ExchangeRight, a leader in diversified real estate DST and REIT investments in the United States, recently announced a significant financial development.
The company’s Essential Income REIT has successfully secured a credit facility with Wells Fargo. The initial closing of the revolving line of credit stands at $75m, with potential expansion up to $400m, contingent upon additional commitments.
The provision of this credit facility by Wells Fargo marks a strategic enhancement in ExchangeRight’s financial capacity and flexibility. This financial boost is aimed at advancing the company’s aggregation strategy, which is crucial for optimizing the REIT’s balance sheet through long-term fixed-rate corporate bond financing. The timing allows ExchangeRight to strategically manage the REIT’s debt maturities under favorable conditions.
The funds from the credit facility are earmarked for a variety of strategic uses including financing permitted acquisitions, covering capital expenditures, and investments, as well as settling pre-development and development costs. Moreover, the facility will support the REIT’s refinancing and working capital requirements. This array of financial flexibility is poised to refine the REIT’s execution of its investment strategy, which has been actively expanding since its inception in 2019.
As of May 31, 2024, the Essential Income REIT has compiled an impressive portfolio, boasting 353 net-leased properties across 34 states. These properties are predominantly leased to investment-grade and recession-resilient tenants operating within the necessity retail and healthcare sectors.
Joshua Ungerecht, a managing partner at ExchangeRight, said,” 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. 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.”
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