Select Physical Therapy Credit Rating & NNN Cap Rate Analysis

Select Physical Therapy Business Overview & NNN Investment Profile

Select Physical Therapy is the outpatient rehabilitation brand of Select Medical Corporation (NYSE: SEM), the largest provider of outpatient physical therapy services in the United States by clinic count. As of December 31, 2025, Select Medical operated 1,917 outpatient rehabilitation clinics across 39 states and the District of Columbia under the Select Physical Therapy, NovaCare Rehabilitation, and Kessler Rehabilitation Center brand names. The parent company also operates 104 critical illness recovery hospitals and 38 inpatient rehabilitation hospitals, making it one of the most diversified post-acute care platforms in the country. Select Medical recently spun off its Concentra occupational health division as a separate publicly traded entity (NYSE: CON).

For NNN investors, Select Physical Therapy clinics are small-format, high-volume outpatient locations typically found in strip centers, medical office buildings, or freestanding retail locations. The clinics are generally 2,000 to 5,000 square feet and serve a steady stream of patients referred from orthopedic surgeons, primary care physicians, and employer-sponsored workers’ compensation programs. The corporate guarantee comes from Select Medical Corporation, which carries S&P B+ and Moody‑s B1 ratings, placing it in the speculative grade category. However, Select Medical’s scale, diversified business lines, and long operating history provide meaningful credit support relative to smaller physical therapy operators.

Cap Rate Analysis & Pricing for Select Physical Therapy NNN Properties

Select Physical Therapy NNN properties trade in the 7.00% to 8.50% cap rate range as of Q1 2026. The small clinic sizes and relatively short lease terms (typically 5 to 10 years with renewal options) contribute to the wider cap rate range. However, the locations are highly re-tenantable for other medical, dental, or personal services uses, which mitigates the credit risk to some degree. Properties in primary suburban markets with longer remaining terms trade tighter, while those in secondary markets or approaching lease expiration trade wider.

Pricing typically ranges from $600,000 to $2.5 million, making Select Physical Therapy clinics accessible to individual investors seeking healthcare NNN exposure at modest capital commitments. Per-square-foot rents generally range from $22 to $35 NNN.