PASADENA, Calif. - ExchangeRight has brought Net-Leased Portfolio 8 DST full cycle on behalf of investors. The offering invested in net-leased, necessity retail properties backed by investment-grade tenants that have been acquired as part of ExchangeRight’s aggregated portfolio exit strategy. ExchangeRight’s exit strategy provided each DST investor with the option to perform another 1031 exchange, receive cash, or complete a tax-deferred 721 exchange into the acquiring portfolio, or any combination of these options.
Net-Leased Portfolio 8 comprised 13 properties totaling 151,344 square feet and was diversified across 7 states. The portfolio had an acquisition cost of $35.9 million when the properties were acquired between October 2014 and February 2015. The portfolio was sold in October for $41.6 million. Taking into account returns to investors from operating cash flows and including initial investment, the total returns of the program were over 136% for investors selecting the 1031 or cash out options. For 721 investors, the return was over 146%, based on an independent valuation of the portfolio performed by KPMG.
The portfolio’s average annual rate of return for cash and 1031 exchange investors was 7.69%, higher than the company’s initial projections. For 721 exchange investors who received operating units in the aggregated portfolio, the average annual returns were equivalent to 9.99%, 35.91% higher than the company’s initial projections, given the net asset value of the combined portfolio based on KPMG’s valuation.
“Our aggregated exit strategy has made this full cycle event a true win-win for both ExchangeRight’s DST investors and for 721 exchange investors who continue to invest with us in our aggregated portfolio.” said Joshua Ungerecht, managing member of ExchangeRight. “By executing on our strategic exit for Net-Leased Portfolio 8, we were able to provide higher total returns than we originally projected for 1031 investors while creating value for 721 exchange investors through a highly diversified aggregated portfolio of properties leased to recession-resilient corporations.”
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 is known for consistently delivering broadly diversified portfolios of 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.