ExchangeRight Net-Leased All-Cash 21 DST Overview
ExchangeRight Net-Leased All-Cash 21 DST is a debt-free (all-cash) Regulation D, Rule 506(b) offering of up to $43,390,000 in Class 1 beneficial interests (100 interests at $433,900 each) in a Delaware statutory trust sponsored by ExchangeRight Real Estate. The trust owns a diversified portfolio of six single-tenant, net-leased retail and healthcare properties leased to national, historically recession-resilient tenants: Lowe's (Milford, MA), Hobby Lobby (Midwest City, OK), Novant Health (three locations in Myrtle Beach, Summerville, and Sumter, SC), and Dollar Tree (Ocala, FL). Lowe's and Dollar Tree carry investment-grade S&P credit ratings (BBB+ and BBB, respectively), Novant Health's revenue bonds are rated A+, and Hobby Lobby is one of the largest privately held U.S. companies. The portfolio is backed by a 20-year master lease guaranteed by the ExchangeRight Essential Income Operating Partnership, providing stable in-place lease revenue with a 9.1-year weighted-average remaining lease term and a 5.05% current cash flow. Because the offering carries no mortgage debt, it eliminates lender and refinancing risk and suits conservative 1031 exchangers seeking passive, durable income without leverage, as well as cash investors. The minimum investment is $100,000 (a 0.23047% interest). The exit strategy is built around ExchangeRight's REIT aggregation platform, targeting a future Section 721 UPREIT roll-up into the ExchangeRight Essential Income REIT, with alternatives including a subsequent 1031 exchange, a tax-deferred cash-out financing, or a taxable cash-out.
Highlights
A defining feature of Net-Leased All-Cash 21 is that it is entirely debt-free. With no mortgage on the portfolio, the offering carries no loan-to-value leverage, no lender cash-management or cash-sweep provisions, and no balloon maturity or refinancing risk that could force a sale or reduce distributions. For a 1031 exchanger, an all-cash DST can satisfy the equity side of a replacement without taking on new debt, and it removes the single largest source of downside in a leveraged net-lease deal — an inability to refinance at maturity. The tradeoff is that all-cash structures forgo the potential yield enhancement that positive-leverage financing can provide, so the 5.05% current cash flow reflects unlevered, in-place lease income rather than a debt-boosted return.
The portfolio's income is anchored by nationally recognized, necessity-based tenants. Lowe's, which represents approximately 51.68% of net operating income, is S&P-rated investment grade (BBB+ long-term); Novant Health (about 20.91% of NOI) carries A+ rated revenue bonds; and Dollar Tree (about 5.52% of NOI) is investment grade (BBB). Hobby Lobby (about 21.89% of NOI) is one of the largest privately held companies in the U.S. — ranked 70th on the 2025 Forbes list, with 1,000+ stores and roughly 50,000 employees. Concentrating the rent roll in investment-grade and creditworthy retailers plus a healthcare provider in recession-resilient, necessity-based industries is intended to make the in-place lease revenue more durable across economic cycles than income backed by discretionary or speculative-grade tenants.
The six properties are backed by a 20-year master lease (expiring 7/31/2046) guaranteed by the ExchangeRight Essential Income Operating Partnership, which reports a Year-1 master lease rent of approximately $2,283,202 and an inception-to-date AFFO coverage of 103.31% through 3/31/26 across a 436-property, 44-tenant guarantor pool spanning 333 markets. The master lease structure is intended to smooth and stabilize distributions to DST owners by drawing on a broad, diversified income base rather than the six properties alone. The trust targets estimated annualized cash flow beginning at 5.05% in year one and stepping up gradually to 5.40% by year ten, paid as monthly distributions — though all distributions depend on actual income earned by the trust and are not guaranteed.
ExchangeRight is a vertically integrated net-lease sponsor with more than $7.5 billion in assets under management across 1,400+ properties, 98 primarily investment-grade tenants, and 19 necessity-based industries in 47 states (as of 6/30/26). The firm reports a track record across 34 full-cycle offerings of an 8.60% average annual total return, more than $2.5 billion of distributions, capital, and gains returned to investors inception-to-date, and 100% of its offerings meeting or exceeding their cash-flow projections. ExchangeRight handles underwriting, financing, asset and property management, and dispositions in-house, and its aggregation strategy aims to grow AUM to $10+ billion within three years. Past performance of the sponsor does not guarantee future results.
