| Metric | Details |
|---|---|
| Parent Company | Icahn Automotive Group / Icahn Enterprises L.P. |
| S&P / Moody’s Rating | BB+ / B1 (Icahn Enterprises parent) |
| Investment Grade Status | Non-Investment Grade / High Yield |
| Sector | Auto Service / Tire Retail |
| US Locations | ~900 |
| Cap Rate Range | 7.5–9.0% |
| Typical Lease Term | 10–15 years (NNN) |
| Guarantee Type | Corporate (Icahn Automotive Group LLC) |
| Stock Ticker | IEP (NASDAQ — Icahn Enterprises) |
| Annual Revenue | ~$2.5B (Icahn Automotive segment) |
| Typical Price Range | $1,500,000–$4,000,000 |
Pep Boys Business Overview & NNN Investment Profile
Pep Boys is a century-old automotive aftermarket chain operating approximately 900 locations across the United States and Puerto Rico, offering tire sales, auto maintenance, repair services, and parts retail. Founded in 1921 in Philadelphia, Pep Boys was acquired by Icahn Enterprises L.P. in 2016 for approximately $1.03 billion and now operates as part of Icahn Automotive Group alongside AAMCO and Precision Tune Auto Care.
Pep Boys Credit Rating Analysis
Icahn Enterprises L.P. carries BB+ from S&P at the holding company level, while Moody’s downgraded IEP to B1 in May 2025 amid concerns about the company’s cash flow coverage of interest expense and continued losses at operating subsidiaries. This divergence between S&P and Moody’s is meaningful — Moody’s B1 places IEP deep in non-investment grade speculative territory, while S&P’s BB+ sits at the upper end of high yield. Investors should use the more conservative Moody’s B1 as their primary credit reference.
Pep Boys itself does not carry a separate published rating. The operative guarantee for NNN leases is Icahn Automotive Group LLC, which is an intermediate holding company between IEP and the Pep Boys operating entity. Investors should obtain and review the specific guarantee document to confirm the guarantor entity and evaluate the credit support chain. Understanding the full credit rating spectrum is essential when evaluating non-investment grade NNN tenants.
Pep Boys NNN Lease Structure
Pep Boys NNN leases typically carry 10 to 15 year initial terms with renewal options. Properties are larger-format service centers ranging from 6,000 to 15,000 square feet with multiple service bays, tire mounting equipment, and parts retail space. The tenant handles operating expenses under NNN terms. The specialized service center format limits alternative use and should be evaluated as part of the underwriting process — confirming the location’s viability for re-tenanting if needed.
Pep Boys NNN Cap Rate & Pricing Trends
Pep Boys NNN properties trade at cap rates between 7.5% and 9.0% as of Q1 2026, reflecting the non-investment grade parent rating and the specialized nature of the service center format. The yield premium over investment-grade auto service alternatives like Firestone (BBB+/A3) or AutoZone (BBB/Baa2) typically runs 150 to 250 basis points. Investors seeking above-market current income who are comfortable with the Icahn Enterprises credit profile and conducting thorough location-level underwriting often find compelling relative value in this tier.
Pep Boys NNN Investment: Pros & Cons
| Pros | Cons |
|---|---|
| 100-year brand with national recognition and ~900 locations | Non-IG parent: Moody’s downgraded IEP to B1 in May 2025 |
| High-yield cap rates (7.5–9%) offer significant yield premium | S&P/Moody’s divergence requires conservative underwriting |
| Essential auto service model with recurring customer demand | Specialized format limits re-tenanting optionality |
| Accessible price point for individual investors | Icahn Enterprises operating losses have pressured financials |
Comparable NNN Tenants
| Comparable Tenant | Rating | Cap Rate Range |
|---|---|---|
| Bridgestone / Firestone | BBB+ / A3 | 6.0–7.0% |
| Big O Tires | A‑ / A2 (Sumitomo) | 5.75–7.0% |
| Valvoline | Non-IG / High Yield | 5.5–6.5% |
What is Pep Boys’ credit rating?
Pep Boys is owned by Icahn Enterprises L.P., which carries BB+ from S&P and B1 from Moody’s (downgraded May 2025). Pep Boys NNN leases are guaranteed by Icahn Automotive Group LLC. The Moody’s B1 rating is the more conservative reference and reflects non-investment grade speculative credit quality.
What cap rates are Pep Boys NNN properties trading at?
Pep Boys NNN properties trade at 7.5% to 9.0% cap rates as of Q1 2026, reflecting the non-investment grade parent rating and the yield premium investors require for the elevated credit variability.
Is Pep Boys investment grade?
No. Pep Boys’ parent Icahn Enterprises carries non-investment grade ratings: BB+ at S&P and B1 at Moody’s (as of May 2025). NNN investors seeking investment-grade auto service alternatives should consider Bridgestone/Firestone, AutoZone, O’Reilly, or NAPA backed by Genuine Parts Company.
The Only Pep Boys 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 advisor handling sourcing, underwriting, financing, and closing — and on the majority of transactions, there is no separate fee to you as the buyer.
Find It — We verify the guarantee structure and review the Icahn Automotive Group credit chain before you commit due diligence costs.
Fund It — 150+ lender relationships. Non-IG auto service paper requires the right lender. We match the capital to the credit.
Exit It — Selling a Pep Boys asset? We know the high-yield NNN buyer pool.
Not committed to Pep Boys? Tell us your criteria — cap rate floor, credit tier, lease structure — and we’ll find the deal that fits. The tenant is a variable. Your criteria is the constant.
Get Your Free Pep Boys NNN Consultation →
In a 1031 exchange with a deadline? Tell us your timeline — we move faster.
Related NNN Tenants
Own a Pep Boys 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 Pep Boys 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 Pep Boys NNN transactions and can produce a Broker Opinion of Value within 48 hours reflecting today’s cap rate market.
Own multiple Pep Boys properties? Considering an off-market sale?
Investment Grade represents owners on confidential disposition of Pep Boys portfolios and individual properties through off-market direct-to-principal distribution to specialty REITs, private equity funds, and family offices. Pep Boys 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.
