AutoZone describes itself as a leading retailer and distributor of automotive replacement parts and accessories in the Americas, with 6,863 U.S. stores as of August 29, 2026, and it is a frequent NNN tenant: we track 34 active AutoZone listings. Its BBB/Baa1 ratings are investment grade. In July 2026 AutoZone priced $850 million of 4.950% senior notes due 2031 to yield 4.971%, about 53 basis points below the median asking cap rate of about 5.5% on the active AutoZone listings we track (middle half 5.0% to 6.0%, as of October 4, 2026). Bond yields have risen since: the ICE BofA BBB US Corporate Index effective yield climbed from 5.44% on July 7 to 6.19% on October 1, 2026 (FRED). If AutoZone’s notes moved with the index, they would yield roughly 5.7% today, slightly above the median AutoZone asking cap rate. At current rates, the NNN premium over AutoZone’s own bonds has largely disappeared at the median and remains positive mainly for listings in the upper part of the range.
For the full multi-company comparison, see the bond-to-NNN spread analysis. For the complete AutoZone tenant analysis, see the AutoZone Credit Rating and NNN Cap Rate page.
AutoZone Credit Profile
| Metric | Details |
|---|---|
| S&P Rating / Outlook | BBB |
| Moody’s Rating / Outlook | Baa1 |
| Investment Grade Status | Investment Grade |
| Ticker | NYSE: AZO |
| US Store Count | 6,863 (Aug. 29, 2026) |
| Annual Net Sales | $20.3 billion (fiscal 2026) |
| Total Debt | ~$9.1 billion (Aug. 29, 2026) |
The Spread: AutoZone Bonds vs. NNN
| Metric | AZO Corporate Bond | AZO NNN Property |
|---|---|---|
| Yield / Cap Rate | 4.97% at pricing (July 7, 2026); roughly 5.7% if it tracked the BBB index to Oct. 1, 2026 | ~5.5% median asking (5.0% to 6.0% middle half) |
| Nominal Spread vs. Bond | Baseline | About +53 bps vs. the yield at pricing; roughly -20 bps vs. the index-adjusted estimate (-70 to +30 bps across the middle half) |
| Minimum Investment | $2,000 minimum denomination (this issue) | ~$1.3M to $2.8M (middle half of asking prices, October 2026) |
| Liquidity | Tradable on business days through a broker; individual issues can trade thinly | Weeks to months to sell; timing varies with the lease and market |
| Income Taxation | Ordinary income (up to ~45.8% combined in our model) | Partly sheltered by building depreciation when the investor owns the building (land is not depreciable) |
| 1031 Exchange Eligible | No | Yes |
| Depreciation Deduction | None | 39-year straight line on the building, plus cost segregation; none on a ground lease |
| Appreciation Potential | Returns par at maturity | Real estate value can rise or fall |
| Typical Lease Structure | N/A (debt instrument) | Absolute NNN, fee simple or ground lease; confirm tenant entity and guaranty |
Bond yield at pricing for AutoZone’s 4.950% senior notes due 2031 (July 7, 2026) is from AutoZone’s SEC filings. The index-adjusted estimate adds the 0.75 percentage point rise in the ICE BofA BBB US Corporate Index effective yield from July 7 to October 1, 2026 (FRED); it is an estimate, not a quote, and secondary market yields change daily. NNN cap rates and prices are asking figures across active single-tenant AutoZone listings tracked by InvestmentGrade.com as of October 4, 2026. The ~45.8% combined rate assumes the 37% top federal rate, 3.8% net investment income tax, and about 5% state tax. This is not investment advice.
The AutoZone Investment Case
AutoZone combines a well-rated credit (BBB/Baa1) with an operationally resilient business model. Diluted earnings per share rose each year from fiscal 2021 ($95.19) to fiscal 2024 ($149.55), fell 3.1% in fiscal 2025 to $144.87, then rose 5.3% to $152.55 in fiscal 2026. The company returns cash through share repurchases ($2.0 billion in fiscal 2026) while holding adjusted debt to EBITDAR at 2.5x, and it says it targets its capital structure to maintain its investment grade credit ratings.
Customers often arrive with an immediate problem (a vehicle that needs a repair) and need a specific part the same day, which shipping cannot always match. AutoZone’s network of 6,863 US stores is supported by hub and mega hub stores with expanded assortments, which the company says improve local parts availability.
