FedEx represents a unique bond-to-NNN spread opportunity because the company operates across two distinct NNN property types: retail shipping centers (FedEx Office, 2,000 to 5,000 SF) and industrial distribution facilities (50,000 to 500,000+ SF). Both formats are backed by the same BBB / Baa2 corporate credit that prices FedEx senior unsecured bonds at approximately 5.10%, yet NNN cap rates range from 5.50% to 6.50%, producing a nominal spread of 40 to 140 basis points.
For the full 21-company comparison, see the Bond-to-NNN Spread Anchor Page. For the complete FedEx tenant analysis, see the FedEx Credit Rating and NNN Cap Rate page.
FedEx Credit Profile
| Metric | Details |
|---|---|
| S&P Rating / Outlook | BBB / Stable |
| Moody’s Rating / Outlook | Baa2 / Stable |
| Investment Grade Status | Investment Grade |
| Ticker | NYSE: FDX |
| US Facility Count | 5,000+ (retail, ground hubs, freight terminals) |
| Annual Revenue | ~$88 billion (FY2025) |
The Spread: FedEx Bonds vs. NNN
| Metric | FDX Corporate Bond | FDX NNN Property |
|---|---|---|
| Yield / Cap Rate | ~5.10% (5-10yr senior unsecured) | 5.50% to 6.50% |
| Nominal Spread vs. Bond | Baseline | +40 to +140 bps |
| Minimum Investment | ~$1,000 (via broker) | $3,000,000 to $25,000,000+ |
| Liquidity | Sells in seconds | 60 to 120 day sale cycle |
| Income Taxation | Ordinary income (up to ~45.8%) | Sheltered by depreciation |
| 1031 Exchange Eligible | No | Yes |
| Depreciation Deduction | None | 39-year straight line + cost segregation |
| Appreciation Potential | Returns par at maturity | Industrial real estate appreciating strongly |
| Property Types | N/A | Distribution hubs (50K-500K+ SF) and FedEx Office retail (2K-5K SF) |
Bond yield is approximate, derived from FedEx’s BBB/Baa2 rating-tier position relative to the ICE BofA BBB US Corporate Index (~5.29% as of March 19, 2026, per FRED). NNN cap rates from InvestmentGrade.com IG 180 database. This is not investment advice.
Two Formats, One Credit, One Spread
FedEx NNN properties come in two fundamentally different formats, each with distinct investment characteristics. FedEx Ground distribution hubs and FedEx Freight terminals are large industrial facilities (50,000 to 500,000+ SF) on 10 to 50+ acre sites. These properties carry 10 to 20 year absolute NNN leases with corporate guarantees from FedEx Corporation. Cap rates for these facilities typically range from 5.50% to 6.00%, tighter than the small-format FedEx Office locations because the industrial format has strong alternative-use potential and benefits from the secular growth in e-commerce logistics demand.
FedEx Office retail locations are small-format (2,000 to 5,000 SF) storefronts in retail centers and office parks. These carry the same FedEx corporate guarantee but price at wider cap rates (6.00% to 6.50%) due to the smaller building size and more limited alternative use. Both formats produce a positive spread over FedEx bonds, but the industrial format offers the additional advantage of real estate appreciation driven by logistics demand that shows no sign of reversing.
The E-Commerce Tailwind
FedEx’s NNN investment case is strengthened by the structural growth in e-commerce package volume. Every percentage point of retail sales that shifts from in-store to online increases demand for FedEx’s distribution infrastructure. This tailwind supports both the bond credit (revenue growth, cash flow stability) and the NNN real estate (lease renewal probability, residual value appreciation). Bond investors capture this growth through credit stability. NNN investors capture it through both credit stability and property appreciation, since industrial logistics real estate in strategic distribution corridors has been one of the best-performing commercial real estate segments of the past decade.
For bond investors who already hold FedEx debt and believe in the e-commerce growth thesis, adding FedEx NNN distribution facilities to a portfolio provides the same credit exposure with 40 to 140 basis points of additional yield, tax-advantaged income through depreciation, and direct participation in the industrial real estate appreciation that e-commerce demand drives.
As of Q1 2026, the nominal spread is approximately 40 to 140 basis points. FedEx bonds yield roughly 5.10% while NNN properties trade at 5.50% to 6.50% cap rates. Industrial distribution hubs price at the tighter end of the range (5.50% to 6.00%) while FedEx Office retail locations price wider (6.00% to 6.50%).
FedEx Ground distribution hubs offer lower cap rates but stronger appreciation potential and better re-tenanting alternatives due to the industrial format. FedEx Office retail locations offer higher cap rates but carry more format-specific risk. Both are backed by identical FedEx Corporation credit. The choice depends on whether the investor prioritizes current yield (Office) or total return including appreciation (distribution).
UPS carries a stronger credit rating (A- / A2, two notches above FedEx’s BBB / Baa2) and its bonds yield approximately 25 to 30 basis points less. UPS NNN properties trade at similar cap rates to FedEx, meaning the bond-to-NNN spread for UPS is slightly wider. Both logistics tenants benefit from the same e-commerce tailwinds. Diversifying across both provides tenant and credit tier diversification within the logistics NNN sector.
Considering FedEx NNN?
We source FedEx NNN properties nationally, including distribution hubs and FedEx Office locations. On the majority of transactions, the listing broker pays a cooperating commission, so there is typically no separate fee to you as the buyer.
Find It — FedEx distribution facilities and retail locations with corporate guarantees.
Fund It — BBB/Baa2 credit with strong lender appetite for logistics NNN.
Exit It — Industrial NNN has deep institutional buyer demand. Strong exit liquidity.
Exchange It — FedEx price points fit mid-to-large 1031 exchanges.
