February 29, 2024
The Essential Income REIT Achieves 9.91%–10.54% Tax-Equivalent Yields on 2023 Distributions
Joshua Ungerecht, a managing partner at ExchangeRight, shared that the Essential Income REIT’s consistently strong tax-equivalent yields have made it an attractive offering for retired investors looking for tax-advantaged income.

ExchangeRight

ExchangeRight, one of the nation’s leading providers of diversified real estate REIT and DST investments, has announced that the Essential Income REIT’s tax-equivalent yield on 2023 distributions was 9.91% for its Class A shares and 10.54% for Class I shares. The company’s calculations of tax-equivalent yield assume an investment was made for the full year at the REIT’s current offering price, with a 37% federal income tax rate, an 8% state income tax rate, and a 3.8% Medicare surtax.

The Essential Income REIT’s 2023 distributions to investors were reported as 57.24% nontaxable for federal and state income tax purposes (1099-DIV). The Section 199A deduction for REITs further decreased the federal income tax for 2023 by 20% of the 42.76% taxable amount.

Based on the current offering price, the Essential Income REIT has provided stable and growing distributions, with tax-equivalent yields higher than 9.5% for Class A shares and higher than 10% for Class I shares every year since the offering’s inception. Exact tax-equivalent yield will vary depending on an investor’s actual federal and state tax bracket and closing date. Each investor should consult with their own tax advisor. Past performance does not guarantee future results.

Joshua Ungerecht, a managing partner at ExchangeRight, shared that the Essential Income REIT’s consistently strong tax-equivalent yields have made it an attractive offering for retired investors looking for tax-advantaged income.

“On top of the capital preservation provided by our net lease platform generally, the Essential Income REIT has also consistently met investors’ increasing need for tax-advantaged income,” said Ungerecht. “The REIT’s tax-equivalent yields represent how the offering’s depreciation benefits can provide significant relief for accredited investors who often experience higher tax brackets. For such investors to achieve a roughly equivalent after-tax yield by investing in bonds or money market funds, those taxable securities would need to generate pre-tax yields greater than 9.5% at least. We are proud to have again delivered such favorable results for the investors, representatives, and advisors who trust us to manage and steward their capital.”

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 currently pays an annualized distribution rate on new investments of 6.44% for its Class I shares and 6.06% 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 December 31, 2023. The Trust Properties are occupied by 36 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.

Media Contact
Lindsey Thompson
Senior Media Relations Officer
lthompson@exchangeright.com
(626) 773-3448

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