Fifth Third Bank Joins Wells Fargo to Increase ExchangeRight REIT Credit Facility to $100M
ExchangeRight, a Pasadena-based provider of diversified real estate DST and REIT investments, announced that Fifth Third Bank has joined Wells Fargo as a co-lender on the Essential Income REIT’s revolving line of credit, bringing the existing credit capacity to $100 million.
The closing enhances the REIT’s credit availability, adding to the recently announced $75 million credit facility with Wells Fargo, which can be expanded to $400 million at the REIT’s request.
Expanding the Essential Income REIT’s credit facility gives ExchangeRight more influence over the REIT’s portfolio mix and financing strategy. In addition to increasing flexibility for the Essential Income REIT’s ongoing operations, the expansion allows the REIT to eventually take advantage of long-term fixed-rate corporate bonds to optimize its financing and boost the REIT’s potential Adjusted Funds from Operations.
“This recognition of the quality of ExchangeRight’s REIT platform by another large bank known for its rigorous analysis is a testament to the stability and value that our REIT has provided its investors through its diversification and focus on historically recession-resilient industries and tenants,” said Joshua Ungerecht, a managing partner at ExchangeRight.
The Essential Income REIT, a Maryland statutory trust, focuses on single-tenant, primarily investment-grade net-leased real estate. The REIT currently pays an annualized distribution rate on new investments of 6.38% for its Class I shares and 6% for its Class A shares, and targets 6% monthly tax-efficient income with a 10% total annual internal rate of return for its Class ER shares.
