The essential income REIT of ExchangeRight, a provider of diversified real estate DST and REIT investments, 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 enhances 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.
“This is the next step in the growth of the Essential Income REIT and ExchangeRight’s aggregation strategy. 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,” Joshua Ungerecht, a managing partner at ExchangeRight, said. “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.”
