PASADENA, Calif. - ExchangeRight, the nation’s second largest sponsor of securitized 1031-exchangeable real estate investments, has recently brought three of its DST programs full cycle. The DSTs had each invested in value-added Class B multifamily properties, which as of September 12, 2019 have sold for a combined total of over $70 million, representing an average net annual rate of return of 9.40% to ExchangeRight investors, which is over 42% higher than the company’s initial underwriting targets.
Each DST program consistently paid monthly cash distributions at rates that were at or above their initial underwritten targets. In addition, each sale resulted in a profitable exit for investors while providing them the option to complete another 1031 exchange or to receive cash proceeds. The properties sold consisted of Van Mark Apartments, a 144-unit apartment community covering 13 acres in Monroe, Louisiana, Lakeside at Arbor Place, a 246-unit complex of 14 apartment buildings in the Atlanta metropolitan area, and Crystal Lake Apartments, a 224-unit multifamily property in Pensacola, Florida.
“Our decision to exit these investments on behalf of investors was predicated on the accretive returns that we were able to generate in a substantially shorter hold period than originally envisioned,” said Joshua Ungerecht, a managing member at ExchangeRight. “These accelerated returns were made possible by our driving net operating growth more aggressively than projected and due to the high valuations that the market has been paying for multifamily investments. Moreover, we also desired to help investors avoid the increasing risk of what appears to be a looming and potentially severe recession within the next few years.”
“This concludes another successful exit with enhanced investor returns that outperformed our underwriting targets,” said Warren Thomas, a managing member at ExchangeRight. “We credit this success to our comprehensive acquisition and asset-management strategy for Class B multifamily properties, and our ability to be nimble in seeking a strategic exit as the market for multifamily has become significantly overvalued."
ExchangeRight and its affiliates’ platform is now diversified across more than 600 properties of over 14 million square feet, diversified across 38 different states. More than 2,500 investors have trusted ExchangeRight to manage their capital, and all of the company’s offerings have met or exceeded targeted investor cash flow distributions for 88 consecutive months since the company’s inception. ExchangeRight’s 2018 sales grew 35.1% year-over-year and the company’s production for 2019 is on pace to grow at a similar rate.
About ExchangeRight Real Estate, LLC
ExchangeRight is a privately held firm based in Pasadena, California; together with its affiliates, it has over $2.1 billion in assets under management. ExchangeRight pursues its mission to empower people to be secure, free, and generous by providing 1031-exchangeable investment offerings that target secure capital, stable income, and strategic exits. The company is known for consistently delivering broadly diversified 1031-exchangeable 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.