PASADENA, Calif., July 15,
2024 /PRNewswire/ -- ExchangeRight, one of the
nation's leading providers of diversified real estate DST and REIT
investments, has announced that the Essential Income REIT was the
only growth or stabilizing equity non-traded REIT ("NTR") that
fully covered its distributions with Adjusted Funds from Operations
("AFFO") or Modified Funds from Operations ("MFFO") in the first
quarter, as reported in Blue Vault's Non-traded REIT
Industry Review for Q1 2024.
Per the report, ExchangeRight's REIT was also one of only
four NTRs that were ranked in the top "Operating Performance"
category, as measured by the 12-month average return on assets and
the positive impact of favorable financing in elevating investor
returns.
Blue Vault's Report on the Essential Income REIT
- Increased NAV/Share: From Q4 2023 to Q1 2024, the
Essential Income REIT performed exceptionally well, as one of only
three comparable NTRs that experienced an increase in Net Asset
Value ("NAV") per share. As of March 31,
2024, the REIT's NAV was increased to $27.14 per share.
- Healthy Debt Service Coverage: In Q1 2024, the
Essential Income REIT was one of only five comparable NTRs with an
interest coverage ratio greater than 2.0 times, representing its
ability to pay down financing costs without negatively impacting
investors. For the trailing 12 months ended March 31, 2024, the REIT featured a 2.56 times
Cash Interest Coverage Ratio.
- Minimal Redemptions: In Q1 2024, the Essential
Income REIT was one of only three comparable NTRs with redemptions
less than 1.50% of weighted average shares/units outstanding. In
contrast, the other 11 NTRs compared saw average redemptions of
3.98%, more than 2.65 times the rate that ExchangeRight's REIT
experienced.
The past performance of the REIT is not an assurance of future
results. All comparative claims about growth or stabilizing equity
non-traded REITs are based on Blue Vault's Q1 2024 Non-traded REIT
Industry Review, Non-Traded REIT Fee Study (4th ed.), pp.
50-84.
Joshua Ungerecht, a managing
partner at ExchangeRight, shared that Blue Vault's latest industry
review provides third-party confirmation of the Essential Income
REIT's strong fundamentals and favorable market position.
"Blue Vault's report confirms that the Essential
Income REIT has been distinct in its ability to pay
distributions from actual operating performance, as measured by
AFFO and MFFO," said Ungerecht. "Rather than paying any portion of
investors' distributions out of investor equity or debt proceeds,
our REIT's distributions have been, and are required to be, fully
covered by actual operating cash flows of the REIT. This includes
covering all dividends reinvested during the period by investors
participating in our REIT's dividend reinvestment program. The
REIT's performance is rooted in historically recession-resilient
and primarily investment-grade tenants, which successfully operate
in necessity-based industries. Investors deserve to know that their
income can be generated by operations without eroding their capital
or increasing their debt, and we are gratified to have Blue Vault's
third-party report attest to the fact that our REIT is a top
performer and well positioned as we steward wealth on behalf of
investors, representatives, and advisors whom we serve."
About ExchangeRight's Essential Income REIT
The Essential Income REIT, a Maryland statutory trust, is a
self-administered real estate company, formed on January 11, 2019. The REIT is available to
accredited investors only and focuses on investing in
single-tenant, primarily investment-grade net-leased real estate.
The REIT currently pays an annualized distribution rate on new
investments of 6.41% for its Class I shares and 6.02% for its Class
A shares, and targets 6.00% monthly tax-efficient income with a 10%
total annual internal rate of return for its Class ER shares. The
REIT has fully covered its dividend with Adjusted Funds from
Operations since its inception and through its most recently
reported period. The Company, through its operating partnership,
ExchangeRight Income Fund Operating Partnership, LP, owns 353
properties in 34 states (collectively, the "Trust Properties") as
of June 30, 2024. The Trust
Properties are occupied by 36 different primarily national
investment-grade necessity-based retail tenants and are
additionally diversified by industry, geographic region, and lease
term. The Company has elected and is qualified to be taxed as a
real estate investment trust ("REIT") for U.S. federal income tax
purposes. Please visit the REIT's website to learn more about
its Class ER, Class A, and Class I shares.
The past performance of the REIT, its tenants, and
ExchangeRight does not guarantee future performance. The REIT is
available to accredited investors only. "Investment-grade" refers
to tenants whose long-term corporate debt rating is considered
investment grade by Standard & Poor's, Moody's, and/or Fitch.
An investment-grade rating is a rating that indicates that a
corporate bond has a relatively lower risk of default than a
corporate bond with a speculative grade. Adjusted Funds From
Operations (AFFO) as defined by NAREIT measures a real estate
company's recurring/normalized FFO after deducting recurring
capital improvement funding that is typically capitalized by REITs
and the adjustment to GAAP revenue related to "straight-line"
rents. There is no guarantee that the REIT's objectives will
continue to be achieved. The REIT is subject to the regular risks
associated with real estate. Please review the offering memorandum
to understand the REIT's business plan, risks, and potential
benefits.
Media Contact
Lindsey Thompson
Senior Media Relations Officer
lthompson@exchangeright.com
(626) 773-3448
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SOURCE ExchangeRight