National asking cap rates in the single-tenant medical sector increased to 6.50%, according to The Boulder Group's 2020 Net Lease Medical Report. That was a 5-basis point increase when compared to the prior year.

Non-investment grade tenanted properties made up 89% of the supply in the third quarter, explaining part of the increase. Investment-grade medical has a 5.93% cap rate.

"When COVID hit in Q2 and Q3, people snapped up almost all the investment-grade product that was out there and left the non-investment grade product," says Randy Blankstein, president of The Boulder Group. "There was a flight to safety, and everyone understood that investment-grade medical was going to fare well during COVID. So there was a big rush into that space, leaving very little product today. And that's why it looks like cap rates went up even though it's not an apples-to-apples comparison." Even with much of the investment-grade medical properties taken off the market, the net lease medical sector saw a 6% uptick in transaction volume through the third quarter of 2020.