Dollar General and Dollar Tree are the two most actively traded dollar store tenants in the net lease market, and buyers comparing the two are really comparing two different investment grade credit profiles, two different lease structures, and two different real estate strategies. Both tenants sit above the BBB‑/Baa3 threshold that separates investment grade from high yield, but they do not sit there the same way. Our investment grade guide explains why that threshold matters; this page applies it head to head to the two dominant discount retailers.
Quick verdict: Dollar General offers the larger footprint (20,893 US stores), the longer typical lease (15 years), and a solid BBB from S&P at a 6.75%–7.05% cap rate. Dollar Tree offers a higher going-in yield (7.15%–7.5%) but carries a BBB‑ rating at the very edge of investment grade and a shorter 10-year typical primary term. The roughly 40–45 basis point spread between them is the market pricing exactly that difference.
Dollar General vs Dollar Tree: Side-by-Side Comparison
| Metric | Dollar General | Dollar Tree |
|---|---|---|
| S&P Rating | BBB | BBB‑ |
| Moody’s Rating | Baa3 | Baa3 |
| US Store Count | 20,893 | ~8,500 |
| Cap Rate Range (Q1 2026) | 6.75%–7.05% | 7.15%–7.5% |
| Typical Primary Lease Term | 15 years | 10 years |
| Escalations | Typically in option periods; some primary-term bumps | Typically in option periods |
| Guarantee | Corporate (Dollar General Corporation) | Corporate (Dollar Tree, Inc.) |
| Typical Price Point | $1.2M–$2.5M | $1.8M–$3.0M |
| Annual Revenue | $40.6B (FY2025) | $19.4B (FY2025, continuing operations) |
| New Stores Per Year | ~450–500 | ~400–450 |
Cap rate ranges reflect Q1 2026 market conditions and vary with location, remaining term, and rent escalation structure.
Credit Rating Comparison: BBB vs BBB‑
Dollar General carries BBB from S&P and Baa3 from Moody’s. The Moody’s side moved down to Baa3 in March 2025 on tariff and margin pressure, so both agencies now have the company one to two notches inside investment grade. The S&P BBB rating gives Dollar General a full notch of cushion above the cutoff, which matters for landlords underwriting 15-year income streams: a single-notch downgrade would still leave the tenant investment grade.
Dollar Tree carries BBB‑ from S&P and Baa3 from Moody’s, which is the last stop inside investment grade at both agencies. That does not make Dollar Tree a weak credit. The company exited the Family Dollar banner in 2025, posted strong comparable sales growth on continuing operations, and its multi-price strategy has been supporting margins. But a tenant rated BBB‑/Baa3 has zero downgrade cushion before crossing into high yield, and lenders price that reality into loan spreads on Dollar Tree assets. Buyers can track both tenants alongside 180 other rated retailers on our credit tenant ratings index.
Cap Rate Comparison: What the 40 Basis Point Spread Buys
As of Q1 2026, Dollar General NNN properties trade between 6.75% and 7.05%, while Dollar Tree assets trade between 7.15% and 7.5%. The spread compensates Dollar Tree buyers for three things: the thinner rating (BBB‑ vs BBB), the shorter typical primary term (10 years vs 15), and a smaller store network with less liquid resale comps.
Dollar General is the most-listed NNN tenant in the country, which cuts both ways. Supply keeps cap rates honest and gives buyers negotiating leverage, but deep transaction volume also makes Dollar General one of the easiest assets to finance, appraise, and exit. Dollar Tree trades less frequently, so individual asset quality, market strength, and remaining term drive wider pricing dispersion within its range.
See the full tenant pages for underwriting detail on each: Dollar General credit rating & NNN cap rate and Dollar Tree credit rating & NNN cap rate.
Lease Structure: Term, Escalations, and Guarantee
Both tenants sign corporate-guaranteed leases, which is a meaningful advantage over franchise-heavy sectors like QSR. There is no franchisee obligor risk to underwrite with either tenant: the entity paying rent is the rated public company itself.
The structural differences show up in term and escalations. Dollar General’s standard new-build lease runs 15 years, typically with multiple five-year options and rent bumps concentrated in the option periods. Dollar Tree’s typical primary term is 10 years, which means a buyer of a new Dollar Tree is closer to its first renewal decision than a comparable Dollar General buyer, and lease-term risk is a bigger driver of residual value. Flat primary terms in both cases mean inflation protection comes largely at the options, so purchase price relative to replaceable market rent deserves extra attention with both tenants.
