ExchangeRight is committed to providing 1031-exchangeable DST offerings of value-added multifamily properties and net-leased portfolios. Our multifamily platform targets Class B apartments with stable income and value added upside potential. Our multifamily offerings feature strong cash flow, high debt coverage ratios, conservative underwriting, long-term fixed-rate financing, and the potential to enhance return with value-added strategies.
In addition to intentionally structuring offerings with an alignment of interest with investors, the principals of the company have taken a personal investment position in each DST offering that has been brought to market. Each of our DST offerings provides both 1031 and cash investors with pass-through tax deferral advantages.
| Tenant | Location | Credit Rating* | Size | Annual Rent | Lease Type | Current Term Remaining (years)** | Lease Expiration |
|---|---|---|---|---|---|---|---|
| Pick 'n Save (Kroger) | West Bend, WI | BBB | 63,133 | $1,136,677 | NN | 13.4 | 12/31/2030 |
| Dollar General | Columbia, SC | BBB | 9,153 | $85,691 | NNN | 10.9 | 6/30/2028 |
| Dollar General | Denham Springs, LA | BBB | 9,187 | $91,059 | NNN | 14.9 | 6/30/2032 |
| Dollar General | Norton, OH | BBB | 9,327 | $92,850 | NNN | 11.7 | 4/30/2029 |
| Dollar General | Zanesville ,OH | BBB | 9,289 | $91,488 | NNN | 13.6 | 3/31/2031 |
| Dollar General | Aiken, SC | BBB | 9,136 | $78,216 | NNN | 13.6 | 3/31/2031 |
| Dollar General | Walker, LA | BBB | 12,526 | $125,926 | NNN | 10.9 | 6/30/2028 |
| Dollar General | Belleville, IL | BBB | 9,126 | $85,584 | NNN | 13.2 | 10/31/2030 |
| Advance Auto Parts | Travelers Rest, SC | BBB- | 6,891 | $78,540 | NN | 9.4 | 12/31/2026 |
| Walgreens | Blacklick, OH | BBB | 14,489 | $308,000 | NN | 11.0 | 8/31/2028 |
| Walgreens | Waukesha, WI | BBB | 15,615 | $400,000 | NN | 11.4 | 12/31/2028 |
| Goodwill | Grafton, WI | N/A | 22,000 | $212,930 | NN | 10.0 | 8/31/2027 |
| Tractor Supply | Staunton, VA | N/A | 22,676 | $326,508 | NNN | 14.8 | 5/31/2032 |
| Tractor Supply | Conway, SC | N/A | 24,738 | $315,996 | NNN | 14.8 | 5/31/2032 |
| Verizon Wireless | Columbia, SC | BBB+ | 6,254 | $324,450 | NN | 9.5 | 1/31/2027 |
| Napa Auto Parts | Sun Prairie, WI | N/A | 5,342 | $48,000 | NNN | 20.0 | 8/9/2037 |
*Credit Ratings are from S&P (Standard & Poor)
**Current Term Remaining as of 08/21/2017
Tenant Summaries**
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Pick ‘n Save was founded in 1975 in Milwaukee, Wisconsin and is now the premier supermarket chain in Wisconsin with over 100 stores serving customers. Pick ‘n Save is focused on giving back to their community and have supported them with nearly $4 million in funds and food since 2003. Featuring competitive employee benefits and a strong commitment to promote from within, Pick ‘n Save employs approximately 10,000 employees. In 2015, Pick ‘n Save became a wholly owned subsidiary of Kroger (NYSE: KR).
Dollar General (NYSE: DG) is one of the nation’s largest small-box discount retailers. Dollar General has over 90,000 employees operating over 11,100 locations in 40 states and has plans to open approximately 900 new stores in 2016. It strives to make shopping for everyday needs simpler and hassle-free by offering a carefully selected assortment of the most popular brands at low everyday prices in small, convenient locations.
Advance Auto Parts (NYSE: AAP) is an aftermarket retailer of automotive parts and supplies and a provider of auto maintenance services. It operates nearly 4,000 stores and employs about 55,000 “Team Members.” Increases in new vehicle sales allow Advance Auto to demonstrate its key strategies: superior availability and service leadership. It continues to increase its delivery speed, reliability, and supply chain, and it is opening new stores in underserved markets.
Walgreens (NASDAQ: WBA) is the largest drug retailer in America—employing approximately 248,000 people and operating 8,678 stores throughout the United States. Walgreens’ products include over-the-counter medicine and consumer products, pharmacy services and photo services. Walgreens has expanded through a series of strategic acquisitions and was included in Fortune’s World’s Most Admired Companies list for the 20th consecutive year.
