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  • Writer's pictureRealFacts Editorial Team

Wells Fargo Grants $75 Million Credit Facility to ExchangeRight's Essential Income REIT


Houses

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, as reported by PR Newswire. This 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 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 Essential Income 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 its investment strategy more efficiently 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 operating in the necessity retail and healthcare industries.


Joshua Ungerecht, a managing partner at ExchangeRight, emphasized that this agreement is expected to help optimize the REIT's business operations, providing 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.”


The Credit Facility with Wells Fargo offers several key benefits for ExchangeRight's Essential Income REIT. It enhances the REIT's financing capacity, allowing for increased financial flexibility to support acquisitions and capital expenditures. It also strengthens the REIT's operational resilience, providing the ability to manage and optimize its debt portfolio effectively. Additionally, the facility helps streamline operations and reduce transaction costs, supporting the REIT's long-term investment goals and diversification efforts. Furthermore, it offers opportunities to lock in favorable long-term financing rates, ensuring the REIT can secure cost-effective funding for future growth.


The collaboration between ExchangeRight and Wells Fargo through this Credit Facility represents a significant milestone in the growth and strategic development of the Essential Income REIT. By securing this financial support, ExchangeRight is well-positioned to enhance its investment portfolio, optimize operations, and deliver continued value to its investors.

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