Store Footprint and Real Estate Strategy
Dollar General operates 20,893 US locations and continues opening roughly 450–500 stores per year, concentrated in rural and small-town markets where it is often the only general merchandise retailer within miles. That rural moat supports sales durability but can limit re-leasing depth if a store closes: the backup tenant pool in a town of 3,000 people is thin.
Dollar Tree operates about 8,500 stores skewed toward suburban strip centers and denser retail corridors. Its real estate tends to sit in stronger retail nodes with better re-leasing prospects, partially offsetting the shorter lease term. After divesting Family Dollar, the company is a cleaner, single-banner credit story focused on its multi-price format.
Bond Yields vs NNN Cap Rates: The Pivot
Both companies issue rated corporate bonds, which gives NNN buyers a live benchmark for what the credit alone pays. Dollar General intermediate bonds have recently yielded in the low-to-mid 5% area, against NNN cap rates of 6.75%–7.05%: a premium of roughly 145–175 basis points for owning the real estate instead of the paper. Dollar Tree bonds have recently yielded in a similar mid-5% area against 7.15%–7.5% cap rates, a premium closer to 175–210 basis points.
The NNN premium is not free: it pays for illiquidity, single-site risk, and management of a real asset. But bondholders get none of the depreciation, none of the 1031 exchange eligibility, and none of the residual land value. Full comparisons: Dollar General bonds vs NNN and Dollar Tree bonds vs NNN.
Which Tenant Fits Which Buyer?
Choose Dollar General if you want the longer primary term, the extra notch of S&P credit cushion, the lowest entry price points in net lease ($1.2M–$2.5M), and maximum liquidity at exit. It is the default first NNN purchase for many 1031 exchange buyers on a 45-day identification clock precisely because inventory is always available.
Choose Dollar Tree if you are yield-driven, comfortable underwriting a BBB‑ credit, and can buy real estate quality: a Dollar Tree in a strong suburban corridor with healthy store sales can outperform a rural asset from either banner on a total-return basis, because the dirt is worth more if the lease ever goes away.
Talk to a buyer’s broker before you commit. We maintain live cap rate comps on both tenants and can benchmark any asking price against current dollar store trades within 48 hours. Request a buyer consultation and tell us your cap rate floor, geography, and equity check size.
Frequently Asked Questions
Is Dollar General or Dollar Tree a better NNN investment?
Dollar General offers a stronger S&P rating (BBB vs BBB‑), a longer 15-year typical lease, and deeper market liquidity, while Dollar Tree offers 40–45 basis points more yield (7.15%–7.5% vs 6.75%–7.05%) and generally stronger suburban real estate. Neither is categorically better; the right choice depends on whether a buyer prioritizes credit cushion and term or going-in yield and residual real estate.
What are the credit ratings of Dollar General and Dollar Tree?
Dollar General is rated BBB by S&P and Baa3 by Moody’s. Dollar Tree is rated BBB‑ by S&P and Baa3 by Moody’s. Both are investment grade, but Dollar Tree sits at the minimum investment-grade notch at both agencies while Dollar General has one notch of S&P cushion.
What cap rates do Dollar General and Dollar Tree NNN properties trade at?
As of Q1 2026, Dollar General NNN properties trade at roughly 6.75%–7.05% cap rates and Dollar Tree properties trade at roughly 7.15%–7.5%. Location quality, remaining lease term, and rent escalation structure move individual assets within and outside these ranges.
Do Dollar General and Dollar Tree leases have corporate guarantees?
Yes. Both tenants sign leases guaranteed by the rated parent corporation, Dollar General Corporation and Dollar Tree, Inc. respectively. There is no franchisee obligor risk with either tenant, unlike much of the QSR net lease sector.
Which is easier to buy in a 1031 exchange?
Dollar General, in most cases. It is the most-listed NNN tenant in the US, so exchange buyers on a 45-day identification deadline can reliably find inventory across price points and states. Dollar Tree inventory is thinner, which can work for buyers with time but adds risk inside a 1031 window.
