Analysis of Investments

Net-Leased Portfolio 17

ExchangeRight

This offering from ExchangeRight features 16 single tenant, net-lease, retail properties.  The properties are located in Wisconsin, South Carolina, Louisiana, Ohio, Illinois, and Virginia.  

Investment Highlights

  • Yr. 1 Cash-on-Cash 6.84%
  • Initial Occupancy 100.00%
  • Est. Time Horizon None YEARS
  • Current Cash Flow 6.84%
  • Yr. 1 Cap Rate to Investor 5.65%
  • Investor Purchase Price $68,400,000
  • Total Offering Size $31,540,000

Loan Information

10-year 3.993% interest-only, fixed-rate loan

  • Yr. 1 DSCR 2.55
  • Loan-to-Offering 53.89%
  • Hold Period DSCR 2.61

Tenant Information & Lease Terms

The tenants for this offering are Walgreens, Verizon, Dollar General, Advance Auto Parts, Tractor Supply Company, Goodwill, and Pick 'n' Save.

The Weighted average remaining lease term is 12.2 years. This portfolio has 6 NN leases and 10 NNN leases.

Key Positives

  • This offering offers tenant and geographic diversification. 

  • Rent bumps throughout the hold term. 

  • 12 of the 16 properties are leased to tenants with investment-grade financials or have investment grade corporation guarantors. 

  • Average lease term is 12.2 for the portfolio.

Key Risks to Consider

  • Upon a sale the price the properties might have declined if the time leftover on the lease is under ten years.

  • It is not guaranteed that any tenant will renew the lease after its first term.

  • Payments on the loan are interest only for the loan's whole term.

  • Four tenants are not investment grade or lack an investment grade lease guarantor. 

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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