valuation of the REIT’s real estate by KPMG combined with its other assets and liabilities as of December 31, 2024.
The Essential Income REIT was one of only three NTRs that received a top-quartile grade for the “Financing Outlook” performance metric, representing that the REIT has an interest coverage ratio greater than 2.0 times and that it has less than 20% of its debt maturing in the next two years or at unhedged variable rates. Of the REITs with a top-quartile grade for Financing Outlook, the Essential Income REIT was the only comparable NTR with a 2024 YTD interest coverage ratio greater than 2.25 times. These distinctive features represent the REIT’s resilient ability to cover its financing costs with a robust margin in order to protect investors’ income and capital. Past performance is no guarantee of future results.
In Q3 2024, the Essential Income REIT was one of only two comparable NTRs with redemptions less than 1.00%, with redemptions totaling 0.88% of weighted average shares outstanding. In contrast, the other 11 NTRs averaged 2.87%, more than 3.2 times the rate experienced by the Essential Income REIT.
The Essential Income REIT was the only NTR that fully covered its distributions with Adjusted Funds from Operations (“AFFO”) or Modified Funds from Operations (“MFFO”), as reported in Blue Vault’s Q1, Q2, and Q3 Non-Traded REIT Industry Reviews. This represents the REIT’s consistent track record of fully funding its cash distributions solely from its operations instead of from investor equity or financing since inception. The Essential Income REIT’s Adjusted Funds from Operations (“AFFO”) to distribution coverage inception-to-date is 104.99% as of September 30, 2024.
The past performance of the REIT does not guarantee future results. All comparative claims about growth or stabilizing equity non-traded REITs are based on Blue Vault’s Q3 2024 Non-traded REIT Industry Review, Non-Traded REIT Fee Study (4th ed.), pp. 52-86.
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. The REIT is available to accredited investors only and focuses on investing in single-tenant, primarily investment-grade net-leased real estate. The REIT currently pays an annualized distribution rate on new investments of 6.35% for its Class I shares and 5.97% for its Class A shares, and targets 6.00% monthly tax-efficient income with a 10% total annual internal rate of return for its Class ER shares. The REIT 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, owns 362 properties in 34 states (collectively, the “Trust Properties”) as of December 31, 2024. The Trust Properties are occupied by 39 different primarily national 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. Please visit the REIT’s website to learn more about its Class ER, Class A, and Class I shares.
The past performance of the REIT, its tenants, and ExchangeRight does not guarantee future performance. “Investment-grade” refers to tenants whose long-term corporate debt rating is considered investment grade by Standard & Poor’s, Moody’s, and/or Fitch. An investment-grade rating is a rating that indicates that a corporate bond has a relatively lower risk of default than a corporate bond with a speculative grade. Adjusted Funds From Operations (AFFO) as defined by NAREIT measures a real estate company’s recurring/normalized FFO after deducting recurring capital improvement funding that is typically capitalized by REITs and the adjustment to GAAP revenue related to “straight-line” rents. There is no guarantee that the REIT’s objectives will continue to be achieved. The REIT is subject to the regular risks associated with real estate. Please review the Offering Memorandum to understand the REIT’s business plan, risks, and potential benefits.
Contacts
Media Contact
Lindsey Thompson
Senior Media Relations Officer
lthompson@exchangeright.com
(626) 773-3448
