Alternative real estate sectors are no longer a niche focus for investors and are quickly becoming a key allocation within diversified portfolios. The COVID-19 pandemic has highlighted that effective healthcare is vital to our physical, mental and economic well being, which has piqued interest in real estate linked to its efficient delivery, specifically medical office buildings. The sector is particularly compelling as it offers strong relative value and risk-adjusted returns in an environment of compressed fixed-income yields, rapidly expanding P/E multiples in public equities, and increasing uncertainty in some traditional real estate asset classes. Ultimately, demographic tailwinds drive demand in the medical office sector, and a history of stability and high barriers to entry provide potential downside protection.

The sector is also specialized. Medical office tenants have specialized space requirements, and hospital systems have differing expansion needs and goals. Acco