ExchangeRight Net-Leased All-Cash 19 DST

Overview

A debt-free portfolio of three single-tenant, necessity-based net-leased retail properties (122,149 SF total; 10.7-year WALT) acquired in early 2026 and held free and clear, sponsored by ExchangeRight Real Estate, LLC. The portfolio comprises a ~68,459 SF Fred Meyer (a wholly-owned Kroger Co. subsidiary; Kroger S&P BBB) on ~11.65 acres in Shelton WA on a double-net (NN) lease (~58% of NOI; grocery plus fuel), a 50,354 SF Hobby Lobby in Scottsboro AL leased through 2040 (~29% of NOI; three 5-year options), and a 3,336 SF Verizon Wireless (Cellular Sales of Illinois, LLC) in Roscoe IL leased through 2035 (~13% of NOI; two 5-year options). Going-in cash flow is 5.15%, escalating to 5.49% by year 10 (~5.26% average) on contractual rent. The all-equity structure removes refinancing and maturity risk. The exit is ExchangeRight's REIT aggregation strategy: the Essential Income REIT is targeted to acquire the DST interests within ~10 years via an optional Section 721 exchange, with cash-out and combination elections available. The $26,950,000 offering is 100 Class 1 interests at $269,500 ($100,000 minimum equity).

Investment highlights

• The three-property portfolio is held free and clear with no mortgage, eliminating refinancing, maturity, rate-cap, and foreclosure risk and the equal-or-greater-debt 1031 requirement. Tenants operate in historically recession-resilient, necessity-based retail (grocery, discount craft retail, wireless), supporting income durability through cycles.
• Fred Meyer (a wholly-owned Kroger subsidiary; Kroger Co. S&P BBB) anchors ~58% of NOI on a grocery-plus-fuel format, providing an investment-grade credit backbone. The same fact concentrates the majority of income in a single tenant on a double-net (NN, not absolute-NNN) lease that leaves the trust with certain structural and capital responsibilities.
• A 10.7-year weighted-average lease term with staggered expirations (Verizon 2035, Hobby Lobby 2040) plus renewal options across all three tenants underpins durable contractual income across the targeted hold. Income growth is modest and contractual, lifting cash-on-cash only from 5.15% to 5.49% over ten years.
• The offering is engineered as a feeder into ExchangeRight's Essential Income REIT, which targets acquiring the DST interests within ~10 years. Investors may elect a tax-deferred Section 721 exchange into the REIT operating partnership, a cash-out, or a combination, providing a defined (if sponsor- and REIT-capital-dependent) exit path.
• Total upfront load is comparatively low at ~9.46% of equity (7.23% selling/offering plus a 1.98% acquisition fee and a 0.25% reallowance), modest for an all-cash DST, with ~1.48% of proceeds funded into reserves for operations and asset management.

Sponsor

This offering is sponsored by ExchangeRight. Baker 1031 Investments is independent of the sponsor and provides advisory and brokerage services to accredited investors.