For bond investors evaluating this credit, the NNN comparison is straightforward but not identical. AutoZone had about $9.1 billion of total debt at fiscal 2026 year-end, and the same company stands behind leases that AutoZone, Inc. signs or guarantees. The underlying credit is the same company only when AutoZone, Inc. is the tenant or guarantor, and the claims differ: a bondholder is an unsecured creditor for the full principal, while a landlord owns the real estate but has a claim for future rent after a lease rejection in bankruptcy that is capped under Section 502(b)(6) of the Bankruptcy Code. The NNN investor often seeks a higher yield as compensation for illiquidity, single-asset risk, and re-leasing risk, though against the index-adjusted bond yield estimate as of October 1, 2026, the median AutoZone listing does not offer one; the bond investor gives up any such premium for tradability.
AutoZone vs. O’Reilly: Bonds and Cap Rates Compared
O’Reilly Auto Parts is rated BBB/Baa1. Their recent five-year bonds priced close together: AutoZone’s 4.950% notes due 2031 at 4.971% in July 2026, and O’Reilly’s 5.050% notes due 2031 at 5.055% in August 2026. Corporate yields have since risen: if each note had moved with the ICE BofA BBB index through October 1, 2026 (FRED), AutoZone’s would yield roughly 5.7% and O’Reilly’s roughly 5.6%. In the NNN market, though, AutoZone prices tighter: median asking cap rates in our tracked listings are about 5.5% for AutoZone versus about 6.0% for O’Reilly, partly because more AutoZone listings are ground leases. As a result, O’Reilly offers the wider premium over its own bonds: at current index-adjusted yields, roughly +35 basis points at the median for O’Reilly versus roughly -20 for AutoZone.
For investors building a diversified auto parts NNN portfolio, holding both AutoZone and O’Reilly provides tenant diversification within a sector that shares the same structural demand. With bond yields up since summer, the premium over each company’s 2031 notes is now thin for both tenants, so lease term, rent growth, residual land value, and 1031 eligibility carry more of the case for the real estate.
AutoZone’s 4.950% notes due 2031 priced to yield 4.971% in July 2026, about 53 basis points below the median asking cap rate of about 5.5% on the active AutoZone listings we track (October 2026). Corporate yields have risen since: if the notes tracked the ICE BofA BBB index, they would yield roughly 5.7% today, slightly above the median AutoZone cap rate. After tax, the comparison depends on structure: a fee simple owner can shelter part of the income with building depreciation, while a ground lease owner cannot.
AutoZone is rated BBB/Baa1. The company says it targets its capital structure to maintain its investment grade credit ratings; it repurchased $2.0 billion of stock in fiscal 2026 and ended the year with adjusted debt to EBITDAR of 2.5x. For NNN investors, the result is a solid investment grade tenant whose bonds yield somewhat more than those of higher-rated retailers.
We track 34 active AutoZone listings. A recognizable brand, investment grade credit, a standardized building format, and a middle half of asking prices between about $1.3 million and $2.8 million (October 2026) can draw individual, family office, and 1031 exchange buyers. Time to sell varies with the lease, the location, and market conditions.
Benchmark AutoZone Against the Auto-Parts Tenant Set
AutoZone belongs in the same 1031 replacement-property screen as O’Reilly and NAPA / Genuine Parts, but the right buy depends on more than the sign on the building. Compare cap rate, remaining lease term, rent bumps, store format, and guarantor strength against current 2026 NNN cap rates by tenant credit quality before deciding whether the spread over AutoZone bonds is worth the real estate execution risk.
1031 next reads: best investment-grade NNN tenants for 1031 buyers | AutoZone credit rating and NNN cap rate | bond-vs-NNN spread framework
1031 Buyer Shortcut: AutoZone
For a 45-day identification list, AutoZone should be compared inside the auto-parts set rather than against trophy QSR or pharmacy assets. Screen it against investment-grade NNN tenant selection for 1031 buyers and the current 2026 NNN cap-rate framework; then use O’Reilly and NAPA / Genuine Parts as adjacent pricing checks.
Considering AutoZone NNN?
We source AutoZone NNN properties nationally. On the majority of transactions, there is no separate fee to you as the buyer.
Find It: AutoZone NNN across all markets, with the tenant entity and any guaranty confirmed.
Fund It: financing matched to the tenant’s credit and the remaining lease term.
Exit It: buyers for AutoZone properties, including 1031 exchange buyers.
Exchange It: 1031 exchange into AutoZone NNN with deadline-driven execution.
Educational content only. InvestmentGrade.com is a commercial real estate brokerage and educational publisher. We do not sell, broker, underwrite, or solicit any bonds, securities, or investment products. Yields, ratings, and prices referenced are approximate, fluctuate continuously, and are sourced from public market data as of the date noted. Nothing on this page constitutes investment advice, an offer to sell, or a solicitation to buy any security. Consult a licensed broker-dealer, registered investment advisor, or tax professional before making any investment decision. For official municipal bond disclosures and trade data, visit EMMA at emma.msrb.org. For SEC investor education, visit investor.gov.
