DST Offering Detail

ExchangeRight Net Lease Portfolio 36 DST

commercial net lease

DST Offering Highlights

ExchangeRight Net Lease Portfolio 36 consists of 2 corporate guaranteed “essential” net lease retail properties offering a total of 165,058 rentable sq. ft. Located in Wisconsin, the properties are leased to Pick n’ Save (a Kroger company), which has a proven track record and strong financials.  Importantly, Kroger meets the definition of “essential retail” and is thus permitted to continue to operate during the Covid-19 pandemic. The weighted average lease term of the portfolio is 10.2 years.
Property Status: Closed Offering
Property Type: Net Lease Retail
Property State:  Wisconsin
Property City:  Multiple Cities
Properties: 2
Units:  N/A
Offering Size: $44,503,300
Equity Offering:  $24,295,000
Loan-to-Value: 45.41%
Loan Terms:  10-yr Fixed, Interest Only at 3.75%
Cash Flow: Call to Confirm

About ExchangeRight

Founded in 2012, ExchangeRight is a vertically integrated real estate investment firm that targets secure capital, stable income, and strategic exits to protect and grow wealth. ExchangeRight strategically acquires and manages long-term, net-leased assets backed by investment-grade corporations that operate essential businesses successfully in the necessity-based retail and healthcare industries.

Benefits of a Delaware Statutory Trust

Delaware Statutory Trusts are a popular 1031 Exchange replacement property option that allows for fractional ownership of high-quality institutional properties acquired by and managed by large real estate firms, referred to as DST sponsors.  DSTs provide a unique and flexible solution to investment property owners who want to defer tax and continue to own investment property without the management requirements of directly owned property. Below are some of the benefits of investing in DST real estate.

  • Tax Savings: DSTs allow for the deferral of federal capital gains tax, state capital gains tax, net investment income tax, and depreciation recapture tax. The tax savings can be significant, especially in states where the potential tax liability can be as high as 42%.
  • Monthly Income Potential: DSTs are structured with an emphasis on cash flow for investors and typically include high-quality institutional property.
  • Eliminate Active Property Management: Ownership of a DST is entirely management free.
  • Eliminate Tax for Estate Beneficiaries: DSTs allow for a “step-up in basis” upon the passing of an owner (elimination of Capital Gains, Depreciation Recapture, and Net Investment Income Tax).
  • Low-Cost Non-Recourse Debt Matching: Most investors have debt that must be matched in their exchange, therefor many DSTs are structured with debt in place.
  • Low Risk of a Failed 1031 Exchange: Extensive DST property due diligence is prepared in advance and DST closings can occur quickly – in a matter of days.

DST Risks

DSTs offer many benefits however they are not suitable for everyone and come with risks. Therefore, DSTs are only available to accredited investors. Before deciding to invest in DST real estate, carefully consider the following considerations: Lack of liquidity, timing of exit, lack of control, and interest rates can affect financing, leasing, and appreciation. Additionally, loan modifications may not always be possible, cash flow is not guaranteed, and projected appreciation may not occur. There are also management costs and fees associated with owning DSTs which are disclosed in the prospectus. While not a precisely defined term, a high grade, institutional-grade, or institutional-quality property generally refers to a property of sufficient size and stature to merit attention from large national or international investors.