Overview
A leveraged, diversified portfolio of six single-tenant net-leased properties (11.8-year WALT) acquired in early 2026 across six states, sponsored by ExchangeRight Real Estate, LLC. The portfolio spans retail, logistics, and healthcare necessity-based tenants: a FedEx distribution facility (303,596 SF, Little Rock AR, ~46% of NOI, to 2036), a Hobby Lobby (54,640 SF, East Hanover NJ, to 2036), a BioLife Plasma Services center (Takeda/Baxalta-guaranteed; Takeda S&P BBB+; Burleson TX, to 2039), two Dollar General stores (S&P BBB; Adrian MI and Strongsville OH, to 2041), and a Tractor Supply (S&P BBB; Villa Rica GA, to 2046). Five of the six tenants are investment-grade-rated. The properties were acquired for an aggregate $74.2M; total capitalization is $84,900,000 ($47,570,000 equity + $37,330,000 non-recourse debt; 43.97% LTV). Financing is a $37.33M Wells Fargo loan, 5.120% fixed, interest-only for a 5-year term (closed April 2026), non-recourse, prepayable without penalty in the final six months. Going-in cash flow is 5.00%, escalating to 5.62% by year 5 (~5.30% average); Year 1 DSCR is 2.32x. The exit is ExchangeRight's REIT aggregation: the Essential Income REIT is targeted to acquire the DST interests (with an optional Section 721 exchange, cash-out, or combination) around the 5-year loan maturity.
Highlights
Six single-tenant assets across six states, five industries, and five tenant brands, with five of six tenants investment-grade-rated (Takeda/BioLife BBB+, FedEx BBB, Dollar General BBB x2, Tractor Supply BBB; Hobby Lobby private), spanning retail, logistics, and healthcare necessity-based uses - a genuinely diversified footprint by geography and sector.
The 303,596 SF FedEx distribution facility in Little Rock AR is the largest asset at ~46% of NOI, a long-haul logistics box leased to an investment-grade credit through 2036 - a meaningful credit anchor that simultaneously concentrates nearly half of portfolio income in one tenant and one specialized asset.
An 11.8-year weighted-average lease term with staggered expirations (FedEx/Hobby Lobby 2036, BioLife 2039, Dollar General 2041, Tractor Supply 2046) underpins durable contractual income well beyond the 5-year loan/hold. Income growth is modest and contractual, lifting cash-on-cash from 5.00% to 5.62%.
A $37.33M Wells Fargo (unaffiliated lender) non-recourse loan at 43.97% LTV, fixed at 5.120% and interest-only for the 5-year term, generates positive leverage and a healthy 2.32x Year 1 DSCR. The full principal balloons at the 2031 maturity (a 5-year refinancing/exit wall), and a 1.40x DSCR cash-trap covenant could suspend distributions if NOI falls.
Total upfront load is ~9.36% of equity (7.12% selling/offering plus a 1.24% acquisition fee and a 1.00% reallowance), and the offering feeds ExchangeRight's Essential Income REIT, targeted to acquire the DST interests around the 5-year loan maturity via an optional Section 721 exchange, cash-out, or combination.
Analysis
Insights
ExchangeRight Net-Leased Portfolio 75 is a moderately leveraged, income-oriented core net-lease vehicle, distinct from the sponsor's debt-free All-Cash series: a $37.33M Wells Fargo non-recourse loan at 43.97% LTV (5.120% fixed, interest-only) generates positive leverage on a diversified, mostly investment-grade tenant pool, lifting cash-on-cash from 5.00% to 5.62% (~5.30% average) with a healthy 2.32x Year 1 DSCR. The portfolio is genuinely diversified by geography (six states) and industry (retail, logistics, healthcare), but income concentration is real: FedEx alone is ~46% of NOI and the top two tenants ~68%, so the diversified label overstates the cash-flow dispersion. The defining structural features are the 5-year interest-only loan (which sets both the forecast horizon and a near-term refinancing/exit wall at 2031, with a 1.40x DSCR cash-trap) and ExchangeRight's REIT aggregation model, under which the likely terminal path is a Section 721 roll-up into the non-traded Essential Income REIT rather than a third-party sale. The 11.8-year WALT supports residual value well beyond the hold and the credit profile is strong, but the dominant sensitivities are FedEx renewal and credit, refinancing conditions at the 5-year maturity, the exit pricing, and the timing/terms of the REIT aggregation. The comparatively low ~9.36% load and unaffiliated Wells Fargo financing are favorable relative to higher-fee, affiliated-lender DSTs. No tax-equivalent yield is disclosed.
Advantages
A leveraged, diversified six-property single-tenant net-lease portfolio across six states and five industries (retail, logistics, healthcare), with an 11.8-year WALT and five of six tenants investment-grade-rated (Takeda/BioLife BBB+, FedEx BBB, Dollar General BBB, Tractor Supply BBB). Wells Fargo non-recourse financing at a conservative 43.97% LTV, fixed at 5.120% and interest-only, generates positive leverage and a healthy 2.32x Year 1 DSCR while lifting cash-on-cash from 5.00% to 5.62% (~5.30% average) over the 5-year forecast. The total load is comparatively low at ~9.36%, the lender is an unaffiliated third party (Wells Fargo), and the offering provides a defined exit through ExchangeRight's REIT aggregation with an optional Section 721 tax-deferred rollover into the Essential Income REIT.
Concerns
Despite the diversified branding, income is concentrated in the FedEx distribution facility at ~46% of NOI on a single specialized logistics asset expiring 2036, so FedEx renewal/credit is materially binary to portfolio cash flow; the top two tenants (FedEx, Hobby Lobby) are ~68% of NOI. The Wells Fargo loan is interest-only with the full $37.33M ballooning at the 5-year (2031) maturity, a near-term refinancing/exit wall in an uncertain rate environment, with a 1.40x DSCR cash-trap covenant. Going-in cash flow is modest at 5.00% with only ~0.62% of cumulative escalation over the five-year forecast, and the leases sit with operating subsidiaries/store entities rather than rated parents (Hobby Lobby is private and unrated). The targeted REIT-aggregation/721 exit is not guaranteed and depends on the ExchangeRight Essential Income REIT's capital availability; any 721 consideration would be units in a non-traded, sponsor-controlled REIT operating partnership with sponsor-set NAV and limited liquidity. The master tenant and manager are sponsor affiliates, and the Sponsor's affiliated short-term equity-financing/bridge arrangement is repaid from offering proceeds.
