SAFETY AND FINANCIAL UPSIDE

Options traders and other financial professionals might say that if you want downside protection, you have to sacrifice upside rewards. That's not always true.

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This might be true in most markets, but Alliance’s multi-decade track record is proof that it is actually possible to find super safe investments that also have great upside potential.

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The Medical Office Building (MOB) segment of commercial real estate has been our golden goose. As recessions, COVID lockdowns, inflation, and other economic problems have hit stocks, bonds, and the rest of the real estate market, MOB has continued to perform well. Sometimes, very well.

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This unique market segment seems to be virtually recession proof. As I say often, the human body is never going out of style. People will always need medical care, and doctors will always need locations for their work.

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Think about the doctors you have interacted with over your life. How many of them went out of business? How often did they move their practices to a new office? I bet the answer is not many. Most medical practices do very well for a long time, and most of them prefer to stay in their chosen locations.

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In all real estate, location matters. Doctors want to be close to their patients, hospitals, and good infrastructure, like highways. Many of them also locate in or near high end shopping malls or other retail properties. Once they find a spot that works, there are countless reasons to stay.

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That’s why our MOB investments have paid out very reliably for a long time. Medical businesses have thrived and their monthly rent checks arrive like clockwork.

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Alliance has delivered over 20% IRR for decades. Over the last few years, even with the pandemic, we’ve achieved a 24% IRR. To put that in perspective, that rate of return will double your money in about three years.

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How are we able to invest with so little risk and still see upside?

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Even sophisticated real estate investors lack the nuanced understanding of healthcare real estate that Alliance has built up over decades. As a pioneer in this sector, Alliance has tremendous expertise and insight into the needs of medical tenants and how to evaluate supply and demand at a local level.

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Our property investments have proven to be extremely safe. The added upside comes from finding great deals and knowing how to add value.

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These days, it feels like the market has moved in our direction. More investors want the combination of safety first, plus real upside potential, that Alliance has been delivering for a long time. We’re a great fit for the current environment.

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