ExchangeRight Essential Income 9 DST Overview
ExchangeRight Essential Income 9 DST is a Regulation D, Rule 506(c) private placement offering accredited investors beneficial interests in a Delaware Statutory Trust that owns a diversified, debt-free portfolio of three single-tenant, net-leased properties. Formed on January 5, 2026 and sponsored by ExchangeRight Real Estate, LLC of Pasadena, California, the Trust acquired the properties for an aggregate purchase price of approximately $46.6 million and is offering 100 Class 1 interests at $528,500 each, for a maximum offering of $52,850,000 funded entirely with investor equity and no mortgage financing. The minimum investment is 0.18921% (approximately $100,000 of equity). The portfolio totals 205,857 square feet and is 100% occupied: a 164,845-square-foot Pepsi Bottling Ventures distribution facility in Longs, South Carolina (the Myrtle Beach-Conway market) and two Tractor Supply Company stores in Dalton, Georgia and Ruckersville, Virginia. Each tenant carries an investment-grade profile, with Pepsi Bottling Ventures backed by a joint venture of Suntory (S&P BBB+) and PepsiCo (S&P A+) and Tractor Supply rated BBB by S&P. The Trust leases all three properties to an affiliated master tenant, Essential Income 9 Master Lessee, LLC, under a 20-year master lease guaranteed by the ExchangeRight Income Fund Operating Partnership, supporting a targeted current distribution of 5.35% paid monthly. The business plan targets a roughly two-year hold, after which the sponsor intends to offer investors a tax-deferred 721 exchange of their interests for Operating Partnership units in the ExchangeRight Essential Income REIT, a diversified vehicle invested in 357 net-leased properties across 35 states leased to 40 primarily investment-grade, recession-resilient tenants. The offering suits 1031 exchange investors and other accredited investors seeking passive, tax-deferred current income, capital preservation, and an eventual pathway into a larger institutional REIT, who can accept illiquidity and the absence of day-to-day control.
Highlights
The portfolio spans three separate markets across the Southeast and Mid-Atlantic, providing geographic diversification over South Carolina, Georgia, and Virginia rather than concentration in a single metro. The anchor asset, a Pepsi Bottling Ventures distribution facility, sits in Longs, South Carolina within the Myrtle Beach-Conway market, one of the faster-growing coastal regions in the Southeast, where its 164,845-square-foot footprint serves regional beverage distribution demand. The two Tractor Supply stores are located in Dalton, Georgia, an established manufacturing and commercial hub in northwest Georgia, and Ruckersville, Virginia, a growing exurban community north of Charlottesville. Consistent with its stated strategy, ExchangeRight selects locations based on the resilience of the underlying tenant business and the necessity-based nature of the goods and services provided rather than speculative appreciation. All three sites are net-leased to tenants operating in historically recession-resilient industries, namely consumer beverages and farm, ranch, and rural retail supply, that have demonstrated durable demand through multiple economic cycles.
The three properties are 100% occupied under long-term net leases with staggered expirations extending to 2039, 2045, and 2046, producing a long weighted-average remaining lease term. The 164,845-square-foot Pepsi Bottling Ventures facility in Longs, SC generates first-year NOI of approximately $1,980,751 (inclusive of a seller rent credit) with a lease running through February 2039 and four five-year renewal options. The Dalton, GA Tractor Supply store (21,909 square feet) produces $483,000 of first-year NOI through September 2045, and the Ruckersville, VA store (19,103 square feet) produces $381,940 through February 2046; both Tractor Supply leases feature 5% rent escalations every five years plus additional five-year renewal options. Each tenant is investment grade: Pepsi Bottling Ventures is a joint venture of Suntory (S&P BBB+) and PepsiCo (S&P A+), while Tractor Supply Company is rated BBB by S&P and operated 2,502 stores generating $14.88 billion of revenue in 2024. Blending an industrial beverage-distribution asset with two necessity-retail stores combines single-tenant credit stability with essential-business durability.
