Now that the fourth quarter of the year is almost done, it’s time to plan for 2023. With the current economic climate and interest rates rising, many are concerned about the stock market and their investment portfolios. That’s why commercial property investment is the right decision in a down economy. Real property isn’t going anywhere and while it is subject to economic change, according to Ben Reinberg, the Founder and CEO of Alliance Consolidated Group of Companies (Alliance), it’s both a safer investment and a buyer’s market. In fact, according to Reinberg, over the past three decades of successfully investing in commercial property, he has literally experienced it all.
“Alliance has been successful because of our persistence, focus, resource-rich ability to adapt to different environments, and our strong leadership team. We are always spearheading new initiatives and taking our investments to the next level,” said Reinberg.
As a policy, Alliance is very selective about their investments and sticks to their internal criteria because they work. Reinberg isn’t fazed by the market changes and, in fact, recently launched a new fund, which is already significantly filled, to do significantly more transactions over the next 18-24 months. His team stays with their transactions and their focus is on health care and veterinary buildings.
“Our ‘sweet spot’ is medical and veterinary properties with a population of at least 50,000 permanent residents within a 5-mile radius,” notes Reinberg. “Rent growth in the initial lease term, investment in properties by the tenants, and whether they are private or public organizations” all play key roles in the Alliance decision-making process. “Each of our criteria are designed to maximize the value and return for each side deal,” added Reinberg.
While many elect to invest in commercial real estate, it is Alliance’s focus that is of particular interest. Because the company is excited by the market changes, it is apparent to anyone that works with Alliance that they want to make deals that are good for all sides. This includes the tenants. With healthcare being one of the fastest growing industries in the U.S., it is obvious why Alliance is keenly focused on this space. The demand for doctors, offices, and workers simply isn’t going away –ever.
When potential investors ask Reinberg about their investments, he typically educates them more than anything else. He makes it a practice to keep an open line of communication with investors at all times, and tackles misconceptions about his industry on a regular basis.
“The biggest misconception I hear is that investing in medical office assets is too risky. It’s ironic because the human body is never going out of style. It’s our foundation, as well as that of our tenants’ businesses. Another misconception is that investing in medical office assets provides low returns. Alliance has average mid 20s IRR in our medical investment space. We consistently provide low-risk investments with opportunistic returns.”
For those that are considering new investments, it’s important to understand that all investments come with a certain amount of risk. However, when you are able to mitigate that risk with a strong track record like Reinberg has, the stress associated with investing in a somewhat down economy is substantially reduced.