Best Buy is an investment grade consumer electronics retailer. The median asking cap rate on Best Buy listings we track, last observed October 16, 2026, is 6.58%, against a BBB bond index yield of 6.19% as of October 1, 2026, a spread of +39 bps.
The bond is an obligation of Best Buy Co., Inc.; confirm that the same entity signs or guarantees any lease. See the Best Buy credit rating and NNN cap rate page.
Best Buy Credit Profile
| Metric | Details |
|---|---|
| S&P rating / outlook | BBB+ (Stable) |
| Moody’s rating / outlook | A3 (Stable) |
| Status | Investment Grade |
| Rated entity in our database | Best Buy Co., Inc. |
| Rating sources | S&P Global Ratings BBB+, Stable, as of March 16, 2026; Moody’s A3, Stable, as of March 16, 2026. Ratings checked October 8, 2026. |
The Spread: Best Buy Bonds vs. NNN
The comparison uses the bond index yield for Best Buy’s rating category against the median asking cap rate on active Best Buy listings.
| Metric | Best Buy bonds (rating-category index) | Best Buy net lease properties |
|---|---|---|
| Latest yield measure | 6.19% (ICE BofA BBB index) | Median asking cap rate 6.58% (6 listings with a cap rate) |
| Spread, cap rate minus index yield | Baseline | +39 bps |
| Obligor | The issuing entity named in the bond’s indenture | The entity that signs or guarantees the lease |
| Minimum size | $2,000 face, then $1,000 increments, per the prospectus supplement for Best Buy’s 2020 notes | $8.01M median asking price |
| Liquidity | Trades over the counter through dealers | Sale timing varies with the property, lease and market |
| Income taxation | Interest taxed as ordinary income | Rent taxed as ordinary income, partly offset by depreciation of the building (land is not depreciable) |
| 1031 exchange | Not eligible (IRC 1031(a)(1) covers real property only) | Eligible when held for investment or business use and exchanged for like-kind real property held the same way (IRC 1031(a)(1)) |
| Value at the end | Face value at maturity absent default; market price moves before then | Depends on the property, lease term, and market |
| Income growth | Fixed coupon | Only if the lease provides rent increases |
Bond yield: ICE BofA effective yield index for Best Buy’s rating category via FRED, as of October 1, 2026; it is an index average, not a quote on Best Buy’s own bonds. Cap rate: median asking cap rate on active listings InvestmentGrade.com tracks, last observed October 16, 2026, a separate date from the index date; asking cap rates are not closed-sale cap rates. Tax rows are general information, not advice: interest and rent are taxable income (IRC Section 61(a)(4) and (5)), land is not depreciable (Treas. Reg. 1.167(a)-2), and only real property held for business or investment and exchanged for like-kind real property qualifies for a 1031 exchange (IRC Section 1031(a)(1)). n/a means too few listings to report a median.
Why the Spread Exists
Best Buy’s Domestic stores averaged roughly 38,800 square feet at January 31, 2026 (35.95 million square feet across 926 stores, Form 10-K), so a property buyer weighs the cost of re-leasing a large building if the tenant leaves. A bond is a claim on the company as a whole, not on one store.
Remaining lease term also matters to a property buyer, along with location, rent and the lease guarantor. Compare asking cap rates across listings with similar remaining terms; a gap between long-term and short-term listings is an unadjusted association, not by itself the effect of lease term.
After-Tax Illustration
The table compares one full year of after-tax cash from a bond position and an all-cash net lease purchase of the same size, using the index yield and median asking cap rate shown above, with their observation dates. The bond column assumes a hypothetical bond bought at par with a coupon equal to that index yield, so annual interest equals the index yield times the amount invested; an actual Best Buy note’s cash income depends on its coupon and purchase price. The real estate result depends heavily on depreciation. On a taxable sale, the applicable unrecaptured section 1250 gain (gain attributable to depreciation on the building) may be taxed at up to 25% (IRC Section 1(h)(1)(E) and (h)(6)), plus the net investment income tax where it applies (IRC Section 1411); a qualifying 1031 exchange can defer that gain (IRC Section 1031(a)(1)). So the comparison over a full holding period is narrower than a single year suggests. This is general information, not tax advice.
| One full year, $2,000,000 invested, all cash | Bond at 6.19% (BBB index) | NNN at 6.58% cap rate |
|---|---|---|
| Pre-tax income | $123,800 | $131,600 |
| Depreciation (building only, 80% of price over 39 years) | $0 | $41,026 |
| Taxable income | $123,800 | $90,574 |
| Federal tax at 40.8% | $50,510 | $36,954 |
| After-tax cash | $73,290 (3.66%) | $94,646 (4.73%) |
Illustration only. Assumes no financing, a 20% land allocation (land is not depreciable), straight-line depreciation with no cost segregation, a combined 40.8% federal rate (37% plus the 3.8% net investment income tax) on both incomes, and no state tax. It ignores closing and management costs, rent changes, and the sale. On a taxable sale, the part of the gain up to the depreciation taken is generally taxed at up to 25% (IRC 1(h)(1)(E), 1(h)(6)), plus the 3.8% net investment income tax where it applies (IRC 1411). A 1031 exchange into like-kind real property can defer that tax (IRC 1031(a)), but gain is taxable up to the cash and the value of any other non-like-kind property received (IRC 1031(b)). With cost segregation or other accelerated depreciation, part of the gain can be taxed as ordinary income even in an exchange (IRC 1245(b)(4), 1250(d)(4)). A bond bought at par returns par at maturity. Bond yield is the ICE BofA index yield for the tenant’s rating category via FRED; cap rate is the median asking cap rate on active listings InvestmentGrade.com tracks. Consult a tax advisor for your situation.
Frequently Asked Questions
What is the spread between Best Buy bonds and NNN cap rates?
The median asking cap rate on Best Buy listings we track, last observed October 16, 2026, is 6.58%, against a BBB index yield of 6.19% as of October 1, 2026, a spread of +39 bps.
How is Best Buy rated?
Best Buy Co., Inc. is rated BBB+ (Stable) by S&P and A3 (Stable) by Moody’s, per our ratings database. Sources and dates: S&P Global Ratings BBB+, Stable, as of March 16, 2026; Moody’s A3, Stable, as of March 16, 2026. Ratings checked October 8, 2026.
What are the main risks of a Best Buy net lease property?
Re-leasing a large box if the tenant leaves, competition from online retail, and the remaining lease term. Underwrite the location and the cost of a replacement tenant, not just the rating.
Considering Best Buy Net Lease Property?
We source Best Buy properties nationally and underwrite the lease, the obligor, and the real estate. On the majority of transactions, there is no separate fee to you as the buyer.
Find it: Best Buy properties across lease terms and markets.
Fund it: financing matched to the tenant’s credit and the remaining lease term.
Exit it: buyers for Best Buy properties, including 1031 exchange buyers.
Exchange it: 1031 execution against the deadlines.
Related Reading
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 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 SEC investor education, visit investor.gov.
