Medical Properties Still Trail the Overall Net Lease Market

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CHICAGO—While net lease medical properties have seen a strong increase in demand, they are still priced at a 10-basis point (bps) discount to the overall net lease market, according the third quarter 2019 Net Lease Medical Report from The Boulder Group. The Boulder Group primarily attributes this discount to the limited amount of investment grade tenants in the medical sector. In fact, only 27% of the medical property sector supply was leased to investment grade rated tenants in the third quarter of 2019.

But there are other reasons for this 10-bps discount to other net lease properties. Even though retail has its issues, it still boasts some advantages compared to medical.