ExchangeRight Wraps $98M Net Lease Offering

Warren Thomas, Managing Partner, ExchangeRight. Image courtesy of ExchangeRight

ExchangeRight has fully subscribed its Net-Leased Portfolio 59 DST, a $98.3 million offering that totals 261,644 square feet and is net-leased to grocery, pharmacy, medical and other necessity-based national tenants operating essential businesses.

Net-Leased Portfolio 59 (“NLP 59”) contains 15 properties in 15 markets diversified across 11 states and seven historically recession-resilient tenants: Mariano’s, Walgreens, CVS Pharmacy, Dollar General, Dollar Tree, Tractor Supply and Fresenius Medical Care.

The portfolio was launched with a weighted-average lease term of 11.4 years and a 36.61 percent loan-to-value utilizing five-year non-recourse interest-only financing. The portfolio reportedly has been structured to provide investors with monthly distributions starting at an annualized rate of 4.80 percent.

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NLP 59 is designed to focus on tenants and industries that have been historically resistant to economic downturns and have the potential to provide steady monthly distributions, no matter the economic environment, Warren Thomas, a managing partner at ExchangeRight, explained in a prepared statement. “Now is the time when investors need stable, passive income,” he added.

Retail resilience

ExchangeRight is a leading provider of diversified real estate DST and REIT investments. It and its affiliates’ vertically integrated platform features more than $5.6 billion in assets under management that are diversified across over 1,200 properties, and 22 million square feet throughout 47 states.

Tenants of ExchangeRight’s fully subscribed net-leased portfolio 59 DST. Image courtesy of ExchangeRight

It was less than a year ago that ExchangeRight fully subscribed its Net-Leased Portfolio 53 DST at $176.3 million, which was the company’s largest 1031-eligible investment offering to date. That portfolio comprised 25 assets located across 18 states and totaling more than 1.6 million square feet.

In May, Alex Sharrin, senior managing director at JLL Capital Markets, described for Commercial Property Executive how the retail portion of the net-lease sector “continues to draw private purchasers and 1031 buyers seeking these assets as an alternative to their fixed-income (equity) portfolios at a leverage neutral or slightly positive return.”