AutoZone vs O’Reilly Auto Parts: Which NNN Investment Wins in 2026?

AutoZone describes itself as a leading retailer and distributor of automotive replacement parts in the Americas, O’Reilly describes itself as one of the largest specialty retailers of automotive aftermarket parts in North America, and both appear often in the net lease listings we track. Measured against the investment grade threshold of BBB-/Baa3, our tenant ratings database classifies AutoZone, Inc. as investment grade and O’Reilly Automotive, Inc. as investment grade, and both chains operate their own stores rather than franchising. A shared rating tier does not mean identical credit or identical lease support, so credit, the lease obligor and any guaranty, rent, remaining term and location still need underwriting. The framework in our investment grade guide applies directly: when two tenants carry the same rating, underwrite the differences the rating does not capture.

AutoZone vs O’Reilly: Side-by-Side Comparison

Ratings per our tenant ratings database. Store counts from company SEC filings (AutoZone fiscal 2026 results; O’Reilly second quarter 2026 results). Figures marked live are computed from the active listings InvestmentGrade.com tracks and refresh with our weekly listings update; each median uses only the listings that report that figure, and a listing’s cap rate may be stated in the listing or computed from its stated income and price. As of October 8, 2026, the samples held 28 AutoZone listings, each with an asking price, cap rate and building size, and 29 O’Reilly listings, each with an asking price and building size and 28 with a cap rate. Asking cap rates are not closing cap rates. Lease terms vary by vintage and developer; always confirm the rent schedule, tenant entity and guarantor in the lease.

Credit Rating Comparison: Same Displayed Rating Tier

Per our tenant ratings database, AutoZone, Inc. is rated BBB/Baa1 and O’Reilly Automotive, Inc. is rated BBB/Baa1 (S&P / Moody’s). Equal broad grades place both in the same displayed rating tier; they do not show that the two companies’ underlying credit is identical. Both companies carry debt and return cash to shareholders through share repurchases: AutoZone reported adjusted debt to EBITDAR of 2.5x at the end of fiscal 2026 and bought back $2.0 billion of stock during the year, and O’Reilly has invested more than $30 billion in buybacks since its program began in 2011.

For a NNN landlord, a shared displayed rating tier does not settle the comparison: credit, the lease obligor and any guaranty, rent relative to market, remaining term, and location still require underwriting. Both tenants are tracked on our credit tenant ratings index, as is sector peer Advance Auto Parts.

Rating sources and types. AutoZone: its final term sheet dated July 7, 2026, filed with the SEC, lists ratings of Baa1 / BBB / BBB for its 4.950% senior notes due 2031, and its prospectus supplement defines Fitch, Moody’s and S&P as the rating agencies for those notes. O’Reilly: S&P Global Ratings BBB, Stable, as of August 10, 2026; Moody’s Baa1, Stable, as of August 10, 2026. Ratings checked October 8, 2026. Its August 10, 2026 term sheet, filed with the SEC, lists expected ratings of Baa1 (Stable) from Moody’s and BBB (Stable) from S&P for its senior notes. For both companies, the Moody’s grade on file is a rating of senior unsecured notes, not a confirmed Moody’s issuer rating. Confirm current ratings and outlooks with the agencies before relying on them.

Cap Rates: Same Rating Tier, Different Asking Cap Rates

In the live figures above, the median AutoZone asking cap rate is 5.35% and the median O’Reilly asking cap rate is 6.00%, a difference of 65 basis points (a lower cap rate means a higher price for each dollar of rent). The two samples differ in lease interest. As of October 8, 2026, in the listings InvestmentGrade.com tracks, 12 of the 28 AutoZone listings are recorded as ground leases, where the investor owns the land and the tenant owns the building, 12 are recorded as not being ground leases, and 4 are unknown; none of the 29 O’Reilly listings is recorded as a ground lease (22 are recorded as not being ground leases and 7 are unknown). These subgroups are small, so compare ground leases with ground leases and building leases with building leases, and confirm the lease interest in the lease documents.

Asking cap rates are not closing cap rates, and a sample of this size (27 AutoZone and 28 O’Reilly listings) shifts as properties trade, so treat these figures as a read of the listings we track rather than a market benchmark. Underwriting detail on each tenant: AutoZone credit rating & NNN cap rate and O’Reilly Auto Parts credit rating & NNN cap rate.

Lease Structure: Read the Rent Schedule

Both chains operate their own stores rather than franchising, which removes franchisee credit from the analysis. That does not by itself settle who owes the rent: leases may be signed by an operating subsidiary, so confirm in each lease whether AutoZone, Inc. or O’Reilly Automotive, Inc. is the tenant or guarantor. O’Reilly’s 10-K describes its leases with unaffiliated landlords as generally providing a fixed base rent, tenant payment of certain taxes, insurance, and maintenance, and an original term of at least 10 years with renewals at O’Reilly’s option.

