Research - DECEMBER 2, 2020

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Single-tenant medical properties with investment-grade tenants in short supply

by Andrea Zander

In the third quarter, national asking cap rates in the single-tenant medical sector increased to 6.5 percent, according to the 2020 Net Lease Medical Report by The Boulder Group. This represented a 5 basis point increase when compared to the prior year.

“The primary reason for the slight increase in cap rates for the net-lease medical sector is attributed to the higher concentration of non-investment-grade tenants in the sector,” said Randy Blankstein, president, The Boulder Group.

According to the report, non-investment-grade tenanted properties made up 89 percent of the supply in the third quarter. Despite investor concerns surrounding the COVID-19 pandemic for the overall net-lease sector, the net-lease medical sector saw an uptick in transaction volume through the third quarter of 2020.

“When compared to 2019, transaction volume in the third quarter for the net-lease medical sector increased by approximately 6 percent,” added Jimmy Goodman,

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