ExchangeRight Essential Income 6 DST
Limited Availability
Overview
ExchangeRight Essential Income 6 is a diversified portfolio of properties with net leases backed by historically recession-resilient tenants, with a 5.50% current cash flow featuring a 20-year master lease guarantee from the ExchangeRight Essential Income REIT and its Operating Partnership. This offering is intended to provide investors with current monthly income and accelerated access to the Essential Income REIT via a tax-deferred 721 exchange after a targeted two-year hold period.
The Essential Income 6 DST is structured to provide stable income and capital preservation through the Operating Partnership’s guaranty of the master lease base rent during the DST hold period. After approximately two years, the exit plan for DST investors is to complete a tax-deferred 721 exchange into the Essential Income REIT. The exit has been designed to provide investors pro rata access to the REIT’s monthly income, broader diversification, increased growth potential, enhanced liquidity, and estate planning advantages.
Key Investment Features
Structure
Delaware Statutory Trust (DST)
Investment Sponsor
ExchangeRight
Property Type(s)
Retail, NNN
Location(s)
MA, OK, TN, OH
Occupancy
100%
721 Exchange / UPREIT
Required
Minimum Investment
$100,000
Investment Strategy
Buy & Hold
Year 1 Yield
5.50%
In-Place Loan
No Loan; All-Cash
Avg. Remaining Lease Term
18.89 Years
Cash Flow Forecast
Year 1
Year 2
Year 3
Year 4
5.50%
5.58%
Sold
Sold
Year 5
Year 6
Year 7
Year 8
Sold
Sold
Sold
Sold
Year 9
Year 10
Sold
Sold
Investment Highlights
ExchangeRight provides a full income guarantee throughout the life of the DST.
As with other institutional pre-REIT programs, ExchangeRight's REIT is the master tenant (20-year term) of the entire DST portfolio, which presumably will drive a higher valuation upon 721 conversion.
Long-term net leases with a weighted-average remaining lease term of about 12 years
The portfolio targets necessity-based, recession-resilient retail and healthcare demand in growing suburban corridors
Exposure to multiple states and markets can help diversify regional economic and demand risk
Advantages
ExchangeRight was formed in 2012, has $5.6+ Billion of assets under management, invested in 1,200+ properties across 47 states
All of ExchangeRight’s full-cycle offerings have met or exceeded projected returns.
All of ExchangeRight’s active offerings are meeting or exceeding investor cash flow distributions.
Weaknesses
Flatter distributions.
Can only have a small amount of appreciation before 721 conversions.