PREP Exchange Launches First Debt-Free DST With Vermont Net Lease Property

PREP Exchange, an affiliate of PREP Property Group LLC, has launched its first Delaware statutory trust offering with PREP Essential Net Lease I DST, an all-cash, debt-free single-property acquisition structured for 1031 exchange investors.

The offering acquired the Shaw’s Supermarket property at 160 Paine Turnpike North in Berlin, Vt., and seeks to raise up to approximately $23.99 million.

“We originally purchased this property in July of 2022 for a prior PREP-sponsored offering and have watched the tenant commit to this location with multiple capital improvements, a 15-year lease extension in December of 2024, and the recent addition of O’Reilly’s as a sub-tenant,” said Sara Brennan, chief operating officer of PREP.

The property, built in 1996, has been continuously leased by Shaw’s Supermarkets Inc. since March 1997. It consists of approximately 35.75 acres and a two-unit building with approximately 89,702 rentable square feet of retail space occupied by Shaw’s and its subtenant, O’Reilly Auto Parts.

The lease runs through Dec. 31, 2039, with six five-year extension options at fair market value.

Shaw’s is the top grocer in Vermont by total store count and sales volume, according to the company, and the third-largest grocer in New England by total store count. Shaw’s Supermarkets is a subsidiary of Albertsons Companies Inc.

PREP Exchange was formed to provide accredited investors with fractional DST investments for 1031 exchange transactions.

PREP Property Group LLC, led by chief executive officer Michael Phillips, is a retail real estate operating and asset management company formed in 2015. The firm focuses on repositioning underperforming retail properties.

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