ExchangeRight Essential Income REIT Reports 10.42% Tax-Equivalent Yield for 2025
ExchangeRight Essential Income REIT, a non-traded real estate investment trust sponsored by ExchangeRight and focused on net-leased properties in necessity-based retail and healthcare industries, reported that its tax-equivalent yield on 2025 distributions was 10.42%.
“The Essential Income REIT’s 10.42% tax-equivalent yield for 2025 is a testament to our disciplined strategy, operating results, and the tax-efficiency we are able to generate in our REIT structure,” said Dave Van Steenis, president and chief financial officer of ExchangeRight.
This yield percentage, according the REIT, assumes that an investment was made for the full year at the current net asset value per share. Current and historical investor distributions and tax-equivalent yields presented are based on a 37% federal income tax rate, an 8% state income tax rate, and a 3.8% Medicare surtax.
“By delivering distributions fully covered by operating results that were simultaneously treated as over 62% non-taxable return of capital for tax purposes and also benefited from the Section 199A tax deduction, we are providing a powerful tool for advisors to help their clients maximize their net, after-tax income in a challenging economic environment,” added Van Steenis.
Source: ExchangeRight, March 11, 2026.
The Essential Income REIT’s 2025 distributions to investors were reported as a 62.05% non-taxable return of capital for federal income tax purposes (Form 1099-DIV), meaning that 37.95% of the 2025 distributions that investors received from the Essential Income REIT were subject to federal or state income tax.
The Section 199A deduction for REIT distributions further decreased the federal income tax for 2025 by 7.59% of the taxable amount, according to the company.
Based on the current NAV per share of $27.46 as of Dec. 31, 2025, the Essential Income REIT has provided distributions the company said were fully covered by operations, with tax-equivalent yields higher than 9.9% since the offering’s inception.
The company said that it has continued to fully cover its distribution from operations, reporting a 103.51% adjusted funds from operations-to-distribution coverage ratio inception-to-date through 2025.
The REIT noted that exact tax-equivalent yield will vary depending on an investor’s actual federal and state tax bracket and closing date.
Last summer, the company launched its Class D shares. According to ExchangeRight, the Class D shares feature 0% net upfront commissions; no placement agent fee; and no advisory, financing, or disposition fees, which the sponsor describes as among the industry’s lowest fee structures.
ExchangeRight and its affiliates’ vertically integrated platform features more than $7.2 billion in assets under management that are diversified across over 1,400 properties, and 28 million square feet throughout 47 states, as of Feb. 28, 2026.
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