ExchangeRight fully subscribes $17.8m debt-free DST for Essential Income REIT

ExchangeRight announced the full subscription of Net-Leased All-Cash 20 DST, a $17.8 million debt-free portfolio of necessity-based retail properties, according to an IREI report published Oct. 22. The closed offering is no longer accepting investors and adds to the acquisition pipeline for ExchangeRight's Essential Income REIT.

The portfolio holds six net-leased properties totaling 75,237 square feet across Texas, South Carolina and Alabama. Tractor Supply Co., Dollar General, NAPA Auto Parts, Dollar Tree and O'Reilly Auto Parts are the tenants. The initial weighted-average lease term is 9.9 years.

The DST is designed to pay monthly distributions at a 5.20% current annualized rate, covered entirely by in-place lease revenue, according to IREI. Because the portfolio is debt-free, the distribution has no leverage component.

ExchangeRight lists several exit routes: a tax-deferred 721 exchange into Essential Income REIT, cash-out financing, a tax-deferred 1031 exchange, a cash-out or a combination. Pending successful future financing, the company intends to provide a tax-deferred lump sum of 20% or more of initial investment through a cash-out financing, IREI reported.