Best Buy vs Target: Which NNN Investment Wins?

Best Buy and Target are two national big box retailers that appear in net lease listings, and in our ratings database both are classified as investment grade: Best Buy Co., Inc. is rated BBB+/A3 and Target Corporation is rated A/A2 (S&P / Moody’s), as of the check date shown under the table. In the listings we track, Best Buy asks a live median cap rate of 6.41% across 5 listings, versus 5.33% across 6 listings for Target.

This comparison applies the framework from our investment grade guide: credit first, then lease structure, then the real estate. Target is rated higher, but the two retailers also own and lease their stores very differently, and that difference changes what a buyer is underwriting.

Best Buy vs Target: Head-to-Head Comparison

Ratings per our tenant ratings database. Best Buy: Ratings checked October 8, 2026. Target: Ratings checked October 8, 2026. Store counts, ownership figures and building sizes are from the companies’ Form 10-K and Form 10-Q filings as labeled. Median asking cap rates, counts, ranges, prices and last-observed dates are live values from the active listings InvestmentGrade.com tracks; a few cap rates are calculated from a listing’s stated price and income rather than stated in the listing. Asking cap rates are not closing cap rates.

Credit: Target Rated Higher at Both Agencies

Target Corporation is rated A/A2 (S&P / Moody’s) in our ratings database and Best Buy Co., Inc. is rated BBB+/A3. Target is two notches higher at S&P and one notch higher at Moody’s, and both are above the BBB‑/Baa3 threshold. The full profiles are on the Target credit rating and cap rate page and the Best Buy credit rating and cap rate page, and both tenants can be benchmarked in our credit tenant ratings database.

For either company, the rating applies to a lease only if the rated entity signs or guarantees it. A rating also does not assure that a particular store stays open or that a lease is renewed, and a higher rating does not by itself make one store a better investment than another.

Lease Structure: Leased Electronics Stores vs Owned Big Boxes

Best Buy reports that 871 of its 926 Domestic segment stores were on leased locations at the end of fiscal 2026, with 23 on owned locations and 32 on owned buildings on leased land (Form 10-K). Because 871 of 926 stores are on leased locations, a Best Buy listing is more likely a landlord’s interest in a leased store than a Best Buy-owned building; confirm which it is in the listing. Target reported owning 1,546 of its 1,995 stores at January 31, 2026, leasing 288 and owning the building on leased land at another 161 (Form 10-K), so a Target listing can be a ground lease, where the investor owns the land and Target owns the building, or a building lease. Compare each listing only with the same structure.

Both companies speak to renewal risk in their filings. Best Buy states that, as it approaches lease expirations, it evaluates options for each location, including whether a store should remain open, and that it closed select non-traditional store locations in fiscal 2026 under a restructuring initiative with additional closures expected in fiscal 2027 (Form 10-K). Target states that exercise of its lease renewal options is at its sole discretion (Form 10-K for fiscal 2025). For a buyer, that means remaining term, renewal options and the store’s performance carry weight in the underwriting for either tenant.

The Box: Size and Re-Use

Best Buy’s Domestic segment stores totaled approximately 35,954 thousand square feet across 926 stores at the end of fiscal 2026 (Form 10-K). Target reported 274 stores of 170,000 square feet or more, 1,598 stores between 50,000 and 169,999 square feet and 147 stores of 49,999 square feet or less at August 1, 2026 (Form 10-Q). Store size varies, so check the size of the specific store before you compare cap rates. Target’s ownership figures are as of January 31, 2026 (1,995 stores) while its store count and size bands are as of August 1, 2026 (2,019 stores), so the totals reflect different dates.

A large box can have a narrower pool of replacement tenants if the original tenant leaves. Check co-tenancy and go-dark provisions for shopping center locations, and confirm land area, parking and access for each site.

Cap Rates: Live Medians for Big Box Peers

Live asking cap rates for Best Buy, Target and comparable tenants:

Active listings InvestmentGrade.com tracks with an asking cap rate (stated in the listing, or computed from its stated income and price when no rate is stated), listings last observed October 26, 2026. Asking cap rates are not closed-sale cap rates. The middle half is the range from the 25th to the 75th percentile of listings. The 10-year Treasury yield is 4.99% as of October 27, 2026 (FRED series DGS10). Ratings are the agency ratings in our ratings database for the entity shown, which may be a parent company; the rating type (for example issuer, senior unsecured debt, long-term debt or revenue bond ratings) varies by company and is shown on each tenant page. A rating applies to a lease only if the rated entity signs or guarantees it, so confirm the tenant and any guarantor in the lease. n/a means no verified rating is on file.

Across the active listings we track, Best Buy asks a live median cap rate of 6.41%, while Target asks 5.33%. Each median rests on the listing count shown in the table, and with few listings a single property can move a median, so treat the numbers as a snapshot of what sellers are asking rather than a measure of what buyers pay.

The Bond-to-NNN Pivot

Income buyers can compare real estate against a bond benchmark. A corporate bond index for the matching rating category is one such benchmark, but it is a category measure rather than a quote on a Best Buy or Target bond, so the pre-tax comparison depends on where corporate yields stand when you buy. The cap rate table above shows each tenant’s median asking cap rate against the 10-year Treasury yield, and current index yields by rating category are on our corporate bond yields by rating page.

The case for owning the real estate rather than a bond rests on 1031 exchange eligibility, residual land value, scheduled rent increases where the lease has them, and building depreciation when the investor owns the building (see Internal Revenue Code Section 1031 and IRS Publication 946). The company-level math is in Best Buy Bonds vs NNN Real Estate, and the broader framework is in what the bond-to-NNN spread means. Tax outcomes depend on your situation; this is general information, not tax advice.

Verdict: Which Tenant Wins?

On the ratings in our database, Target (A/A2) is rated higher than Best Buy (BBB+/A3) at both agencies as of the check date, and both clear the investment grade threshold. The live medians show where sellers are asking for each, and the table lists the listing counts behind them.

Neither answer replaces property-level diligence. The deciding factors are the lease obligor, remaining term, renewal options, ground lease versus building lease, the size of the box and the location, not the logo. If you are weighing a replacement property under a 1031 exchange deadline, compare listings with the same lease structure and confirm the tenant and any guaranty in the executed lease.