While it's most well known for its more than 3,000 thrift stores, Goodwill Industries focuses on providing rehabilitation, job training, placement, and employment services for people with disabilities and others. Goodwill is one of the world's largest providers of such services, as well as one of the largest employers in the world of the physically, mentally, and emotionally disabled. Support for its programs is generated primarily from the sale of donated goods.
Tractor Supply Co. (NASDAQ: TSCO) is a leading chain of retail stores that each carry products related to home improvement, agriculture, truck maintenance, livestock, equine care, and household pet care. It employs over 17,000 individuals and operates over 1,200 stores across 47 states. Stores are strategically located in towns outlying major metropolitan areas and in rural communities. It was listed by Forbes among the 100 fastest growing businesses.
Verizon Communications Inc., through its subsidiaries, provides communications, information, and entertainment products and services to consumers, businesses, and governmental agencies worldwide. Its Wireless segment offers wireless voice and data services; Internet access on various smart and basic phones, notebook computers, and tablets; and multimedia access, business-focused, location-based, global data, home phone handsets, and high-speed Internet services, as well as network access and value added services to support wireless connections for the Internet of Things (IoT). This segment also provides IoT services that support devices used in fleet management and telematics, energy, agricultural technology, and smart community markets; and wireless devices, such as smartphones and basic phones, tablets, and other Internet access devices. As of December 31, 2016, it had 114.2 million retail connections. Verizon Communications Inc. was founded in 1983 and is headquartered in New York City, New York.
NAPA (The National Automotive Parts Association) is an American-based voluntary trade association that distributes and sells over 400,000 products to auto and industrial sectors. NAPA’s sole member and majority owner is Genuine Parts Company (NYSE: GPC). Its infrastructure and commitment to quality produce higher revenues, a stronger operating margin, and a more-credit-positive debt-to-EBITDA ratio than found in the rest of the industry.
**Tenant Summaries have been provided by Sponsor and have not been verified by Realty Mogul or North Capital Private Securities
Appraisals for all properties available upon request. Please email investor-help@realtymogul.com.
| Sources of Funds | Cost |
|---|---|
| Equity | $31,540,000 |
| Debt | $36,860,000 |
| Total Sources of Funds | $68,400,000 |
| Uses of Funds | Cost |
| Purchase Price | $59,940,561 |
| Acquisition Closing Costs | $3,315,410 |
| Acquisition Fee | $1,073,899 |
| Broker-Dealer Fee and Marketing Allowance | $2,523,200 |
| Syndication Costs & Third Party Costs | $110,000 |
| Organizational, Offering Costs, Pre-Paid Taxes, & Insurance | $264,701 |
| Reserves (excluding Pre-paid Taxes & Insurance) | $1,093,379 |
| Sponsorship Cost | $78,850 |
| Total Uses of Funds | $68,400,000 |
The Portfolio has existing debt:
- Lender: Société Générale
- Loan Origination Date: 8/10/2017
- Loan Proceeds: $36,860,000
- Loan to Cost: 53.9%
- Interest Rate: Fixed (3.993%)
- Amortization: 10-year interest only
- Recourse: Non-recourse to the Trust, but recourse to the Trust and principals of the Sponsor for certain (i) "bad acts," and (ii) environmental indemnification
- Term: 10 years
- Prepayment Penalty: Subject to Defeasance fee if loan repaid before June, 2027.
The Sponsor is to make distributions directly to investors who own a beneficial interest in the DST on a pro-rata basis.
Distributions are expected to start for each investor within 45 days of the completion of that investors beneficial interest in the DST. Distributions are expected to continue on a monthly basis thereafter. These distributions are at the discretion of the Sponsor and made directly by the Sponsor, neither Realty Mogul Co. nor any of its affiliates have any control or discretion on the timing or amount of distributions.
