This page was originally a sector report card for the first quarter of 2025. In October 2026 it was rebuilt as a grading framework: the 2025 grades and year-to-date return figures were removed because they are out of date, and current grades are available from our research affiliate.
REIT property sectors behave very differently. A useful report card grades each sector on the same handful of questions: how durable its income is, how sensitive it is to the economy and to interest rates, how much capital it needs, and how strong the balance sheets of its leading companies are. This page sets out those criteria by sector, with credit ratings for leading REITs verified from their 2026 SEC filings. For an introduction to REIT credit, see investment grade REITs; for the rating scale, the investment grade guide. See also our investment grade net lease research.
Looking for current letter grades? Our research affiliate REIT Rankings grades listed U.S. REITs A through D on a published five-pillar methodology, with sector leaderboards.
The Grading Criteria
| Criterion | What to look at |
|---|---|
| Income durability | Lease length, occupancy, tenant credit, and how quickly rents reset |
| Economic sensitivity | How revenue behaves in a recession: daily-reset businesses such as hotels are most sensitive |
| Interest rate sensitivity | Long fixed leases and high leverage make value more rate sensitive |
| Capital intensity | Development, maintenance capital and tenant improvement costs |
| Supply | New construction relative to demand in the sector |
| Balance sheet | Leverage, fixed charge coverage, debt maturities and credit ratings |
| Valuation | Price to FFO or AFFO relative to the sector’s own history and growth, and price relative to net asset value |
Sector by Sector
| Sector | Key questions | Example REITs and verified ratings (S&P / Moody’s) |
|---|---|---|
| Net lease | Tenant credit, lease term, acquisition spreads over cost of capital | Realty Income A‑ / A3; Agree Realty BBB+ / Baa1; NNN REIT BBB+ / Baa1; W. P. Carey BBB+ / Baa1 |
| Industrial | Market rent growth vs. in-place rents, new supply, e-commerce and supply-chain demand | Prologis A / A2 |
| Healthcare and senior housing | Senior housing occupancy and operating margins, reimbursement, outpatient demand | Welltower A‑ / A3; Ventas BBB+ / Baa1 |
| Retail | Occupancy, leasing spreads, store closures, anchor tenant health | Simon Property Group A / A3 |
| Residential | New supply, rent growth, insurance and operating costs | Equity Residential A‑ / A3 |
| Self-storage | Street rates, housing turnover, new supply | Public Storage A / A2 |
| Gaming and experiential | Master lease coverage, operator credit, escalators | VICI Properties BBB‑ / Baa3 |
| Data centers | Power availability, development spending, hyperscale and AI demand | Not shown; check current ratings |
| Cell towers | Carrier spending, lease escalators, leverage | Not shown; check current ratings |
| Office | Net absorption, vacancy, conversion and capital needs | Not shown; check current ratings |
| Hotels | RevPAR, labor costs, economic sensitivity | Not shown; check current ratings |
| Manufactured housing, farmland, billboards | Regulation, insurance costs, niche demand drivers | Not shown; check current ratings |
Ratings are senior unsecured ratings from each REIT’s 2026 SEC filings or earnings materials (Realty Income Form 10-Q for June 30, 2026; Agree Realty, Simon Property Group and VICI second quarter 2026 supplementals; NNN REIT fourth quarter 2025 supplemental; W. P. Carey and Prologis Forms 10-Q for June 30, 2026; Public Storage second quarter 2026 earnings release; Equity Residential Form 10-K for 2025; Welltower fourth quarter 2025 earnings release; Ventas 2026 proxy statement). Ratings change; confirm before relying on them.
Sectors with long leases and strong tenants, such as net lease, tend to be the most stable but are the most sensitive to long-term interest rates. Sectors with daily or monthly pricing, such as hotels and self-storage, respond faster to the economy. Office continues to face structural demand questions from hybrid work. Data centers and towers depend heavily on technology spending and capital availability.
Interest Rates and REITs
REIT valuations are sensitive to long-term rates. The 10-year Treasury yield is 5.24% and the ICE BofA BBB corporate index yields 6.19% as of October 1, 2026. Compare a REIT’s dividend yield and expected growth with those yields, and with the cost of its own debt, when judging valuation.
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Frequently Asked Questions
Which REIT sectors are the most interest rate sensitive?
Sectors with long fixed leases and higher leverage, such as net lease, tend to be most sensitive to long-term rates. Hotels and self-storage reprice faster and are more sensitive to the economy.
Where can I find current REIT grades?
Our research affiliate REIT Rankings publishes A through D grades for listed U.S. REITs on a five-pillar methodology. Credit ratings for leading REITs are in the table on this page and on our investment grade REITs page.
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 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.
