DST Offering Detail
ExchangeRight Net Leased Portfolio 58 DST
DST Offering Highlights
ExchangeRight Net Lease Portfolio 58 consists of 25 corporate guaranteed net lease retail properties located in three regions of the United States. The properties are 100% leased to eight high-quality, recession-resilient tenants with proven track records and strong financials. The weighted-average lease term of the portfolio is 9 years. The portfolio is highlighted by Dollar Tree, Walgreens and CVS Pharmacy.
| Property Status: | Closed Offering |
|---|---|
| Property Type: | Net Lease Retail |
| Property State: | Multiple States |
| Property City: | Multiple Cities |
| Properties: | 25 |
| Units: | N/A |
| Offering Size: | $71,135,000 |
| Equity Offering: | $40,000,000 |
| Loan-to-Value: | 43.77% |
| Loan Terms: | 7-yr Fixed, 7-yr Interest Only at 5.29% |
| 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. Based out of Pasadena, CA, ExchangeRight is diversified across 43 different states and 1,000+ properties. The firm boasts over $4.5B in assets under management and 18+ million sq ft of commercial retail space. All full cycle offerings have met or exceeded projected returns. Tenants of ExchangeRight include Napa Auto Parts, Publix, Walgreens, and Tractor Supply Co. ExchangeRight places an emphasis on properties that are investment-grade, necessity-based retail and healthcare in nature.
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.
