Investors Fully Subscribe ExchangeRight’s All-Cash 3 DST With 5.15% Monthly Cash Flow
ExchangeRight, a Pasadena, Calif.-based sponsor of Delaware statutory trust and non-traded real estate investment trust investment offerings, fully subscribed its ExchangeRight All-Cash 3 DST offering. The company says the fund is comprised of a debt-free portfolio of net-leased real estate backed by investment-grade companies operating in necessity-based retail industries. The $16.36 million offering has been structured to provide investors with monthly distributions starting at an annualized rate of 5.15% covered 100% by in-place revenues from the portfolio.
The private placement offering was launched in March 2024.
All-Cash 3 DST features net-leased properties tenanted by Daybreak Market, Dollar General, and Dollar Tree. The portfolio’s properties together span more than 26,000 square feet in Florida and Texas, both of which are non-income-tax states.
ExchangeRight All-Cash 3 DST’s exit strategy aims to provide investors with a tax-deferred cash-out refinance option in addition to the ability to complete a 1031 exchange, 721 exchange, cash out, or a combination of these options.
Predicated upon successful future financing of the properties, ExchangeRight says it anticipates that investors will have the option to receive a portion of their initial investment using a tax-deferred cash-out refinance, with the potential to complete a tax-deferred 721 exchange of non-refinanced equity in a later transaction with an acquiring REIT.
Warren Thomas, managing partner at ExchangeRight, shared that the company continues to see sustained demand for the company’s all-cash DSTs and moderate loan-to-value net-leased DSTs, all of which have been able to produce monthly cash flow at rates meeting or exceeding projections.
Through the first six months of 2024, ExchangeRight had raised nearly $146 million for its DST offerings, ranking as the fourth most successful in the industry. In total, securitized DST offerings had raised an aggregate of $2.4 billion of investor equity as of June 30th.
“Our commitment to protecting investors first and foremost is what makes us distinctive in the 1031/DST marketplace,” said Thomas. “Like all the offerings in our net lease platform, All-Cash 3 DST is designed with conservative underwriting and a focus on long-term, net-leased properties backed primarily by investment-grade and historically recession-resilient tenants.
This investor-centric strategy has helped us maintain our perfect track record of every offering paying monthly investor cash flow at or above original underwriting.”
In May 2024, the company fully subscribed its $6.3 million ExchangeRight All-Cash DST, a debt-free portfolio of net-leased real estate backed by investment-grade companies operating in necessity-based retail industries. In April, it fully subscribed Net-Leased Portfolio 64 DST, an $89.2 million private placement offering.
ExchangeRight reports that the company and its affiliates’ platform has more than $6 billion in assets under management that are diversified across more than 1,200 properties and over 24 million square feet across 47 states, as of July 31, 2024. The company invests in net-leased properties in the “necessity-based” retail and healthcare industries, as well as value-add inline and outparcel retail spaces shadow-anchored by grocery tenants.
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