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Interest Grows for Net Lease Medical Properties

Cap rates have fallen, and are now almost even with the overall net lease market.

By Brian J. Rogal | Updated on November 30, 2017

chi-net lease medical Net lease medical properties typically have long leases and built-in rental escalations, making them popular with private and 1031 investors.

CHICAGO—The single tenant medical sector remained popular with investors through the first three quarters of 2017, and several demographic factors will likely sustain that interest over the next few years, regardless of the changes in the nation’s political landscape.

Third-quarter cap rates in this sector, defined as medical assets priced under $10 million, compressed by 25 bps when compared to last year, and now stand at 6.25%, according to a new report from The Boulder Group, a single tenant net lease firm in suburban Chicago. That’s just above the rates for the overall net lease market, which remained relatively steady,

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