Investors who have been used to buying downtown offices, apartment buildings and shopping centers are looking deeper and deeper into the commercial real estate market for deals.

Doctor's offices, grocery stores and gas stations are seeing more attention from groups that would previously have been too risk-averse to consider snapping them up, The Wall Street Journal reports. But as prices have risen across the traditional sectors of the market amid low interest rates, these buyers are now looking at properties previously considered less palatable.

New York landlord Withco, for example, has raised $30M in venture capital from people like Will Smith, Venus Williams and Kevin Durant, alongside Founders Fund, Canaan Partners and Lennar Corp. Withco’s model is based on signing rent-to-own deals with small businesses, per the WSJ, hoping that it keeps vacancy lower if tenants know they are paying toward eventual ownership. If a tenant stays longer than its first five-year lease, it would have 2% of the sale priced paid back as credit on their down payment.

Meanwhile, New York’s Keyway scored a $70M debt facility from multiple banks for its continued acquisition of medical-office properties. Its approach is to purchase buildings from medical groups and lease them back to the sellers. The company is negotiating on $200M worth of properties on behalf of investors, according to the WSJ, with some $50M already invested since the firm’s inception in 2020.

Investors are also looking at short-term rental properties and cold storage as the traditional multifamily and industrial sales markets have seen skyrocketing prices. Looming regulations, rate hikes and record valuations mean many players expect the environment to be more challenging to navigate going forward.

“When rates go up, prices go down, or offers go down and then sales slow,” Meridian Capital Group Senior Managing Director Morris Betesh said at Bisnow’s multifamily event in New York last week. “Not all deals are created equal, and there are going to be fewer deals that make sense, so I think you're going to see transaction volume slow until rates stabilize or tick back down.”