ExchangeRight’s Final Multifamily Comes Full Circle at 154% Return

ExchangeRight brought its sixth and final multifamily offering full cycle, generating total returns of 154.48 percent including return of capital to the DST and its investors. These returns represent a 14.35 percent annualized return on investors’ capital, which is more than 2.4 times higher than the company’s original target of 5.96 percent annual returns.

“When we initially became active in the multifamily market in 2015, we were able to acquire properties in the 6 to 7 percent cap rate range,” said Joshua Ungerecht, a managing partner of ExchangeRight. “What we’re seeing in today’s market is that many multifamily properties are trading from the high 3 percent to the low 5 percent cap rate range. That is not an attractive market to buy in, but it’s a phenomenal market to sell in. Exiting at this time is the best way to serve our investors and to protect and grow their wealth.”

The El Paso Apartment Portfolio was a two-property class-B value-add apartment offering totaling 393 units. With the sale, ExchangeRight capitalized on value-add measures that it implemented to increase net operating income, and exited while buyer underwriting was aggressive and valuations remained at record levels. ExchangeRight executed its value-add strategy throughout the hold period by renovating units and increasing management efficiencies at the properties to achieve strong occupancy rates.