ExchangeRight Fully Subscribes $15.38 Million Essential Income 8 DST

ExchangeRight has fully subscribed Essential Income 8 DST, a $15.38 million portfolio of five net-leased properties, the California-based sponsor said. Closed to new investors, Essential Income 8 DST is the eighth Delaware statutory trust in ExchangeRight’s Essential Income DST series, which ExchangeRight said is structured to give investors accelerated access to the company’s Essential Income REIT through a tax-deferred Section 721 exchange after a targeted two-year hold.

Structured as a 100% equity offering, the portfolio consists of five properties totaling 57,813 square feet across Alabama, Arkansas, Pennsylvania, and West Virginia, leased to AutoZone, Dollar General, Tractor Supply Company, and Dollar General Market. The offering carries a current cash flow rate of 5.5%, according to ExchangeRight, and is supported by a 20-year master lease guarantee from the Essential Income REIT and its operating partnership.

The subscription follows Essential Income 7 DST, a $38.95 million, five-property portfolio ExchangeRight fully subscribed last month.

At disposition, Essential Income 8 DST investors are expected to have the option to complete a tax-deferred 721 exchange into the Essential Income REIT, which ExchangeRight said would provide pro rata access to the REIT’s monthly income, broader diversification, increased growth potential, enhanced liquidity, and estate planning advantages. The Essential Income REIT holds 436 properties across 38 states with net leases backed by 44 tenants the company describes as recession-resilient and primarily investment-grade, as of June 30. That is up from a 397-property, 37-state footprint as of March 31.

“Essential Income 8 DST’s swift subscription underscores the strength of investor appetite for a defined, tax-deferred path into the Essential Income REIT,” said Joshua Ungerecht, a managing partner at ExchangeRight. “This offering provides investors with a clear two-year runway toward the REIT’s growing base of broadly diversified, income-producing real estate, along with the enhanced liquidity and estate planning advantages that come with it.”

ExchangeRight’s platform held more than $7.5 billion in assets under management across more than 1,400 properties and 30 million square feet in 47 states as of June 30, up from more than $7.4 billion across the same property count and 28 million square feet as of May 31, according to the company.

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