REIT investment grade bonds are senior unsecured notes issued by real estate investment trusts that own income-producing commercial real estate and carry ratings of BBB‑ or higher from S&P Global Ratings or Fitch, or Baa3 or higher from Moody’s. They matter to investment grade real estate investors because the properties behind a net lease REIT’s balance sheet are the same kinds of properties individual buyers own directly. A REIT bond is not a pass-through of lease payments, though: it is a contractual claim on the REIT under its bond indenture, paid ahead of dividends to shareholders, and supported by the cash flow of the whole portfolio.
This page covers how REIT bonds are priced, ratings for the main issuers verified from their own SEC filings, the largest issuers by subsector, and how a net lease REIT bond compares with owning a net lease property directly. For the broader market, see the investment grade bonds hub; for the method behind comparing bonds and real estate on credit, duration, liquidity, collateral, and tax treatment, see Investment Grade Thinking; for the tenant side, see the tenant ratings database.
REIT Bond Yields Today
Most REIT bonds are rated in the A and BBB categories, so the ICE BofA index yields for those categories are a useful benchmark. As of October 1, 2026, the A-rated US corporate index yielded 5.84% (spread 73 bps) and the BBB-rated index yielded 6.19% (spread 106 bps). An individual REIT bond can trade above or below its rating category depending on maturity, the REIT’s property type, and its leverage. Daily figures for every rating category are on the investment grade bonds hub.
Verified Ratings for Major REIT Issuers
The ratings below are taken from each REIT’s own SEC filings for the second quarter of 2026. Ratings and outlooks change; check the latest filing or the rating agency before investing. n/a means the filing did not report a rating from that agency.
| REIT (ticker) | S&P | Moody’s | Fitch | Source |
|---|---|---|---|---|
| Realty Income (O) | A‑ (Stable) | A3 (Stable) | A (Stable) | Form 10-Q for the quarter ended June 30, 2026, filed August 6, 2026; Fitch rating assigned August 3, 2026 |
| Prologis (PLD) | A (Stable) | A2 (Stable) | n/a | Form 10-Q for the quarter ended June 30, 2026 |
| Public Storage (PSA) | A | A2 | n/a | Second quarter 2026 earnings release, July 29, 2026 |
| Simon Property Group (SPG) | A (Stable) | A3 (Positive) | n/a | Second quarter 2026 supplemental information (senior unsecured) |
| Agree Realty (ADC) | BBB+ (Stable) | Baa1 (Stable) | A‑ (Stable) | Second quarter 2026 supplemental, July 30, 2026 |
| W. P. Carey (WPC) | BBB+ | Baa1 | n/a | Form 10-Q for the quarter ended June 30, 2026 (senior unsecured notes) |
| Broadstone Net Lease (BNL) | BBB | Baa2 | n/a | Form 10-Q for the quarter ended June 30, 2026 |
| VICI Properties (VICI) | BBB‑ (Stable) | Baa3 (Stable) | BBB‑ (Stable) | Second quarter 2026 financial supplement, July 29, 2026 |
Why REIT Bonds Trade the Way They Do
The distribution requirement limits retained cash. A REIT must distribute at least 90 percent of its taxable income to shareholders to keep its tax status. That avoids corporate income tax at the REIT level but leaves less cash for reinvestment, so REITs fund growth largely by issuing debt and equity. Their credit is therefore more sensitive to capital market conditions than that of a typical industrial company.
Unsecured debt backed by a property pool. Investment grade REITs mostly issue unsecured bonds. Their indentures typically limit total debt and secured debt as a share of assets and require a pool of unencumbered properties well in excess of unsecured debt. Those covenants, and the residual value of the real estate, are part of why rating agencies allow REITs to carry investment grade ratings at their leverage levels.
Rates matter twice. Higher interest rates raise a REIT’s refinancing costs and can push cap rates up and property values down, which raises leverage measured against asset values. Falling rates help on both counts.
REIT-specific metrics. Analysts focus on funds from operations, fixed charge coverage, debt to total assets, net debt to EBITDA, and unencumbered asset coverage. Each rating agency publishes a REIT methodology that differs from its approach to industrial companies.