The interests are structured as replacement property for a Section 1031 exchange, allowing accredited investors to defer capital gains while owning fractional interests in institutional net-leased real estate. The exit strategy is built around ExchangeRight's REIT platform: it targets a future Section 721 UPREIT contribution of the DST interests into the ExchangeRight Essential Income REIT in exchange for operating-partnership units, preserving tax deferral, with alternative paths including another 1031 exchange, a tax-deferred cash-out financing targeting roughly 20% of investment value, or a taxable cash-out. Investors should note that electing a Section 721 exchange generally ends the ability to complete a future 1031 exchange, and all exit options depend on the ExchangeRight REIT's capital availability and are not guaranteed.
Analysis of ExchangeRight Net-Leased All-Cash 21 DST
Insights
For a 1031 exchanger, Net-Leased All-Cash 21 is a conservative, income-first bond-proxy — credit-tenant rent owned free and clear — not a growth play. Its appeal is the debt-free structure: with no mortgage, the interest-rate, refinancing, and lender-cash-sweep risks that sink leveraged net-lease DSTs simply don't apply, and an exchanger can replace equity without adding debt. The price of that safety is yield and cost. Unlevered in-place income produces only a 5.05% starting distribution rising to 5.40% by year ten, and against the net-lease market its income, peak yield, and growth all screen as Meets Average — priced squarely at the benchmark, not discounted for the six-asset concentration. Layered on that is a heavy ~9.2% load (near 11.6% with reserves) on an offering price the PPM expressly expects to exceed third-party appraised value, so the real estate must appreciate simply to return principal. And the year-one payout modestly exceeds in-place NOI (a ~1.05 payout ratio), so early distributions lean partly on reserves rather than being fully earned by the rent roll. The outcome hinges on tenant credit and the master-lease guarantor. The rent roll is high quality (investment-grade Lowe's and Dollar Tree, A+ Novant bonds, a large private Hobby Lobby) but concentrated — Lowe's alone is roughly half of NOI — so a single big-box vacancy or non-renewal is the variable to watch, especially as leases roll (Lowe's 1/16/2035, Novant 12/31/2035, Hobby Lobby and Dollar Tree in 2036). The 20-year master lease and ExchangeRight's 436-property guarantor pool (103.31% AFFO coverage inception-to-date) buffer that concentration, but owners ultimately rely on the guarantor's continued strength. The exit is engineered for an optional Section 721 roll-up into ExchangeRight's Essential Income REIT — a credible route to continued deferral and monthly income, but it swaps direct real estate for REIT units, ends future 1031 eligibility, and depends on the REIT's capital availability. Tellingly, the sponsor's full-cycle record has averaged roughly a 1.4x equity multiple over about five-year holds with 100% of offerings meeting or exceeding cash-flow projections — returns earned mainly from income, not appreciation, which is what to expect here rather than exit upside. Net, this fits an investor who wants capital preservation, no-leverage stability, and credit-tenant income with a REIT-continuation exit and can live with a full-market price and heavy load; it is wrong for anyone reaching for yield, liquidity, real diversification beyond six assets, or control.
Advantages
Net-Leased All-Cash 21 pairs a debt-free capital structure with a diversified, credit-anchored net-lease portfolio and an experienced sponsor. Because there is no mortgage, the offering carries no refinancing or lender-cash-sweep risk and can satisfy a 1031 exchanger's equity requirement without adding leverage. Income is anchored by national, necessity-based tenants — Lowe's (~51.68% of NOI, S&P BBB+), Novant Health (~20.91%, A+ rated bonds), Hobby Lobby (~21.89%), and Dollar Tree (~5.52%, BBB) — diversified across four states and two sectors (necessity retail and healthcare), with a 9.1-year weighted-average lease term and a 20-year master lease guaranteed by ExchangeRight's Essential Income Operating Partnership. The trust targets a 5.05% current cash flow rising to 5.40% by year ten, paid monthly. ExchangeRight's platform ($7.5B+ AUM, 34 full-cycle offerings, 100% meeting or exceeding cash-flow projections, 8.60% average annual total return) provides institutional underwriting and a clear REIT-aggregation exit that targets continued tax deferral through a Section 721 roll-up. A low $100,000 minimum and fully passive ownership round out the profile for a conservative, income-oriented exchanger.
