What a 7 Percent Cap Rate Actually Means Right Now

sounds solid. Safe. Predictable. But in medical real estate right now, a seven cap doesn’t always mean what you think it does.

That number might be based on rent that’s about to expire. Or on a group that’s behind on reimbursements. Or in a submarket where new inventory is quietly pulling tenants away.

We’ve looked at recent deals where a “strong cap rate” was more like a band-aid—hiding bigger problems with lease security, rollover risk, or operator credit. That’s where surface-level analysis leads people into trouble.

Market intelligence cuts through it. We ask, “Where did that number come from?” “What’s the story behind the lease?” “Is this sustainable or just inflated to make the math work?”

Because a good deal isn’t just what the broker pitch says—it’s what’s underneath it.

If you’re looking at an opportunity that feels a little too polished, it’s probably time to dig in.

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