Themes Shaping REIT Credit
Net lease consolidation
Realty Income completed its merger with VEREIT in November 2021 and its acquisition of Spirit Realty Capital in January 2024. STORE Capital was taken private by GIC and Oak Street, a transaction completed on February 3, 2023. Larger net lease platforms have lower costs of capital, which helps them compete for the same properties individual investors buy.
Take-privates
Private capital has bought several public REITs. Apartment Income REIT (AIR Communities) was acquired by Blackstone Real Estate Partners X in a transaction completed June 28, 2024. Take-private deals can leave bondholders with debt of a private company; check change-of-control protections in the indenture.
Data centers and towers
Data center and tower REITs have long-term leases with large technology and telecom tenants. Demand for artificial intelligence computing has supported data center leasing, while tower REITs depend on wireless carrier spending.
Office bifurcation
Office REITs with newer buildings in strong markets have held up better than owners of older, commodity office space, and bond pricing has separated accordingly. Portfolio quality matters more than the sector label.
Malls and gaming
Simon Property Group’s senior unsecured debt is rated A by S&P and A3 (positive outlook) by Moody’s per its second quarter 2026 supplemental. Gaming REIT VICI Properties holds BBB‑ / Baa3 / BBB‑ ratings; its leases to casino operators are triple net, but tenant concentration is much higher than in a diversified net lease REIT.
Major REIT Bond Issuers by Subsector
The roster below lists large unsecured bond issuers in each REIT subsector. It does not show ratings, which change; ratings verified from issuer filings are in the table above. Confirm the current rating with the agency or the REIT’s investor relations page before investing.
| Subsector | Issuers (ticker) |
|---|---|
| Net lease | Realty Income (O); Agree Realty (ADC); W. P. Carey (WPC); NNN REIT (NNN); Essential Properties Realty Trust (EPRT); Broadstone Net Lease (BNL); LXP Industrial Trust (LXP) |
| Industrial | Prologis (PLD); Rexford Industrial (REXR); First Industrial Realty Trust (FR); EastGroup Properties (EGP); STAG Industrial (STAG) |
| Apartments | AvalonBay Communities (AVB); Equity Residential (EQR); Mid-America Apartment Communities (MAA); Camden Property Trust (CPT); Essex Property Trust (ESS); UDR (UDR) |
| Self-storage | Public Storage (PSA); Extra Space Storage (EXR); CubeSmart (CUBE) |
| Data centers and towers | Equinix (EQIX); Digital Realty Trust (DLR); American Tower (AMT); Crown Castle (CCI) |
| Health care | Welltower (WELL); Ventas (VTR); Healthpeak Properties (DOC); Healthcare Realty Trust (HR); Omega Healthcare Investors (OHI) |
| Shopping centers | Federal Realty Investment Trust (FRT); Regency Centers (REG); Kimco Realty (KIM); Brixmor Property Group (BRX); Phillips Edison & Company (PECO) |
| Malls and outlets | Simon Property Group (SPG); Tanger (SKT) |
| Office | BXP (BXP); Highwoods Properties (HIW); Cousins Properties (CUZ); Kilroy Realty (KRC) |
| Lodging | Host Hotels & Resorts (HST) |
| Gaming and specialty | VICI Properties (VICI); Gaming and Leisure Properties (GLPI); Sun Communities (SUI); Alexandria Real Estate Equities (ARE). Iron Mountain (IRM) is a large REIT bond issuer rated below investment grade. |
The Bond-to-NNN Bridge for REITs
A net lease REIT bond and a directly owned net lease property draw on similar real estate, but they are different claims. The bondholder lends to the REIT and is paid interest under the indenture before shareholders receive dividends; the REIT’s operating costs and other debt sit alongside that claim. The direct owner receives rent from one tenant, bears that property’s risks, and gets the tax treatment of real estate.
| Vehicle | Yield measure today | Diversification | Tax treatment | Liquidity |
|---|---|---|---|---|
| Net lease REIT bond rated in the A category (for example, Realty Income) | A index yield 5.84% | Claim on the whole REIT, backed by thousands of properties | Interest is ordinary income | Trades over the counter through dealers; pricing varies by issue |
| Net lease REIT bond rated in the BBB category (for example, Agree Realty or W. P. Carey) | BBB index yield 6.19% | Claim on the whole REIT | Interest is ordinary income | Trades over the counter through dealers |
| Direct NNN property leased to Dollar General | Median asking cap rate 7.00% | One tenant, one location | Building depreciation (not land), 1031 exchange eligible | Weeks to months to sell |
| Direct NNN property leased to Walmart | Median asking cap rate 5.13% | One tenant, one location | Building depreciation (not land), 1031 exchange eligible | Weeks to months to sell |
Index yields: ICE BofA US Corporate A and BBB effective yields via FRED, as of October 1, 2026; individual REIT bonds trade above or below their category. Median asking cap rates: active listings InvestmentGrade.com tracks; asking cap rates are not closed-sale cap rates. Listed REIT shares and bond ETFs trade on exchanges; individual bonds generally do not.
