The ten-year Treasury rose above 5% in September 2026, a level it has reached only once since 2007, briefly in October 2023.¹ With upward pressure on the yield curve, the spread between institutional real estate yields and the ten-year is about a fifth of its long-run average. Similarly, the all-sector NCREIF index yield is approximately 90 basis points less than Baa-rated corporate bonds, which historically yielded a little less than real estate, not more.² The Treasury is a real benchmark again.
Our view is that real estate offers a selective set of opportunities despite elevated benchmark rates, and we believe that as market conditions change, more attractive opportunities are likely to emerge. We see opportunities today where current income or income growth pays for the excess risk over the ten-year Treasury. Where it does not yet, the conditions that would need to change are specific, which we describe in subsequent sections.
The question for each type of real estate is simple: is the investor paid for the risk?
1 Bloomberg. The ten-year Treasury yield traded at 5.01% intraday on September 14, 2026 and 5.00% on September 15, 2026. The ten-year last reached 5% intraday in October 2023; its last close at or above 5% was in July 2007. The 2026 move has been almost entirely a real-yield move: the ten-year rose 83 basis points from December 31, 2025 to September 15, 2026, of which 72 basis points was the ten-year TIPS yield (1.90% to 2.62%) and 13 basis points the breakeven inflation rate.
2 NCREIF NPI all-property transaction cap rate (income yield on properties sold), simple average of NCREIF’s last four quarterly value-weighted rates: 5.56% at 2Q 2026, about 0.6 percentage points above the ten-year on September 15, 2026 (5.00%), against a 2001–2019 average spread of 2.96 points; the current reading is in the bottom 5% of quarterly observations since 2001. Moody’s Baa corporate bond yield 6.48% on September 15, 2026 (FRED series DBAA), 1.48 points above the ten-year, against a 2001–2019 average of 2.66 points. Investment-grade corporate spreads are similarly narrow (ICE BofA U.S. Corporate Index option-adjusted spread 0.78 points on September 15, 2026, against a 2001–2019 average of 1.58). Real estate’s spread to Treasuries has been below the Baa spread in 16 of the 17 quarters since 2Q 2022; over 2001–2019 it averaged 0.30 points above the Baa spread. Before 2022, real estate’s spread was more than half a point below the Baa spread only in 2006–09 and briefly in 2015.
The information herein is provided for educational purposes only and should not be construed as financial or investment advice, nor should any information in this document be relied on when making an investment decision. Opinions and views expressed reflect the current opinions and views of the authors and Apollo Analysts as of the date hereof and are subject to change. Please see the end of this document for important disclosure information.
Important Disclosure Information
This presentation is for educational purposes only and should not be treated as research. This presentation may not be distributed, transmitted or otherwise communicated to others, in whole or in part, without the express written consent of Apollo Global Management, Inc. (together with its subsidiaries, “Apollo”).
The views and opinions expressed in this presentation are the views and opinions of the author(s) of the White Paper. They do not necessarily reflect the views and opinions of Apollo and are subject to change at any time without notice. Further, Apollo and its affiliates may have positions (long or short) or engage in securities transactions that are not consistent with the information and views expressed in this presentation. There can be no assurance that an investment strategy will be successful. Historic market trends are not reliable indicators of actual future market behavior or future performance of any particular investment which may differ materially, and should not be relied upon as such. Target allocations contained herein are subject to change. There is no assurance that the target allocations will be achieved, and actual allocations may be significantly different than that shown here. This presentation does not constitute an offer of any service or product of Apollo. It is not an invitation by or on behalf of Apollo to any person to buy or sell any security or to adopt any investment strategy, and shall not form the basis of, nor may it accompany nor form part of, any right or contract to buy or sell any security or to adopt any investment strategy. Nothing herein should be taken as investment advice or a recommendation to enter into any transaction.
Hyperlinks to third-party websites in this presentation are provided for reader convenience only. There can be no assurance that any trends discussed herein will continue. Unless otherwise noted, information included herein is presented as of the dates indicated. This presentation is not complete and the information contained herein may change at any time without notice. Apollo does not have any responsibility to update the presentation to account for such changes. Apollo has not made any representation or warranty, expressed or implied, with respect to fairness, correctness, accuracy, reasonableness, or completeness of any of the information contained herein, and expressly disclaims any responsibility or liability therefore. The information contained herein is not intended to provide, and should not be relied upon for, accounting, legal or tax advice or investment recommendations. Investors should make an independent investigation of the information contained herein, including consulting their tax, legal, accounting or other advisors about such information. Apollo does not act for you and is not responsible for providing you with the protections afforded to its clients.
Certain information contained herein may be “forward-looking” in nature. Due to various risks and uncertainties, actual events or results may differ materially from those reflected or contemplated in such forward-looking information. As such, undue reliance should not be placed on such information. Forward-looking statements may be identified by the use of terminology including, but not limited to, “may”, “will”, “should”, “expect”, “anticipate”, “target”, “project”, “estimate”, “intend”, “continue” or “believe” or the negatives thereof or other variations thereon or comparable terminology.
The Standard & Poor’s 500 (“S&P 500”) Index is a market-capitalization-weighted index of the 500 largest U.S. publicly traded companies by market value.
Additional information may be available upon request.