A distinguishing feature of Essential Income 9 is that it is structured entirely as an all-cash, debt-free offering. The Trust owns the three properties free and clear, funding the acquisition with 100% investor equity, $52,850,000 across 100 Class 1 interests at $528,500 each, rather than mortgage leverage. This eliminates the refinancing, balloon-maturity, cash-sweep, and lender-foreclosure risks that accompany leveraged DSTs, and removes the possibility that a lender could take title following a default. Because there is no loan, investor distributions are not burdened by debt service, and the Trust is not subject to lender-controlled reserves or loan-document transfer restrictions. The Sources and Uses reflect total owner equity of $52,850,000, of which roughly 91.3% is applied to total acquisition cost, with a 1.72% acquisition fee, a 0.60% reserve for taxes, insurance, operations, and asset management, and 6.09% in selling commissions and offering expenses. For 1031 investors, an all-cash structure means no debt replacement is required to balance the exchange, which simplifies the transaction for those exchanging out of unleveraged relinquished property and reduces overall risk in a higher-interest-rate environment.
ExchangeRight Real Estate, LLC and its affiliates operate a vertically integrated net-lease platform with more than $7.1 billion in assets under management, diversified across over 1,400 properties and 27 million square feet in 47 states as of January 31, 2026, on behalf of more than 9,000 investments. The firm is led by Key Principals Joshua Ungerecht, David Fisher, and Warren Thomas and is headquartered in Pasadena, California. According to the PPM, ExchangeRight has taken 22 DST offerings full cycle, and 100% of its full-cycle offerings have met or exceeded both their cash-flow and total-return projections, with a five-year average investor cash flow of 5.74% and 163 consecutive months of meeting or exceeding investor cash-flow projections since inception. Full-cycle net-leased DST returns have averaged 7.40% to 8.87% annually for 1031/cash investors and 8.43% to 10.01% for 721 investors. ExchangeRight is the sole member of the Manager, the Master Lessee, and the Property Manager, so a single organization controls acquisition, asset management, and the master lease, an alignment that also concentrates investor reliance on that one sponsor. Past performance does not guarantee future results.
The offering is engineered to serve investors completing a 1031 like-kind exchange. Beneficial interests in the Delaware Statutory Trust are intended to qualify as replacement property under Code Section 1031, allowing investors to defer capital gains from the sale of relinquished real estate while stepping into a passive, professionally managed portfolio. Tax counsel Venable LLP delivered an opinion supporting the Trust's treatment as an investment trust and the master lease as a true lease. The defining feature is the intended exit: after a targeted two-year hold (no earlier than the second anniversary of the Offering Termination Date), the ExchangeRight Essential Income REIT intends to offer investors a tax-deferred 721 exchange of their DST interests for Operating Partnership units in the REIT, a Transfer Distribution that under current law should not be subject to federal income tax under Code Section 721. That step provides access to a diversified 357-property REIT, monthly income, potential quarterly redemptions, an optional dividend reinvestment program, and a retained step-up in basis for heirs. Investors continue to defer gain, gain broader diversification, and obtain greater potential liquidity than a single-asset DST, though the 721 exchange is not guaranteed and remains subject to REIT discretion and future tax law.