Certain fees and compensation will be paid over the life of the transaction. The following fees and compensation will be paid:
| Type of Fee | Amount of Fee | Received By | Paid From | Notes |
| One-Time Fees: | ||||
|---|---|---|---|---|
| Acquisition Fee | $1,073,899 | Sponsor | Capitalized Equity Contribution | 3.4% of the offering amount. |
| Broker-Dealer Fee | 7.0% | Broker Dealers | Capitalized Equity Contribution | Paid to North Capital(1) or other licensed broker-dealers based on the amount of equity capital raised. Surplus fees retained by Sponsor. |
| Marketing & Due Diligence Fee | 1.0% | Broker Dealers | Capitalized Equity Contribution | 1.0% based on the amount of equity invested by investors through RealtyMogul.com, third-party Broker Dealers (including North Capital(1)) are entitled to additional fees based on equity they originate. Surplus fees retained by Sponsor. |
| Syndication Costs | $80,000 | Sponsor or Third Parties | Capitalized Equity Contribution | Approximately 0.25% of the Maximum Offering Amount |
| Organizational & Offering Costs | $63,080 | Sponsor | Capitalized Equity Contribution | 0.2% of maximum offering amount. |
| Sponsorship Cost | $78,850 | Sponsor | Capitalized Equity Contribution | 0.25% of the offering amount. To reimburse Sponsor for accounting, due diligence, marketing, distribution, and other costs. |
| Disposition Fee | 2.0% | Manager | Disposition Proceeds | 2.0% of gross proceeds from disposition of property if disposition price is greater than $68,400,000. |
| Recurring Fees: | ||||
| Property/Asset Management Fee | 2.9% of gross rental income | Manager | Operating Cash Flow | |
| Trustee Fee | $750 annually | Third-Party | Operating Cash Flow | Unaffiliated third party |
| Master Lease Operating Profit | N/A | Master Lessee | Operating Cash Flow | Master Lessee will retain operating revenues from the Properties that exceed the annual base rent. |
Notes:
(1) Certain employees of Realty Mogul, Co. are registered representatives of, and are paid commissions by, North Capital Private Securities Corp., a Delaware corporation ("North Capital"). In addition, North Capital pays a technology provider services fee to Realty Mogul, Co. for licensing and access to certain technology, reporting, communications, branding, entity formation and administrative services performed from time to time by Realty Mogul, Co., and North Capital and Realty Mogul, Co. are parties to a profit sharing arrangement.
The above presentation is based upon information supplied by the Sponsor or others. Realty Mogul, Co. along with its respective affiliates, officers, directors or representatives (the "RM Parties") hereby advise you that none of them has independently confirmed or verified any of the information contained herein. The RM Parties further make no representations as to the accuracy or completeness of any such information and undertake no obligation now or in the future to update or correct this presentation or any information contained herein.
RM Securities, LLC, its registered representatives, affiliates, associated persons, and personnel of its affiliates who may also be associated with it, including our associated persons and personnel of our affiliates who are also be associated with RM Securities, LLC (it (“RM Securities,” “we,” “our,” or “us”) will receive fees, expense reimbursements, and other compensation (“Fees”) from the issuer of this investment offering, its sponsor, or an affiliate thereof (“Sponsor”), or otherwise in connection with Sponsor’s offering. The Fees paid to us are in addition to other fees you will pay to Sponsor or in connection with Sponsor’s investment offering. You will pay Fees to Sponsor, either directly or indirectly as an investor in the Sponsor’s offering. Sponsor will use the Fees you pay, as well as funds you invest in the relevant offering, to compensate us. The Fees paid to us will directly or indirectly be borne by you as the investor (typically, but not always, in the form of an expense of the Sponsor’s offering in which you invest) because such Fees will reduce the proceeds available for distribution to you and reduce the amount you earn over time.
For more information on the Fees paid to us, or any other Fees you will pay in connection with Sponsor’s offering, please carefully review the Sponsor’s Investment Documents. Please also carefully review RM Securities’ Form CRS, Regulation Best Interest Disclosures, and Limited Brokerage Services Agreement.
No Approval, Opinion or Representation, or Warranty by RM Securities, LLCSponsor has provided, approved, and is solely responsible in all aspects for the information on this webpage (“Page”), including Sponsor’s offering documentation, which may include without limitation the Private Placement Memorandum, Operating or Limited Partnership Agreement, Subscription Agreement, the Project Summary and all exhibits and other documents attached thereto or referenced therein (collectively, the “Investment Documents”). The Investment Documents linked on this page have been prepared and posted by Sponsor, and not by RM Securities. We did not assist in preparing, do not adopt or endorse, and we are not otherwise responsible for, the Sponsor’s Investment Documents. We make no representations or warranties as to the accuracy of information on this Page or in the Sponsor’s Investment Documents and we accept no liability therefor. No part of the information on this Page or in the Sponsor’s Investment Documents is intended to be binding on us.
