Alliance Founder Ben Reinberg on Medical Office Investing in 2022

By Published On: May 14, 20223.2 min read

To further’s mission of democratizing knowledge about commercial real estate, we started an interview series with all kinds of CREF pros: everyone from multifamily and medical to cannabis and construction. This time we connected with Alliance Consolidated Group of Companies Founder and CEO Ben Reinberg to discuss medical office real estate.

Here’s how the conversation went:

How has the healthcare sector performed during the pandemic, and will that change in the coming years?

Even before the pandemic, healthcare real estate was a growing sector for a number of reasons. For one, we have an aging population in this country with approximately 10,000 baby boomers turning 65 each day, which means more doctor visits. Also, medical practitioners often make expensive upgrades to their spaces, which disincentivizes them from moving at the end of a lease term. These factors combine to drive up demand for medical space.

Healthcare was one of the few sectors to weather the storm of COVID-19. While sheltering in place may have hurt restaurant and retail sales, not going to the doctor literally has life-or-death ramifications. As a result, the healthcare sector was strong going into the pandemic and is very much in demand coming out of it.

Which types of healthcare tenants are most in demand at the moment? Are there any that may perform poorly in the near future?

When it comes to medical users who occupy traditionally retail spaces, specialists such as otolaryngologists, cardiologists and gastroenterologists are among the many practitioners seeking out off-campus locations close to where their patients live. These tenants tend to sign long-term leases and are highly desirable, especially in growing markets.

Dialysis clinics were pioneers in the medtail trend, and they remain high-quality tenants. While at-home dialysis is on the rise, I think DaVita, Fresnius and the other major dialysis providers will remain in good shape as they modify their focus to include integrated kidney disease care.

Are you seeing an increase or a decrease in sale-leasebacks within healthcare real estate? Why do you think this is?


It used to be the norm that small family offices would purchase the buildings out of which they operate. But owning and maintaining a property can be a full-time job of its own, which pulls resources from their real job of delivering care to their patients.

Younger doctors entering the field don’t necessarily want to follow that same owner-operator path, so as the elder doctors in a group approach retirement age, they often make the decision to sell the property and leave the maintenance issues to someone else. Sale-leasebacks also give the physician groups an influx of capital that they can use to buy new equipment or expand their practice.

What first steps should investors take if they want to get into net lease medical real estate?

Like all asset classes, medical real estate has its own intricacies, so investors need to research and understand how this sector works, as well as the different lease structures and variety of tenants in the marketplace. For example, unlike general retail and office users, medical tenants often face special licensing regulations that limit where and how they use real estate — and these vary from state to state. It takes a deep knowledge of these various factors to be successful in healthcare real estate investment.

Any 2022 or 2023 predictions for that asset class?

I think the healthcare sector is only going to continue to grow. While higher interest rates and inflation will have a deleterious impact on financing and pricing, healthcare is so in demand that the sector should be well insulated from those headwinds. In addition, we’ve all seen over the past two years just how important healthcare is, so I expect that the demand for medical spaces will increase in the years to come.

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