Analysis of ExchangeRight Essential Income 9 DST
Insights
Essential Income 9 is best understood as a conservative income-and-defer vehicle rather than a growth play: a bond-like wrapper around investment-grade net-lease credit, sold with a built-in option to roll into a larger REIT. It fits a narrow 1031 investor, one exiting appreciated real estate who wants passive, predictable monthly income, is comfortable with indefinite illiquidity, and is drawn to ExchangeRight's two-step DST-to-REIT aggregation strategy. The risk/return profile is deliberately muted: a 5.35% current distribution, fully debt-free, backed by Pepsi Bottling Ventures (Suntory/PepsiCo, BBB+/A+) and Tractor Supply (BBB) under a 20-year master-lease guaranty. On the numbers that yield only meets the net-lease market, screening "Meets Average" on both average income (5.35% against a roughly 5.11% peer average) and peak yield, while growth is thin: 5% escalators every five years on the Tractor Supply stores, near 1% a year versus a roughly 7.5% peer growth benchmark and well behind inflation. Investors here are not paid extra for the credit; they pay up for safety. What distinguishes the income is coverage quality: with no leverage and a Year-1 payout ratio near 1.01, the 5.35% is funded almost entirely by in-place property NOI rather than by financing or reserve draws, a healthier coverage profile than leveraged DSTs that manufacture higher headline yields on borrowed cash. The trade is the mirror image, because with no debt the downside is cushioned (no lender can foreclose, no balloon to refinance) but the upside is capped, as unlevered net-lease yields do not compound the way a leveraged deal's equity can. The single variable that governs the outcome is tenant concentration: the Pepsi Bottling Ventures facility drives roughly 70% of portfolio NOI, so despite three properties in three states this is closer to a single-tenant credit bet with two small stores attached than a diversified pool. PBV's lease running to 2039 and the Suntory/PepsiCo credit behind it are the load-bearing element of the deal, and that, not the headline diversification, is what to underwrite. On pricing, the roughly $46.6 million property basis against the $52.85 million raise is about a 13% markup, embedding a total load near 8% (6.09% in commissions and offering costs plus a 1.72% acquisition fee) with the balance to reserves, moderate for a syndicated DST, but the investor still pays above the underlying real estate value, and the credit tenancy is what justifies that friction. The realistic thesis rests on the 721 exit: the sponsor's edge is that 100% of its 22 full-cycle offerings have met or exceeded projections, with 721 full-cycle returns averaging 8.43% to 10.01%, but that exchange is discretionary, roughly two years out, and contingent on the REIT's health, its capacity to fund redemptions, and continuity of Section 721 treatment. Prospective buyers should underwrite the base case in which the 721 never happens, holding an unlevered three-property DST to a straight sale, and confirm they are comfortable owning that. One further caution: portions of the PPM's risk-factor, market, and financing language read as generic template text describing a leveraged apartment deal and do not match this all-cash net-lease offering, so weight the verified terms and independent tax and legal counsel over the boilerplate. Essential Income 9 suits capital-preservation-minded exchangers who value credit quality, balance-sheet safety, and optionality into a bigger REIT over current cash flow, including retirees and estate-planning holders leaning on the step-up for heirs. Investors chasing maximum yield, meaningful appreciation, or real diversification should pass; on a yield-per-unit-of-risk basis, leveraged DSTs and even the REIT itself offer more, and this deal's appeal is safety and the 721 option, not the size of the coupon.
Advantages
Debt-free structure: The Trust owns all three properties free and clear with 100% equity, eliminating mortgage, refinancing, balloon-maturity, cash-sweep, and lender-foreclosure risk and simplifying the exchange for 1031 investors with unleveraged relinquished property. Investment-grade, recession-resilient tenancy: The portfolio is 100% leased to Pepsi Bottling Ventures (a Suntory/PepsiCo joint venture, S&P BBB+/A+) and Tractor Supply Company (S&P BBB), businesses in beverage distribution and farm and rural retail that have historically performed through economic cycles. Long lease duration with escalations: Leases extend to 2039, 2045, and 2046 with multiple five-year renewal options and 5% rent bumps every five years on the Tractor Supply assets, supporting durable income and modest growth. Credit-backed master lease: A 20-year master lease guaranteed by the ExchangeRight Income Fund Operating Partnership supports the targeted 5.35% current distribution, paid monthly. Defined 721 exit into an institutional REIT: The targeted two-year hold and tax-deferred 721 exchange offer a pathway into the ExchangeRight Essential Income REIT (357 properties across 35 states leased to 40 primarily investment-grade tenants), providing greater diversification, potential liquidity through quarterly redemptions, and continued tax deferral. Passive, turnkey 1031 solution: Investors avoid active management, with the sponsor handling acquisition, asset management, and leasing, and can participate from a $100,000 minimum. Sponsor track record: ExchangeRight reports that 100% of its 22 full-cycle DST offerings have met or exceeded cash-flow and return projections, with 163 consecutive months of meeting or exceeding investor cash-flow targets.
