| Metric | Details |
|---|---|
| Parent Company | Hertz Global Holdings, Inc. |
| S&P / Moody’s Rating | B / B2 (Negative Outlook) |
| Investment Grade Status | Non-Investment Grade / High Yield |
| Sector | Car Rental / Mobility Services |
| Brands | Hertz, Dollar, Thrifty, Firefly |
| Cap Rate Range | 8.0–10%+ |
| Typical Lease Term | 10–15 years (NNN or Ground Lease) |
| Guarantee Type | Corporate (The Hertz Corporation) |
| Stock Ticker | HTZ (NASDAQ) |
| Annual Revenue | ~$9.0B (FY2024 est.) |
| Typical Price Range | $1,000,000–$4,000,000 |
Hertz Business Overview & NNN Investment Profile
Hertz Global Holdings operates the Hertz, Dollar, Thrifty, and Firefly car rental brands across more than 11,000 locations in 160 countries. Despite being one of the most recognizable names in car rental, Hertz’s credit profile has deteriorated significantly in the post-bankruptcy normalization period. S&P affirmed a B rating with negative outlook in June 2025, and Moody’s affirmed B2 with negative outlook in May 2025 — ratings that place Hertz deep in speculative grade territory, well below the BBB‑/Baa3 investment grade threshold.
Hertz Credit Rating Analysis
Hertz’s current B/B2 ratings with negative outlook represent one of the most challenged credit profiles among publicly recognized car rental brands. The company’s post-bankruptcy emergence in 2021 raised hopes of credit improvement, but the combination of premature EV fleet expansion (purchasing approximately 100,000 Tesla vehicles that were subsequently sold at significant losses), normalized used car residual values, and rising fleet financing costs compressed operating margins materially in 2023 and 2024.
The negative outlook from both S&P and Moody’s signals the possibility of further downgrades, which would further impair lease value and lender willingness to finance these assets. Default probability metrics have trended upward from post-emergence lows, indicating rising market concern about the company’s ability to manage its vehicle fleet economics in a normalized pricing environment. Investors considering Hertz NNN properties should review the most current quarterly financials and analyst reports before proceeding.
The contrast with Avis Budget — which carries BB+/Ba1 and has demonstrated superior fleet management — is stark. Hertz’s credit trajectory has moved in the opposite direction, making it a higher-risk NNN tenant even within the below-investment grade car rental category. Understanding the full credit rating spectrum is essential for investors evaluating any speculative-grade NNN tenant.
Hertz NNN Lease Structure
Hertz NNN leases at airport and off-airport locations typically carry 10 to 15 year initial terms. Airport locations carry higher strategic value due to captive traffic and regulatory barriers to entry, while off-airport suburban sites offer more real estate flexibility but less operational protection. The corporate guarantee from The Hertz Corporation backs these leases, though given the negative outlook and prior bankruptcy, lenders apply heightened scrutiny to Hertz-secured financing.
Hertz NNN Cap Rate & Pricing Trends
Hertz NNN properties trade at cap rates of 8.0% to 10%+ as of Q1 2026, with the high end applying to off-airport locations, shorter remaining lease terms, and properties where the credit deterioration is most visible in lender underwriting. The significant yield premium over investment-grade NNN assets reflects the elevated default risk and reduced lender appetite that comes with B/B2 negative outlook ratings.
For investors comfortable with the risk profile and conducting thorough due diligence on the company’s financial trajectory, the higher cap rates offer substantial yield premium over investment-grade alternatives. Airport-located Hertz facilities with long remaining lease terms represent the most defensible assets in this segment.
Hertz NNN Investment: Pros & Cons
| Pros | Cons |
|---|---|
| Higher cap rates (8–10%+) offer significant yield premium | B/B2 negative outlook — prior bankruptcy, continued deterioration |
| Globally recognized brand with airport location presence | Fleet cost and EV write-down history signals execution risk |
| Airport locations have strategic irreplaceable value | Negative outlook signals further downgrade risk |
| Significant discount to IG alternatives may create value plays | Limited lender appetite increases financing difficulty and cost |
What is Hertz’s current credit rating?
As of Q1 2026, Hertz carries a B rating from S&P (affirmed June 2025, negative outlook) and B2 from Moody’s (affirmed May 2025, negative outlook). Both agencies maintain negative outlooks, signaling the possibility of further downgrades. This places Hertz significantly below the BBB‑/Baa3 investment grade threshold.
Did Hertz file for bankruptcy?
Yes. Hertz filed for Chapter 11 bankruptcy protection in May 2020 during the COVID-19 pandemic and emerged from bankruptcy in June 2021 after restructuring its debt and recapitalizing the business. Despite the emergence, the company’s credit profile has subsequently deteriorated, driven by EV fleet losses and fleet cost normalization challenges.
What cap rates are Hertz NNN properties trading at?
Hertz NNN properties trade at 8.0% to 10%+ cap rates as of Q1 2026, reflecting the elevated credit risk from B/B2 negative outlook ratings. Airport-located properties with long remaining lease terms trade at the lower end; suburban off-airport sites with shorter terms can trade at 10%+.
Evaluating High-Yield NNN Opportunities? We Can Help You Assess the Risk.
Hertz carries significant below-investment grade credit risk. If you’re evaluating high-yield NNN opportunities and want to understand the full risk-reward spectrum, our team can help you identify whether the yield premium justifies the credit exposure — or identify alternative investment-grade NNN options that better fit your criteria.
Get Your Free NNN Credit Consultation →
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Related NNN Tenants
Own a Hertz Property? Capital Markets Strategies Beyond Selling
Maturing debt and considering refinancing? Our capital markets team maintains 150+ lender relationships underwriting NNN properties across investment-grade and non-investment-grade credit tiers. We structure rate-and-term refinancing, cash-out refis, and bridge-to-perm takeouts.
Evaluating a 1031 exchange or disposition? We represent both sides of Hertz NNN transactions — whether you are looking to exit at peak value, exchange into a higher-quality credit tenant, or reposition within the same sector.
Need a current valuation? We maintain live comps on Hertz NNN transactions and can produce a Broker Opinion of Value within 48 hours reflecting today’s cap rate market.
Own multiple Hertz properties? Considering an off-market sale?
Investment Grade represents owners on confidential disposition of Hertz portfolios and individual properties through off-market direct-to-principal distribution to specialty REITs, private equity funds, and family offices. Hertz buyer demand runs deep, and portfolio sales consistently produce stronger pricing than sequential individual sales because the institutional buyer pool is structured around portfolio acquisition.
For multi-property owners considering a portfolio disposition, see Selling Investment Grade NNN Off-Market: Tenant-by-Tenant Buyer Demand. For the full off-market framework covering individual property dispositions, sale-leasebacks, and 1031 coordination, see Off-Market CRE Sales: The Complete 2026 Guide.
The pre-listing conversation is at no cost and fully confidential. Email team@investmentgrade.com or see contact Investment Grade.