See the bond-to-NNN spread table for the tenant-by-tenant comparison.
Risks for REIT Bonds
Refinancing. Debt issued at low rates in 2020 and 2021 is maturing into higher rates. Large REITs with staggered maturities are better placed than smaller issuers with concentrated near-term maturities.
Property values. Rising cap rates lower property values and raise leverage measured against assets, even before operations weaken.
Property type. Office demand, skilled nursing operator credit, hotel cyclicality, and department store anchors are risks specific to their subsectors.
Tenant concentration. Diversified net lease REITs spread rent across many tenants, while gaming REITs depend on a few casino operators. Check each REIT’s top tenant list in its supplemental.
Tax status and capital allocation. REITs must keep meeting REIT qualification rules, and acquisitions or development at poor returns can weaken credit metrics.
Frequently Asked Questions
What do investment grade REIT bonds yield?
REIT bonds trade near the yields of their rating category, adjusted for maturity, property type, and leverage. As of October 1, 2026, the ICE BofA A-rated US corporate index yielded 5.84% and the BBB-rated index 6.19%. Check a specific bond’s price and yield to maturity through a brokerage or FINRA’s bond data.
Are REIT bonds secured by the properties?
Usually not. Most investment grade REIT bonds are senior unsecured obligations. Holders rely on the REIT’s overall cash flow and on indenture covenants that cap total and secured debt and require a pool of unencumbered properties. Mortgage debt on specific properties ranks ahead of unsecured bonds for those properties.
How does a net lease REIT bond compare with owning an NNN property directly?
The bond is a diversified, liquid claim on the REIT with interest taxed as ordinary income. A direct property concentrates risk in one tenant and location but can yield more, offers depreciation of the building and 1031 exchange deferral, and takes longer to sell. Today the median asking cap rate on Dollar General listings is 7.00%, against a BBB index yield of 6.19%.
Which REITs have the highest ratings?
Among the issuers in our verified table, Prologis, Public Storage, and Simon Property Group carry A ratings from S&P, and Realty Income carries A‑ from S&P, A3 from Moody’s, and A from Fitch, according to their second quarter 2026 filings. No U.S. REIT in that table is rated in the AA or AAA categories.
What happens if a REIT is downgraded below investment grade?
Investors limited to investment grade may sell, spreads usually widen, and the REIT’s borrowing costs rise, which can pressure credit metrics further. Some REITs have regained investment grade ratings after reducing leverage; VICI Properties, for example, now holds investment grade ratings from S&P, Moody’s, and Fitch.
REIT Bond Investor or Direct NNN Buyer?
InvestmentGrade.com represents buyers and sellers of net lease real estate, the same kinds of properties that sit inside net lease REITs. If you hold REIT bonds and want to compare direct ownership, or own net lease property and want REIT market context, we can walk through both.
On the majority of NNN transactions, the listing broker pays a cooperating commission, so there is typically no separate fee to you as the buyer for professional representation.
Find it: on market and off market net lease properties, sourced and underwritten.
Fund it: acquisition, refinance, and recapitalization financing through our lender relationships.
Exit it: a buyer pool that includes REITs, family offices, funds, and 1031 exchange buyers.
Exchange it: 1031 exchanges into or out of net lease property, run against the deadlines.
Educational content only. InvestmentGrade.com is a commercial real estate brokerage and educational publisher. We do not sell, broker, underwrite, or solicit any bonds, securities, or investment products. Yields, ratings, and prices referenced are approximate, fluctuate continuously, and are sourced from public market data as of the date noted. Nothing on this page constitutes investment advice, an offer to sell, or a solicitation to buy any security. Consult a licensed broker-dealer, registered investment advisor, or tax professional before making any investment decision. For SEC investor education, visit investor.gov.