Rent growth is where individual deals separate. Escalation terms vary by lease vintage and developer, and many of the listings we track do not show a complete rent schedule in the data we can review, so we do not state a typical escalation pattern for either tenant. Compare the actual rent schedule in each lease. As an illustration only: on a 6.0% going-in cap rate, a lease with 10% increases every five years pays rent equal to 6.0% of the purchase price in years 1 to 5, 6.6% in years 6 to 10 and 7.26% in years 11 to 15, an average of about 6.6% a year over a 15-year hold, versus 6.0% for a flat lease. That is an approximate average annual rent yield on the original purchase price, not a total return: it ignores financing, any expenses the tenant does not pay, the timing of cash flows, and the eventual sale price.

Footprint, Growth, and Residual Real Estate

AutoZone operated 6,863 US stores at August 29, 2026, plus 1,001 in Mexico and 167 in Brazil, and opened 236 US stores during fiscal 2026. O’Reilly operated 6,695 stores at June 30, 2026, including 6,541 in the US and Puerto Rico; it opened 207 net new stores in 2025 and is guiding to 225 to 235 in 2026. Both benefit from the same demand driver: AutoZone’s fiscal 2025 Form 10-K reports that the average age of light vehicles on the road increased slightly to 12.8 years, and O’Reilly’s 2025 Form 10-K says the average age of the vehicle population heavily influences demand for automotive aftermarket products.

Residual real estate matters for both tenants. The live median building size in the listings we track is 7,370 square feet for AutoZone and 7,120 square feet for O’Reilly; lot sizes vary by site. That format can re-lease to medical, service, or quick-service restaurant uses if a store goes dark, though re-leasing depends on the local market and the cost of conversion.

Bond Yields vs NNN Cap Rates: The Pivot

Both companies are active bond issuers, so the credit has a public price. On July 7, 2026, AutoZone priced its 4.950% senior notes due 2031 to yield 4.971%; on August 10, 2026, O’Reilly priced its 5.050% senior notes due 2031 to yield 5.055%, according to the companies’ SEC filings.

Comparing those yields with listing cap rates mixes dates. As a mixed-date illustration only: as of October 8, 2026, in the listings InvestmentGrade.com tracks, the median asking cap rate was 5.30% for AutoZone and 6.00% for O’Reilly, about 33 and 95 basis points above the July 7 and August 10, 2026 issuance yields. That is not a spread observed on a single date, and the live medians in the table above move as listings change.

Corporate yields have risen since the notes priced: the ICE BofA BBB US Corporate Index effective yield climbed from 5.44% on July 7 to 6.19% on October 1, 2026 (FRED series BAMLC0A4CBBBEY). That index covers many issuers and does not show how these particular notes have traded, but it means the gap over each company’s bonds may have narrowed since pricing; check current bond quotes before comparing.

Tax treatment and risk also differ (general information, not tax advice). Real property held for productive use in a trade or business or for investment may qualify for a like-kind exchange under IRC Section 1031(a)(1) if the exchange rules are met, including identifying replacement property within 45 days and receiving it by the earlier of 180 days or the due date, with extensions, of the tax return for the year of the transfer (IRC Section 1031(a)(3)). An investor who owns the building can generally depreciate it straight line over 39 years (IRC Section 168(b)(3) and (c)), while land is not depreciable (Treas. Reg. 1.167(a)-2), so an investor who owns only the land under a ground lease has no building to depreciate. The real estate investor also keeps any residual land value and takes on single-asset, re-leasing, and liquidity risk that a bondholder does not.

Full comparisons: AutoZone bonds vs NNN and O’Reilly bonds vs NNN.

Questions to Answer Before Choosing

Considering an AutoZone ground lease? Confirm in the lease that you are buying the land under a tenant-owned building, which party carries building obligations, and who the tenant and any guarantor are, then compare the asking cap rate with other ground leases rather than with building leases.

Comparing going-in yield? The live medians above put AutoZone at 5.35% and O’Reilly at 6.00%, but a median says nothing about a specific store. Weigh each property’s remaining term, rent schedule, age and location.

In either case, the specific lease (rent schedule, remaining term, tenant entity and guarantor, and rent relative to market) matters more than the brand on the building.

Frequently Asked Questions

Related Tenant and Sector Resources

• AutoZone Credit Rating & NNN Cap Rate
• O’Reilly Auto Parts Credit Rating & NNN Cap Rate
• Auto Parts NNN Cap Rates: 4-Tenant Comparison
• Investment Grade Credit Tenant Ratings
• NNN Properties for Sale