| Parent Company | Bed Bath & Beyond Inc. |
| Rating | BB+ / Ba1 |
| Sector | Off-Price Retail |
| US Locations | 880 |
| Cap Rate Range | 6.5% – 7.5% |
| Lease Term | 12 years |
| Guarantee | Corporate |
| Ticker | BBBY |
| Annual Revenue | $9.2B |
| Price Range | $900,000 – $2,200,000 |
Business Overview
Burlington maintains below-investment-grade credit ratings of BB+ / Ba1, indicating elevated financial risk and higher default probability compared to investment-grade tenants. These ratings reflect challenges in the off-price retail sector, competitive margin pressure, and evolving consumer preferences. While corporate guarantees from Bed Bath & Beyond provide some protection, net lease investors should carefully evaluate the elevated risk profile. Learn more about investment-grade credit ratings and how credit quality impacts net lease property valuation and investor risk exposure.
Lease Structure & Terms
Burlington operates on 12-year corporate-guaranteed net lease agreements, with shorter terms reflecting the company’s below-investment-grade credit ratings. The lease includes triple net obligations covering property taxes, insurance, and maintenance. Corporate guarantee from Bed Bath & Beyond provides some performance stability, though credit quality concerns warrant careful monitoring. This structure is appropriate for investors comfortable with elevated risk profiles in exchange for higher yield potential.
Cap Rate Analysis & Real Estate Value
Burlington properties command cap rates between 6.5% and 7.5%, reflecting the company’s BB+/Ba1 below-investment-grade credit ratings and elevated risk profile. Cap rate ranges vary by property location, lease commencement date, and market conditions. These higher yields compensate investors for below-investment-grade credit risk. Typical property values range from $900K to $2.2M, depending on location, property condition, and lease terms. Investors seeking higher yields must carefully weigh the elevated default risk and potential for covenant breaches.
Real Estate Footprint & Strategic Locations
With 880 operating locations, Burlington maintains a real estate presence across diverse retail markets throughout the United States. The company operates in metropolitan and secondary markets with varying demographic characteristics. Burlington locations represent discount fashion and home goods infrastructure in competitive, value-focused consumer markets. For net lease investors, these properties carry higher concentration risk and require careful due diligence on individual property performance.
Company Growth & Market Position
Bed Bath & Beyond generates approximately $9.2B in annual revenue through its diversified retail portfolio. The company faces significant challenges from e-commerce disruption, changing consumer preferences, and competitive margin pressure. Operational restructuring and cost control initiatives attempt to stabilize performance. Below-investment-grade BB+/Ba1 ratings reflect market concerns about long-term sustainability and financial viability in a challenging retail environment.
Pros and Cons for Net Lease Investors
| Pros | Cons |
|---|---|
| Higher cap rates (6.5%-7.5%) for income yield | Below-investment-grade BB+/Ba1 ratings |
| Established 880-location retail footprint | Significant e-commerce and retail disruption |
| Off-price retail value positioning | Elevated default risk and covenant breach potential |
| Potential for turnaround scenarios | Margin pressure in discount retail sector |
| 12-year lease terms | Shorter lease terms reflect credit concerns |
| Opportunity for distressed investors | Structural challenges in traditional retail |
Comparable Tenants in NNN Sector
| Tenant | Rating | Cap Rate Range | Locations |
|---|---|---|---|
| Kohl’s (KSS) | B+ / B2 | 7.5% – 8.75% | 1,150 |
| Ross Dress for Less | A‑ / A3 | 5% – 5.75% | 1,650 |
| TJ Maxx (TJX) | A / A2 | 4.75% – 5.5% | 1,275 |
| Bed Bath & Beyond (BBBY) | BB+ / Ba1 | 6.5% – 7.5% | Integrated |
Frequently Asked Questions
What is Burlington’s credit rating?
Burlington maintains below‑investment‑grade ratings of BB+ from S&P and Ba1 from Moody’s. These ratings indicate elevated financial risk and higher default probability compared to investment‑grade tenants rated BBB‑ or above.
What cap rates do Burlington NNN properties offer?
Burlington net lease properties typically trade at cap rates between 6.5% and 7.5%, reflecting the below‑investment‑grade credit profile and elevated risk premium relative to investment‑grade retail tenants like TJ Maxx or Ross.
Is Burlington a good NNN investment?
Burlington may suit investors comfortable with below‑investment‑grade credit risk who seek higher yields. The 6.5%–7.5% cap rate range compensates for elevated default probability. Careful due diligence on lease terms, location quality, and the parent company’s financial trajectory is essential before investing.
What lease terms does Burlington offer on NNN properties?
Burlington operates on 12‑year corporate‑guaranteed triple net lease agreements. The shorter term relative to investment‑grade tenants reflects the company’s credit profile. Leases include standard NNN obligations covering property taxes, insurance, and maintenance.
How does Burlington compare to other off‑price retail NNN tenants?
TJ Maxx (A‑/A2) and Ross (BBB/Baa2) both carry investment‑grade ratings and trade at lower cap rates of 4.75%–6.0%. Burlington’s BB+/Ba1 ratings place it below the investment‑grade threshold, resulting in higher yields but greater credit risk. Kohl’s (B+/B2) carries even higher risk and higher cap rates of 7.5%–8.75%.
The Only Burlington NNN Advisor Whose Fee Comes From the Deal, Not From You
In NNN buyer representation, the listing broker pays the cooperating commission. That means you get a dedicated Burlington NNN advisor handling sourcing, underwriting, financing, and closing — and on the majority of transactions, there is no separate fee to you as the buyer.
Here’s what that buys you:
Find It — On-market and off-market Burlington NNN properties sourced and underwritten on your behalf. We know which markets are pricing correctly, which listings are overpriced for what the lease actually says, and where the spread is worth the move.
Fund It — Acquisition financing through 150+ lender relationships: life companies, CMBS, regional banks, and credit unions that know Burlington-grade paper. Not the first approval that comes back. The best terms on the table for this specific credit and lease structure.
Exit It — Selling a Burlington asset or repositioning through a 1031? Our Capital Markets desk runs a quiet, targeted process. Private investors, family offices, and institutional buyers who are actively acquiring Burlington net lease — not a public blast that signals desperation to the market.
Not committed to Burlington? Tell us your criteria — cap rate floor, credit tier, lease structure, geography, equity check size — and we’ll find the deal that fits. We represent investors across the full NNN credit spectrum, from QSR and pharmacy to industrial, medical, and big box retail. The tenant is a variable. Your criteria is the constant.
Get Your Free Burlington NNN Consultation →
In a 1031 exchange with a deadline? Tell us your timeline — we move faster.
