February 13, 2023

There are major demographic shifts underway in America, and Alliance is keeping a close eye on them. Opportunities are everywhere, if you know how to find them.

For years now, and especially in this period of higher inflation, we’ve been seeing a significant population shift away from expensive primary cities and toward smaller cities, suburbs, and even some rural areas.

We’re also seeing many of our favorite kinds of tenants, medical practices, looking to expand in these new areas. Smaller and rural communities tend to skew older in their demographics, implying greater demand for medical services. Also, doctors experience the same cost-of-living crunches as everybody else. No surprise, more of them are considering setting up practices in lower-cost communities.

While some see telemedicine as a big threat to the industry, we tend to disagree. Telemedicine and traditional medicine are complementary. Online appointments can certainly displace some kinds of medical appointments, but others will remain very much in-person. There is no remote kidney dialysis, endoscopy, or surgery, for example.

For medical practices looking to expand into new geographies, the economics often look far better for the first to arrive. The right combination of a growing area with a deficit in medical facilities can represent an opportunity. A first-mover advantage can lock in great returns for our investors. The second medical facility in the area will look far less attractive. It’s simple supply-and-demand.

Of course, many areas that lack medical services and facilities don’t have them for good reasons. Sometimes communities are underserved because the economics just don’t work. This is why growth, demographic forecasting, and the financial details of any deal are all essential for finding the right investments.

At Alliance, we combine specialized knowledge of the medical industry, extensive research and attention to detail, and a deep understanding of market fundamentals to help keep us ahead of emerging trends and the market.

In the end, everything boils down to supply and demand. Our team goes deep on both sides of the market, across the entire United States. As population shifts to new areas, we’re following these changes closely and looking for those bullseye targets.

Great deals are out there, and we’re consistently finding them.

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