ExchangeRight Net-Leased Portfolio 76 DST Overview
ExchangeRight Net-Leased Portfolio 76 DST is a $75.48 million (total capitalization) Delaware Statutory Trust offering interests in a diversified portfolio of eight single-tenant, net-leased properties across five states (GA, LA, SC, OH, IL), leased to six national tenants operating in necessity-based retail and distribution industries. The roster is anchored by Interstate Batteries (42.86% of NOI, a 151,320 SF distribution facility in Columbus, OH leased through 2046) and BJ's Wholesale Club (30.51% of NOI, Fitch BBB, in Woodstock, GA through 2037), with Hobby Lobby, four Dollar General/Dollar General Market stores, and O'Reilly Auto Parts rounding out the portfolio. Several tenants carry investment-grade credit (BJ's, Dollar General, O'Reilly all rated BBB), and the portfolio has a 14.7-year weighted-average remaining lease term. The offering raises $42.78 million of equity against a $32.70 million non-recourse Bank of America loan (43.32% LTV) fixed at 5.640% and interest-only for its five-year term. Interests are intended to qualify as Section 1031 replacement property, and ExchangeRight targets a Section 721 exit into its Essential Income REIT (with 1031 or cash-out alternatives) generally before year five. Distributions are projected to begin at a 5.00% annualized cash-on-cash yield, stepping up to 5.33% by year five.
Highlights
The portfolio spans eight properties, six tenants, four industries, seven markets, and five states (GA, LA, SC, OH, IL), reducing dependence on any single asset, tenant, or geography. Income is diversified across necessity-based retail and distribution - warehouse-club (BJ's), craft retail (Hobby Lobby), discount retail (Dollar General and Dollar General Market), auto parts (O'Reilly), and battery distribution (Interstate Batteries) - industries ExchangeRight targets for their historical recession resilience.
Several tenants carry investment-grade credit: BJ's Wholesale Club (Fitch BBB long-term), Dollar General and Dollar General Market (S&P BBB long-term, A-2 short-term), and O'Reilly Auto Parts (S&P BBB long-term, A-2 short-term). The two largest income contributors are Interstate Batteries (42.86% of NOI; a privately held company founded in 1952 with an estimated $1.5B+ in annual revenue) and BJ's Wholesale Club (30.51% of NOI; NYSE: BJ, roughly $21.46B in fiscal-year revenue across ~263 clubs).
The portfolio carries a 14.7-year weighted-average remaining lease term with staggered expirations running from 2033 (O'Reilly, Chicago IL) out to 2046 (Interstate Batteries, Columbus OH), limiting near-term rollover risk. The anchor Interstate Batteries lease alone provides roughly two decades of contractual income at 151,320 SF, while the BJ's Wholesale Club lease (116,733 SF in Woodstock, GA) runs through 2037. Net leases place most operating responsibilities on the tenants.
The portfolio is financed with a $32.70 million non-recourse loan from Bank of America, N.A. (an unaffiliated, investment-grade lender) fixed at 5.640% and interest-only for its full five-year term, which closed on July 21, 2026. The interest-only structure maximizes distributable cash flow during the hold, and the 43.32% offering loan-to-value leaves meaningful equity cushion. Estimated annual debt service of approximately $1.87 million is covered roughly 2.26x by first-year portfolio net operating income.
The offering is sponsored by ExchangeRight, which stewards over $7.5 billion across 1,400+ properties and reports a 100% track record of its 34 full-cycle offerings meeting or exceeding cash-flow projections, with an 8.60% average annual total return. The DST is built for ExchangeRight's aggregation strategy: its targeted exit is a Section 721 exchange into the Essential Income REIT before year five, with Section 1031 exchange or cash-out alternatives. Total upfront load is approximately 9.5% of equity.
Analysis of ExchangeRight Net-Leased Portfolio 76 DST
Insights
ExchangeRight Net-Leased Portfolio 76 is a moderately leveraged, income-oriented net-lease vehicle whose appeal is diversification plus a defined REIT-aggregation exit rather than rent growth or opportunistic upside. The portfolio's defensive characteristics - necessity-based, largely investment-grade tenancy; a 14.7-year weighted-average lease term with staggered 2033-2046 expirations; and full-term fixed-rate, interest-only, non-recourse financing at a conservative 43.32% LTV - give it a stable, bond-like return profile with roughly 2.26x first-year debt-service coverage. The central return driver is the exit: ExchangeRight targets a Section 721 exchange into its Essential Income REIT before year five, which, if executed, converts the investment into REIT operating-partnership units and continued tax deferral; the projected 5.00%-to-5.33% distribution ramp is deliberately flat, so realized total return hinges on the REIT's valuation and capital availability at exit - neither of which Owners control. The principal sensitivities are therefore tenant concentration (Interstate Batteries and BJ's together ~73% of NOI, with Interstate Batteries privately held and unrated), the dependence of the liquidity thesis on the REIT's appetite and capital, and the five-year interest-only balloon that concentrates refinancing/sale risk at maturity with no interim principal amortization. Net, the offering suits 1031 investors seeking diversified, investment-grade-leaning net-lease income with a clear tax-deferred REIT exit path, provided they are comfortable with anchor-tenant concentration, minimal income growth, an upfront load near 9.5% of equity, and reliance on ExchangeRight's aggregation strategy for liquidity. ExchangeRight's 100% full-cycle track record of meeting or exceeding cash-flow projections across 34 offerings is a meaningful mitigant but not a guarantee.
Advantages
Broad diversification for a single offering - eight properties, six tenants, four industries, and five states - materially reduces single-asset and single-tenant concentration relative to a typical DST. Credit quality is solid: BJ's, Dollar General, and O'Reilly all carry investment-grade BBB ratings, and the two largest income sources (Interstate Batteries and BJ's, together ~73% of NOI) are large, established operators. A 14.7-year weighted-average lease term with staggered 2033-2046 expirations provides long, laddered contractual income with limited near-term rollover. Financing is conservative and clean: a 43.32% LTV, non-recourse Bank of America loan fixed at 5.640%, interest-only for the full five-year term, giving rate certainty and maximizing distributable cash, with ~2.26x first-year debt-service coverage. Distributions begin at 5.00% and step up to 5.33% by year five, and the ExchangeRight 721/Essential Income REIT exit offers a defined, tax-deferred liquidity path alongside 1031 and cash-out options, backed by a sponsor with a 100% full-cycle track record of meeting or exceeding projections.
Concerns
Despite the diversified branding, income is concentrated at the top: Interstate Batteries (42.86% of NOI) and BJ's Wholesale Club (30.51%) together drive roughly three-quarters of portfolio income, so the two anchors dominate outcomes, and Interstate Batteries is privately held with no publicly rated debt. Distribution growth is modest - 5.00% rising to only 5.33% over five years - reflecting flat net-lease escalations, so total return depends heavily on exit valuation rather than income growth. The exit thesis relies on ExchangeRight's REIT aggregation: a Section 721 roll-up depends on the Essential Income REIT's capital availability and is not guaranteed, and Owners have no control over the exit price or timing. The offering uses leverage (43.32% LTV) with a five-year balloon; the loan is interest-only with no amortization, so no principal is paid down during the hold, and refinancing or sale risk concentrates at maturity. As with all DSTs, investors have no voting rights or operational control, rely on the Sponsor and Master Lessee, bear an upfront load of roughly 9.5% of equity, and face the standard 1031/tax and illiquidity risks detailed in the Memorandum's Risk Factors.
