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ExchangeRight Brings 378-unit Multifamily DST Program Full Cycle with 6.82% Annualized Investor Returns


PASADENA, Calif. - ExchangeRight, one of the nation’s largest sponsors of securitized 1031-exchangeable real estate investments, has brought another multifamily DST full cycle, bringing the company’s total multifamily sales for 2019 up to $94.6 million. The DST invested in Mira Bella and San Martin Apartments, two Class B apartment communities consisting of 378 units on over 12 acres in Houston, TX. The properties were originally acquired for $21.38 million including reserves by investors and were sold on November 13, 2019 generating an annualized return of 6.82% to ExchangeRight investors, exceeding the company’s original projected return of 6.68%. The investment generated a total return of 129.25% in a little over four years, including a full return of investor capital at sale.

The DST program consistently paid monthly cash distributions at rates that were at or above their initial underwritten targets. In addition, the sale resulted in a modest profit to investors upon exit and each investor was given the option to complete a 1031 exchange or to receive cash proceeds.

“This offering is our fourth successful full-cycle DST program that we have completed this year, and was our most challenging due primarily to the 1,000-year flood caused by Hurricane Harvey which resulted in the submarket flooding as well as a significant increase in submarket crime, skips, defaults, bad credit, capital costs, and costly turnovers among other issues,” said Joshua Ungerecht, a managing member of ExchangeRight. “As a result, ExchangeRight provided capital infusions to address the property repairs and improvements to drive value for investors all while standing behind our master lease obligations. We never reduced, delayed, or missed a monthly distribution payment to investors over our 4+ year hold period, and we are proud to have gone far beyond our obligations to achieve a positive result for investors, despite the difficulties we met with this offering.”

“We are pleased to have concluded our fourth multifamily DST offering this year that has outperformed pro forma cash flows,” said Warren Thomas, one of ExchangeRight’s managing members. “Each full cycle program has consistently paid monthly cash distributions at or above projections and each sale resulted in a profit to investors. In total, we generated annual returns on our full cycle multifamily offerings of 8.76% per year, which represents over 32% outperformance compared to our underwritten pro forma for those offerings.”

ExchangeRight and its affiliates’ platform is diversified across more than 600 properties of over 14 million square feet located throughout 38 different states. More than 2,700 investors have trusted ExchangeRight to manage their capital. All of the company’s current and past offerings have met or exceeded targeted investor cash flow distributions for 90 consecutive months to date.


About ExchangeRight Real Estate, LLC

ExchangeRight is a privately held firm based in Pasadena, California. Together with its affiliates, it has over $2.3 billion in assets under management. ExchangeRight pursues its mission to empower people to be secure, free, and generous by providing income funds and 1031-exchangeable investment offerings that target secure capital, stable income, and strategic exits. The company strategically acquires and manages long-term, net-leased assets backed by investment-grade corporations that operate successfully in the necessity-based retail and healthcare industries. For more information, visit www.exchangeright.com.


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