Single-tenant medical net lease is looking very healthy. Cap rates for the subsector, involving properties from $2 million to $8 million, dropped 55 basis points year over year to 5.95% in Q3 of 2021, according to a new report from the Boulder Group. The overall net lease group also saw a cap rate compression, but of 23 basis points.

In other words, a year ago, medical net lease was trading at a 28-basis point discount to the general category. Now it's at a 4-basis point premium. "It's outperformed the market by 32 basis points last year, which is fairly significant," Boulder Group president Randy Blankstein tells GlobeSt.com. "A lot of net lease-investors are over allocated in retail. They want to rebalance, and that's buy more in medical and in industrial."

But industrial is wickedly popular these days, with cap rates in some geographic areas and types pushed down into the threes. The properties can be extremely expensive, especially when talking of major logistics space for an Amazon or Target or FedEx.