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Demand driven by life events
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Strong demographic tailwinds
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Notable market-resilient performance
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Lower correlations to macroenvironments
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Limited and underrepresented access
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High barriers to entry
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Fragmented ownership
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Historical Strong Risk-Adjusted Returns
Alternative real estate sectors – self-storage, healthcare, and student housing – demonstrated both resilience and notable performance throughout the Global Financial Crisis and the global COVID-19 pandemic, as well as the subsequent recovery periods, highlighting the strength of these sectors as a long-term real estate investment strategy.
NFI-ODCE represents the NCREIF Fund Index - Open End Diversified Core Equity, which is a capitalization-weighted, gross of fee, time-weighted return index of investment returns of the largest private real estate funds pursuing lower risk investment strategies utilizing low leverage and generally represented by equity ownership positions in stable
U.S. operating properties diversified across regions and property types. Full details on NFI-ODCE index can be found here: https://user.ncreif.org/data-products/funds/
Source: NCREIF NPI-Plus, 2023 Q1; Data calculated from properties held in NFI-ODCE Funds. Past performance does not guarantee future results. There can be no assurance ALT REIT will be able to implement its investment strategy.
*Sharpe Ratio is a measure that indicates the average return minus the risk-free return divided by the standard deviation of return on an investment. The Sharpe Ratio compares the return of an investment with its risk. Generally, the higher the Sharpe radio, the more attractive the risk-adjusted return.
Market-Resilient Performance
Alternative real estate sectors – self-storage, healthcare, and student housing – demonstrated both resilience and notable performance throughout the Global Financial Crisis and the global COVID-19 pandemic, as well as the subsequent recovery periods, highlighting the strength of these sectors as a long-term real estate investment strategy.
NFI-ODCE represents the NCREIF Fund Index - Open End Diversified Core Equity, which is a capitalization-weighted, gross of fee, time-weighted return index of investment returns of the largest private real estate funds pursuing lower risk investment strategies utilizing low leverage and generally represented by equity ownership positions in stable
U.S. operating properties diversified across regions and property types. Full details on NFI-ODCE index can be found here: https://user.ncreif.org/data-products/funds/
Source: NCREIF NPI-Plus, 2023 Q1; Data calculated from properties held in NFI-ODCE Funds. Past performance does not guarantee future results. There can be no assurance ALT REIT will be able to implement its investment strategy.
*Sharpe Ratio is a measure that indicates the average return minus the risk-free return divided by the standard deviation of return on an investment. The Sharpe Ratio compares the return of an investment with its risk. Generally, the higher the Sharpe radio, the more attractive the risk-adjusted return.
SELF-STORAGE
Life-Driven Events and Increasingly Mobile Society Support Demand
The self-storage sector has experienced significant growth with the average storage space used per person increasing from six square feet to between 10 and 13 square feet in recent years.1 Demand is primarily driven by four major life events – death, divorce, downsizing, dislocation – that occur regardless of the economic environment. Unique aspects of the self-storage sector that we believe make it a compelling investment include:
- Low tenant sensitivity to repricing may offer outsized rent growth
- Low capital expenditure operating asset
- Strong hedge to inflation with monthly repricing
In-Person Customer Rental Duration2
Fragmented Market Prime for Consolidation2
HEALTHCARE
Aging Population Continues to Grow and Live Longer
Baby Boomers will be 65 or older by 20303, which is expected to lead to healthcare expenditures increasing from 20 to 30 percent of GDP by 2030.4
The demand for medical outpatient buildings is supported by:
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An expanding number of insured Americans needing access to care
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A shift to outpatient care, resulting in health systems offering more convenient locations5
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Healthcare technology advancements requiring additional space
Senior housing’s favorable supply/demand dynamics are driven by:
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An undersupply of high-quality continuum of care communities with below average future construction pipeline6
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Growing Baby Boomer demographic that is living longer with an increasing separation from additional family support
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Increasing occupancies over the last 11 consecutive quarters7
An Aging Nation8
Americans Living Longer9
STUDENT HOUSING
Strong Fundamentals Aid in Multi-Decade Durability
College enrollment rates are generally unaffected by recessionary periods with enrollments increasing amid four economic recessions.10
Demographics are expected to drive student housing growth through 2031 with college enrollments increasing by nine percent – that's more than one million more students expected to be enrolled in post-secondary institutions.10
Student housing performance and growth is highlighted by:
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Favorable supply-demand dynamics
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Strong current operating fundamentals
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College education continues to provide a meaningful return on investment with graduates boasting the highest labor force participation, lowest unemployment rate, and higher earnings
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Strong average occupancies and rent growth among purpose-built student housing over past 15+ years
New Off-Campus Student Housing Supply By Year11
Axiometrics 175 Occupancy & Rent Growth11
