PASADENA, Calif., June 18,
2024 /PRNewswire/ -- ExchangeRight, one of the
nation's leading providers of diversified real estate DST and REIT
investments, has announced that it has successfully launched a new
share class for its Essential Income REIT, exclusively for
broker-dealer representatives and their clients.
The newly introduced ER shares provide a distinctive way of
participating in the Essential Income REIT that targets a 10%
internal rate of return net to investors. The shares' internal rate
of return is supported by a current monthly tax-efficient income of
6.00% annualized and additional growth potential generated by
participation in the REIT's value in addition to ExchangeRight's
incentive fees and Sponsor DST fees. Please review the PPM for a
complete description of the potential benefits and risks of the new
ER share class.
The Class ER shares' baseline 6.00% annual return target is
anchored by the performance of the Essential Income REIT's
$1.2 billion real estate portfolio,
which is diversified across 353 properties, 34 states, and 36
historically recession-resilient and primarily investment-grade
credit tenants as of May 31, 2024.
The REIT has fully covered its dividend since inception and has
collected 100% of rents regardless of economic volatility to date.
Past performance does not guarantee future results.
As the REIT acquires additional net-leased properties, ER share
investors participate in ExchangeRight's performance-based
incentive fee at two times their Class ER pro rata ownership in the
REIT. Class ER investors may also share a portion of the company's
DST fees earned upon the REIT's acquisition of ExchangeRight's
Net-Leased Portfolios.
The acquisitions enabled by ER shares' capital raise are
anticipated to enhance the Essential Income REIT's diversification,
Adjusted Funds From Operations, and long-term investment capital
from DST investors who complete a tax-deferred 721 exchange into
the REIT. Class ER share investors may directly benefit from this
potential enhancement of the REIT's portfolio and value, given
their right to participate in a portion of ExchangeRight's fees and
the expected conversion of Class ER shares into Class I shares on a
1:1 basis at a future date.
"Our new ER shares are structured to achieve a special win-win
arrangement for the Essential Income REIT's investors and
ExchangeRight," said Joshua
Ungerecht, a managing partner at ExchangeRight. "In exchange
for providing longer-term capital to accelerate the REIT's
acquisitions and value enhancement, Class ER investors may directly
share in the additional potential profits resulting from these
acquisitions. Moreover, ER share investors may benefit from
significant tax efficiencies throughout the targeted five-year hold
period and additional tax-deferral options upon an eventual ER
share conversion. We are excited by this unique share structure
that is available exclusively to broker-dealer representatives and
their clients, as we seek to provide them with tax-advantaged
income and upside potential in order to advance the REIT's
long-term aggregation and investment strategy."
There is no guarantee that the new ER share class Offering will
achieve its investment objectives. Returns are not guaranteed and
may change. Past performance of the Essential Income REIT is no
guarantee of future results. This Offering is for accredited
investors only. Potential investors should consult their tax or
legal professional to understand how the tax strategies may affect
their specific situation. Potential investors must review the
Offering Memorandum in its entirety to understand the potential
benefits and risks of this Offering.
About ExchangeRight's Essential Income REIT
The Essential Income REIT, a Maryland statutory trust, is a
self-administered real estate company, formed on January 11, 2019, focusing on investing in
single-tenant, primarily investment-grade net-leased real estate.
The REIT currently pays an annualized distribution rate on new
investments of 6.41% for its Class I shares and 6.02% for its Class
A shares, and targets 6.00% monthly tax-efficient income with a 10%
total annual internal rate of return for its Class ER shares. The
REIT has fully covered its dividend with Adjusted Funds from
Operations since its inception and through its most recently
reported period. The Company, through its operating partnership,
ExchangeRight Income Fund Operating Partnership, LP, owns 353
properties in 34 states (collectively, the "Trust Properties") as
of May 31, 2024. The Trust Properties
are occupied by 36 different national primarily investment-grade
necessity-based retail tenants and are additionally diversified by
industry, geographic region, and lease term. The Company has
elected and is qualified to be taxed as a real estate investment
trust ("REIT") for U.S. federal income tax purposes. Please visit
the REIT's website to learn more about its Class ER, Class A,
and Class I shares. Past performance of the REIT and
ExchangeRight does not guarantee future performance.
Media Contact
Lindsey Thompson
Senior Media Relations Officer
lthompson@exchangeright.com
(626) 773-3448
View original content to download
multimedia:https://www.prnewswire.com/news-releases/new-er-share-class-introduced-for-exchangerights-essential-income-reit-302175896.html
SOURCE ExchangeRight