Concerns
Purchase price above appraised value: the $43,390,000 offering price is expressly anticipated to exceed the properties' third-party appraised value (appraisals were due on or about August 7, 2026), and the PPM warns that on a near-term sale proceeds could be "significantly lower" than an investor's investment — the six-property portfolio must appreciate simply to return principal. A total load of roughly 9.2% in fees and commissions (about 11.6% including reserves) sits between invested equity and underlying real-estate value, and the Sponsor and its affiliates receive substantial compensation, including repayment of ~$1.22M of short-term equity financing and redemption of the Sponsor's Class 2 interests out of Offering proceeds. Income is concentrated: Lowe's alone is ~51.68% of net operating income, so a single big-box vacancy or non-renewal would materially cut distributions, and Hobby Lobby (~21.89% of NOI) is privately held and unrated. Distributions run through a master lease whose lessee has limited assets — the PPM states that if the underlying tenants fail to pay, it is "even likely" the Master Lessee defaults on the Master Lease — so owners ultimately depend on the strength of the ExchangeRight Essential Income Operating Partnership guarantor pool rather than the six properties alone. Leases roll within a narrow window (Lowe's 1/16/2035, Novant 12/31/2035, Hobby Lobby and Dollar Tree in 2036), and as a DST the trust cannot actively re-lease, renegotiate leases, or raise new capital under Revenue Procedure 2002-22 constraints. The all-cash structure caps the current yield at a modest 5.05% start (below what positive leverage could target), so total return leans on the exit — which is not guaranteed and depends on the ExchangeRight REIT's capital availability; electing the targeted Section 721 roll-up would end the owner's ability to complete a future 1031 exchange. Several properties, including Ocala, FL, carry hurricane, flood, and tornado exposure, and the Manager does not intend to carry flood or earthquake insurance on all of them, so a catastrophic loss could exceed coverage. Finally, the interests are illiquid with no public market and no redemption rights (an indefinite hold), owners have no control and the Manager owes only limited fiduciary duties (liability generally only for willful misconduct, bad faith, fraud, or gross negligence), distributions are not guaranteed and may be funded from reserves, and favorable 1031/DST tax treatment relies on assumptions the IRS could challenge — including that reserves of roughly $10,322 per interest could be treated as taxable cash boot.
ExchangeRight Net-Leased All-Cash 21 DST — Complete Offering Data
Offering & Structure
Investment NameExchangeRight Net-Leased All-Cash 21 DST
SponsorExchangeRight
StructureDelaware Statutory Trust (DST)
Offering Type506(b)
StatusAvailable
Last Updated2026-07-31
Size & Availability
Total Offering$43,390,000
Equity$43,390,000
DebtAll-Cash
Available Equity$43,390,000 (100% of equity)
Minimum Investment$100,000
Total Load9.21%
Property
Property TypeNet Lease
StrategyCore
LocationFL, MA, OK, SC
Income & Projections
Average Yield5.20%
Projected Yields (Y1–Y10)Y1 5.05% · Y2 5.08% · Y3 5.08% · Y4 5.16% · Y5 5.22% · Y6 5.23% · Y7 5.23% · Y8 5.23% · Y9 5.30% · Y10 5.40%
Tax-Adjusted Yield11.89%
Cap Rate Equivalent7.65%
Year 1 NOI$2,293,203
Y1 Payout Ratio1.05
Financing
In-Place LTV0.00% LTV
Exit
Estimated Hold Period5-7 Years
721 Exchange ExitOptional
Connected REITExchangeRight Essential Income REIT
Benchmarks (vs sector median)
Avg. Income5.20% vs 5.11% market — Meets Average
Growth6.93% vs 7.52% market — Meets Average
Peak5.40% vs 5.34% 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.
