ExchangeRight Fully Subscribes $22.6M Essential Income 3 DST
ExchangeRight has fully subscribed its $22.6 million Essential Income 3 DST, a portfolio designed to provide accredited investors with monthly income and a tax-efficient path to REIT ownership through a 721 exchange after a targeted two-year hold period. The offering is now closed and no longer accepting new investors.
Essential Income 3 DST consists of a diversified, net-leased portfolio backed primarily by investment-grade tenants in necessity-based industries. The seven-property, 67,374-square-foot portfolio spans Florida, Alabama, Nevada, and New Jersey, and is leased to AutoZone, Dollar General, Tractor Supply, Dollar Tree, and Truist Bank. Investors receive monthly distributions at a current annualized rate of 5.50%, supported entirely by in-place rents.
The offering is further strengthened by a 20-year master lease guarantee from the Essential Income REIT and its operating partnership, providing long-term stability and income coverage.
After approximately two years, the planned exit strategy enables DST investors to complete a tax-deferred 721 exchange into the Essential Income REIT. This transition is intended to provide pro rata access to the REIT’s broader diversification, monthly income, growth potential, improved liquidity features, and estate-planning advantages. The Essential Income REIT currently holds 361 properties across long-term net leases with 39 historically recession-resilient tenants.
“This offering, consistent with our Essential Income DST platform’s objective, is designed to efficiently transition investors into the Essential Income REIT upon exit, providing them with greater diversification, access to liquidity potential, and continued consistent monthly income backed by necessity-based tenants,” said Joshua Ungerecht, managing partner at ExchangeRight.
The successful close of Essential Income 3 DST adds to a recent series of fully subscribed ExchangeRight offerings, including the $25 million All-Cash 15, $28.85 million Essential Income 4 DST, $23.3 million Net-Leased All-Cash 14 DST, $41.4 million All-Cash 12, $62 million Portfolio 69, $111 million Portfolio 68, among others.
Pasadena-based ExchangeRight oversees more than $6.9 billion in assets under management, spanning over 1,400 properties and 27 million square feet across 48 states, supported by its vertically integrated real estate platform.