ExchangeRight Sells Net Lease Portfolio for $41.6M
The 151,344-square foot portfolio was acquired $35.9 million between October 2014 and February 2015.
PASADENA, CA—ExchangeRight has sold a 13-asset net-leased, necessity retail portfolio for $41.6 million on behalf of its investor owners.
Under its aggregated portfolio exit strategy, the company also provided each DST investor with the option to perform another 1031 exchange, receive cash, or complete a tax-deferred 721 exchange into the acquiring portfolio.
The portfolio totals 151,344 square feet across seven states. Its acquisition cost was $35.9 million when the properties were acquired between October 2014 and February 2015. ExchangeRight estimates that the total returns were over 136% for investors selecting the 1031 or cash out options and for 721 investors, the return was over 146%, based on an independent valuation of the portfolio performed by KPMG.
The portfolio’s average annual rate of return for cash and 1031 exchange investors was 7.69%, higher than the company’s initial projections, it also said. For 721 exchange investors who received operating units in the aggregated portfolio, the average annual returns were equivalent to 9.99%, 35.91% higher than the company’s initial projections, given the net asset value of the combined portfolio based on KPMG’s valuation.