ExchangeRight, one of the nation's leading providers of diversified real estate DST and REIT investments, has brought its $69.6 million Net-Leased Portfolio 21 DST full-cycle on behalf of its investors by selling it to a REIT. The offering provided investors with total annual returns ranging from 6.68 to 8.88 percent, maintained uninterrupted monthly distributions despite significant market volatility throughout the offering's four-year hold period, and provided investors with multiple options at exit.
The portfolio consisted of 20 net-leased properties diversified across 264,394 square feet, 10 states, and eight national tenants with investment-grade credit or otherwise creditworthy financial metrics. Featured tenants operate in necessity-based industries and include Fresenius Medical Care, O'Reilly Auto Parts, Tractor Supply, and Walgreens.
Upon sale, ExchangeRight provided portfolio investors the option to complete a tax-deferred 721 exchange, perform a 1031 exchange, receive cash, or a combination of these options. For investors who chose to complete a tax-deferred 721 exchange into the acquiring REIT, the total return on sale including cash flow to investors was equivalent to 129.68 to 137.83 percent of initial capital investment based on the current value of the REIT shares provided as a part of the transaction. For investors who chose to cash out or complete a 1031 exchange, the Net-Leased Portfolio 21 DST total return on sale including cash flow was 129.54 to 137.89 percent of initial capital investment.
Joshua Ungerecht, a managing partner at ExchangeRight, said this successful full-cycle event is an example of how ExchangeRight's recession-resilient strategy can provide investors stable income, capital preservation, and flexible exit options in the face of unprecedented economic volatility.
"We're proud to complete another successful full-cycle event that protected investor capital, delivered uninterrupted distributions through the pandemic, and that provided multiple exit options at each investor's discretion," Ungerecht said. "By producing and managing diversified offerings focused on investment-grade credit tenants operating essential businesses, we have been able to provide investors with stable distributions, tax deferral, and capital preservation without exception and regardless of economic crises or recessions."