ExchangeRight
Watch Here: Investors Seeking Value Creation Fully Subscribe ExchangeRight’s Third Value-Add Portfolio
ExchangeRight, one of the nation’s leading providers of diversified real estate DST and REIT investments, has announced the company has fully subscribed its $18.73-million Value-Add Portfolio 3 DST, the third offering launched from its value-add platform. The offering has been structured to provide investors with monthly distributions currently at an annualized rate of 5.25% from in-place revenue. Value-Add Portfolio 3 DST is a closed offering and is not accepting new investors.
VAP 3 has significantly outperformed pro forma underwriting from inception to date. ExchangeRight’s value-creation strategy focuses on proactively increasing occupancy across the portfolio’s shopping centers and securing favorable renewals with existing tenants. Positive variances in both total income and the company’s Asset Management team’s ability to mitigate operating expenses has led to actual Net Operating Income that surpassed projections by 12.2% through the first 10 months of VAP 3’s fiscal year 1.
VAP 3 is a diversified portfolio of in-line and outparcel retail tenants shadow-anchored by long-term net-leased and strong-performing grocery and national retail companies. The portfolio features properties that exhibit in-place cash flow with the potential to preserve capital, pay current income, and provide long-term upside via strategic leasing initiatives and tenant improvements. VAP 3 intends to provide investors with enhanced value and multiple exit options through ExchangeRight’s aggregation strategy.
The offering aims to provide current income and long-term upside potential to investors from more than 43 unique tenants occupying 8 in-line shopping centers diversified across 7 states. The centers collectively span 95,914 square feet and are shadow-anchored by historically recession-resilient companies, including UnityPoint Health, ShopRite, Giant Eagle, and Food Lion.
According to an independent due diligence report from FactRight, VAP 3’s assets were acquired “for an atypically significant discount to recently appraised values.” The portfolio’s total third-party appraised value of $23.07 million is 23% greater than the investor purchase price, which includes over $3 million of fully accountable capital and operating reserves held on behalf of investors.
Warren Thomas, a managing partner at ExchangeRight, explained that despite its distinctive value-add approach, the offering is based on the same conservative underwriting and goals of capital preservation and stable income exhibited by ExchangeRight’s net lease platform.
“We apply the same in-depth due diligence, strategic diversification, and investor-centric approach to the construction of our Value-Add Portfolios as we do for our net-leased DST and REIT offerings,” Thomas said. “So far, our Asset Management and Leasing Initiatives teams have driven favorable performance for VAP 3, and we remain committed to diligently prospecting for potential tenants to fill the vacancies that helped us acquire these assets at such an advantageous discount.”
About ExchangeRight
ExchangeRight and its affiliates’ vertically integrated platform features more than $5.9 billion in assets under management that are diversified across over 1,200 properties, and 24 million square feet throughout 47 states, as of May 31, 2024. 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, all of which have historically met or exceeded investor projections since ExchangeRight’s inception. The company structures and manages net-leased portfolios of assets backed primarily by investment-grade corporations that have successfully operated 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 on behalf of more than 8,200 investors nationwide. Past performance does not guarantee future results. Please visit www.exchangeright.com for more information.
Media Contact
Lindsey Thompson
Senior Media Relations Officer
lthompson@exchangeright.com
(626) 773-3448
