Wells Fargo Provides ExchangeRight’s Essential Income REIT With $75 Million Credit Facility

This is the next step in the growth of the Essential Income REIT and ExchangeRight’s aggregation strategy.

June 12, 2024

This article was originally published on ExchangeRight by Lindsey Thompson.

PASADENA, Calif. — ExchangeRight, one of the nation’s leading providers of diversified real estate DST and REIT investments, has announced that the company’s Essential Income REIT has entered into a Credit Facility with Wells Fargo, closing on the first $75 million of the revolving line of credit. The Credit Facility may be increased to $400 million upon request of the Essential Income REIT, subject to receipt of commitments for the increased amount.

Securing this Credit Facility with Wells Fargo on behalf of the REIT powerfully advances the execution of ExchangeRight’s aggregation strategy by enhancing the company’s financing capacity, flexibility, and operational resilience. This facility positions ExchangeRight to optimize the REIT’s balance sheet with long-term fixed-rate corporate bond financing, providing the company with greater control to lengthen and ladder the REIT’s debt maturities at favorable rates once the time is right.

The REIT may utilize the Credit Facility to finance permitted acquisitions, certain capital expenditures and investments, payments of applicable pre-development and development costs, as well as to support any of its refinancing and working capital needs. These advantages empower the REIT to execute on its investment strategy even more efficiently than it has since its 2019 launch. As of May 31, 2024, the REIT has aggregated a portfolio of 353 net-leased properties diversified across 34 states and 36 primarily investment-grade and historically recession-resilient tenants successfully operating in the necessity retail and healthcare industries.

Joshua Ungerecht, a managing partner at ExchangeRight, shared that this agreement is expected to help optimize the REIT’s business operations to provide further protection and value-creation for investors.

“This is the next step in the growth of the Essential Income REIT and ExchangeRight’s aggregation strategy,” said Ungerecht. “With this new Credit Facility, the REIT will be in an advantageous position to streamline operations and minimize transaction costs, create new opportunities to further diversify debt terms, and lock in long-term financing when rates are favorable. On behalf of the REIT’s investors, we are grateful for the relationship with Wells Fargo and for their thoughtful due diligence on the quality of the Essential Income REIT’s current portfolio and ExchangeRight’s investment and aggregation strategy. We remain committed to steward the trust placed in us by investors, advisors, representatives, and now, Wells Fargo with their provision of this valuable Credit Facility.”

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, focusing on investing in single-tenant, primarily investment-grade net-leased real estate. For more information, please visit the Class A website for broker-dealers, registered representatives, and their investors, or the Class I website for RIAs, advisors, family offices, institutions, and their investors. Past performance of the REIT and ExchangeRight does not guarantee future performance.