Concerns
Illiquidity and no secondary market: The interests are unregistered, have no public market, and carry no redemption rights; investors must hold for an indefinite period and cannot readily liquidate in an emergency. No control or voting rights: All decisions rest with the Trust Manager. Holders have no voting rights (including over a sale), do not hold legal title, cannot partition the property, and must entrust all management to the sponsor and its affiliates. Single-purpose, concentrated portfolio: The Trust owns only three properties and will acquire no others, so returns depend entirely on this small pool. The Pepsi Bottling Ventures asset alone generates roughly 70% of portfolio NOI, creating significant single-tenant concentration; the loss, bankruptcy, or non-renewal of any tenant would materially affect distributions. DST rigidity and Springing LLC risk: The Trust is a passive, inflexible vehicle that cannot renegotiate leases, raise new capital, or take many business actions. Certain events, such as master tenant default or insolvency, can force conversion to a Springing LLC, causing holders to lose the ability to complete a Code Section 1031 exchange. Reliance on the master lease and an affiliated master tenant: Distributions depend on rent from a newly formed, affiliated master tenant and the Operating Partnership guaranty; the master lease is not a triple-net lease, so the Trust bears certain Trust Obligations, and projections rely on reserves funded from offering proceeds. Fees and load: Selling commissions and offering expenses total about 6.09%, plus a 1.72% acquisition fee, and the $52.85 million offering price exceeds the roughly $46.6 million property purchase price, so a meaningful portion of equity funds costs, fees, and reserves rather than real estate. 721 exit not guaranteed: The targeted two-year hold and 721 exchange are objectives, not commitments, and are subject to REIT discretion, market conditions, timing, and future tax law. Conflicts of interest and tax risk: The sponsor controls the Manager, Master Lessee, and Property Manager, and agreements are not arm's-length; tax outcomes (1031 qualification, true-lease characterization, 721 deferral, and potential taxable boot) carry risk and are not guaranteed.
ExchangeRight Essential Income 9 DST — Complete Offering Data
Offering & Structure
Investment NameExchangeRight Essential Income 9 DST
SponsorExchangeRight
StructureDelaware Statutory Trust (DST)
Offering Type506(b)
StatusClosed
Last Updated2026-07-17
Size & Availability
Total Offering$52,850,000
Equity$52,850,000
DebtAll-Cash
Available Equity$0 (0% of equity)
Minimum Investment$100,000
Total Load8.06%
Initial Reserves0.60%
Property
Property TypeNet Lease
StrategyCore
LocationGA, SC, VA
Market TierTier 3
Income & Projections
Average Yield5.35%
Projected Yields (Y1–Y10)Y1 5.35% · Y2 5.35%
Tax-Adjusted Yield7.00%
Cap Rate Equivalent7.96%
Year 1 NOI$2,845,691
Y1 Payout Ratio1.01
Financing
In-Place LTV0.00% LTV
Exit
Estimated Hold Period2 years
721 Exchange ExitMandatory
Benchmarks (vs sector median)
Avg. Income5.35% vs 5.08% market — Meets Average
Growth0.00% vs 7.44% market
Peak5.35% vs 5.31% market — Meets Average
Every data point Baker 1031 tracks for this offering, in one place. Figures are drawn from the offering’s private placement memorandum and sponsor materials unless noted, are summaries for convenience only, and are qualified in their entirety by the PPM. Tap the ⓘ icon next to any label for what it means and how it is calculated.