Sponsor’s Information Qualified by Investment DocumentsThe information on this Page is qualified in its entirety by reference to the more complete information about the offering contained in the Sponsor’s Investment Documents. The information on this Page is not complete and subject to change at the Sponsor’s discretion at any time up to the closing date. The Sponsor’s Investment Documents and supplements thereto contain important information about the Sponsor’s offering including relevant investment objectives, the business plan, risks, charges, expenses, and other information, which you should consider carefully before investing. The information on this Page should not be used as a basis for an investor’s decision to invest.
Risk of InvestmentThis investment is speculative, highly illiquid, and involves substantial risk. There can be no assurances that all or any of Sponsor’s assumptions, expectations, estimates, goals, hypothetical illustrations, or other aspects of Sponsor’s business plans (“Assumptions”) will be true or that actual performance will bear any relation to Sponsor’s Assumptions, and no guarantee or representation is made that Sponsor’s Assumptions will be achieved. If Sponsor does not achieve its Assumptions, your investment could be materially and adversely affected. A loss of part or all of the principal value of your investment may occur. You should not invest unless you can readily bear the consequences of such loss. Sponsor’s Assumptions should not be relied upon as the primary basis for your decision to invest.
No Reliance on Forward-Looking Statements; Sponsor AssumptionsSponsor is solely responsible for statements made concerning forward-looking statements and Assumptions, which apply only as of the date made, are preliminary and subject to change, and are expressly qualified in their entirety by the disclosures and cautionary statements included in Sponsor’s Investment Documents, which you should carefully review. Neither RM Securities nor Sponsor are obligated to update or revise such forward-looking statements or Assumptions to reflect events or circumstances that arise after the date made or to reflect the occurrence of unanticipated events. Sponsor’s forward-looking statements and Assumptions are hypothetical, not based on actual investment achievements or events, and are presented solely for purposes of providing insight into the Sponsor’s investment objectives, detailing Sponsor’s anticipated risk and reward characteristics, and establishing a benchmark for future evaluation of actual results; therefore, they are not a predictor, projection, or guarantee of future results. You should not rely on Sponsor’s forward-looking statements as a basis to invest.
Importantly, we do not adopt, endorse, or provide any assurance of returns or as to the accuracy or reasonableness of Sponsor’s Assumptions or forward-looking statements.
No Reliance on Past PerformanceAny description of past performance is not a reliable indicator of future performance and should not be relied upon as the primary basis to invest.
Sponsor’s Use of DebtA substantial portion of the total cost of the real estate asset acquired by the Sponsor with investor funds (“Property”) will be paid with borrowed funds, i.e., debt. Sponsor’s estimated rates and terms of the debt financing are subject to lender approval, and there is no assurance that the Sponsor will secure debt at the rates and terms presented on this Page or in the Sponsor’s Investment Documents, or at all. The use of borrowed money to acquire real estate is referred to as leveraging, which can amplify losses and could result in lender foreclosure. In addition, if the debt includes a variable (or “floating”) interest rate, the total amount of interest paid over the term of the debt will fluctuate and can increase. As a result, Sponsor’s use of debt can result in a loss of some or all of your investment.
Sponsor’s Offering is Not RegisteredSponsor’s securities offering will not be registered under the Securities Act of 1933, as amended (the “Securities Act”), in reliance upon the exemptions from registration pursuant to Rule 506(c) of Regulation D as promulgated under the Securities Act (“Private Placement”). In addition, the offering will not be registered under any state securities laws in reliance on exemptions from state registration. Such securities (your ownership interests) are subject to restrictions on transferability and resale and may not be transferred or resold except as permitted under applicable state and federal securities laws pursuant to registration or an available exemption. All Private Placements on the Platform are intended solely for “Accredited Investors,” as that term is defined in Rule 501(a) under the Securities Act.
No Investment AdviceNothing on this Page should be regarded as investment advice (either with respect to a particular security or regarding an overall investment strategy), a recommendation, an offer to sell, or a solicitation of or an offer to buy any security. Advice from a securities professional is strongly advised to understand and assess the risks associated with real estate or private placement investments. For additional information on RM Securities’ involvement in this offering, please carefully review the Sponsor’s Investment Documents, and RM Securities’ Form CRS, Regulation Best Interest Disclosures, and Limited Brokerage Services Agreement.
1031 Exchange RiskInternal Revenue Code Section 1031 (“Section 1031”) contains complex tax concepts and certain tax consequences may vary depending on the individual circumstances of each investor. RM Securities and its affiliates make no representation or warranty of any kind with respect to the tax consequences of your investment or that the IRS will not challenge any such treatment. You should consult with and rely on your own tax advisor about the tax aspects with respect to your particular circumstances.