Analysis of Investments

Net-Leased Portfolio 12

ExchangeRight

This offering contains 19 single-tenant net lease properties spread across 8 states and leased to multiple tenants.  

Investment Highlights

  • Yr. 1 Cash-on-Cash 6.15%
  • Initial Occupancy 100.00%
  • Est. Time Horizon 10 years YEARS
  • Current Cash Flow 6.30%
  • Yr. 1 Cap Rate to Investor 5.67%
  • Investor Purchase Price $52,290,000
  • Total Offering Size $27,440,000

Loan Information

The debt for this offering has a 10-year term and is interest only for the entire term, with fixed interest at 4.65%. Cash sweep provision exists.

  • Yr. 1 DSCR 2.52
  • Loan-to-Offering 47.52%
  • Hold Period DSCR 2.47

Tenant Information & Lease Terms

The tenants for this portfolio consist of Advanced Auto Parts, Dollar General, Family Dollar, NAPA Auto Parts, Fresenius, Walgreens, Kroger, and Tractor Supply Co. 

The weighted average remaining lease term of 12.10 years. There are 7 NN leases and 12 NNN leases. The properties are located in Utah, Tennessee, Louisiana, North Carolina, South Carolina, Illinois, Texas, and Ohio.

Key Positives

  • This offering has both tenant and geographic diversification.

  • 16 properties leased to investment grade companies or have investment grade guarantors.

  • Rent bumps through out the hold period and extensions. 

  • Average remaining lease term is 12-years.

  • Sponsor using a master lease.  

Key Risks to Consider

  • The sales price for this portfolio or the individual properties may decline as remaining lease term falls below 10 years. 

  • Three tenants are not investment grade. 

  • Due to the geographic diversification investors may be required to file multiple state tax returns. 

  • The loan is interest only for the entire term.  

Investment Sponsor Information

ExchangeRight

According to the sponsor's website: "ExchangeRight Real Estate, founded in 2012, is a private real estate investment firm focused on the acquisition and management of single-tenant properties throughout the United States. With over $1.2 billion in assets under management diversified across 425 properties in 28 states, we focus on investment-grade, necessity-based retail and Class B/B+ value-added multifamily.

We believe that investors deserve an investment strategy that provides them with stable cash flow, capital preservation, and value-added return potential in the face of uncertain economic and financial conditions. We have implemented a strategy designed to directly address this so that we can preserve our investors' capital and provide attractive income on their capital until the timing is right to execute a strategic exit to maximize their returns."

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