Dollar Tree stores appear regularly in the investment grade net lease listings InvestmentGrade.com tracks. The median asking cap rate on the 84 active Dollar Tree listings with a published cap rate, as of October 9, 2026, is 7.34%, against an index yield of 6.19% for Dollar Tree’s rating category, a spread of +115 bps; see the spread table for other tenants. Some of these listings are combination Family Dollar and Dollar Tree stores, so confirm which entity signs each lease.
A Dollar Tree bond and a Dollar Tree lease are not automatically the same credit. The bond is an obligation of Dollar Tree, Inc.; a lease is an obligation of whichever entity signs it, so confirm the tenant and any guarantee. See the Dollar Tree credit rating and NNN cap rate page for the tenant profile.
Dollar Tree Credit Profile
| Metric | Details |
|---|---|
| S&P rating | BBB |
| Moody’s rating | no verified rating |
| Status | Investment Grade |
| Rated entity and rating type in our database | Dollar Tree, Inc.; S&P issuer credit rating |
| Rating sources | S&P Global Ratings BBB, as of July 21, 2025. Ratings checked September 27, 2026. |
Dollar Tree completed the sale of Family Dollar on July 5, 2025. Family Dollar leases are not backed by Dollar Tree’s credit unless a lease or guaranty says so. In its Form 10-K for the fiscal year ended January 31, 2026, Dollar Tree disclosed that it was guaranteeing lease obligations for 114 Family Dollar stores, approximately $86.0 million for the first year following the sale. Its Form 10-Q for the quarter ended August 1, 2026 describes the continuing guaranty as covering lease obligations for certain Family Dollar stores, amounting to $20.0 million in the second year and $10.0 million in the third year following the sale. Confirm any guaranty in the lease file.
The Spread: Dollar Tree Bonds vs. NNN
The comparison uses the bond index yield for Dollar Tree’s rating category, not a quote on its own bonds, against the median asking cap rate on active Dollar Tree listings.
| Metric | Dollar Tree bonds (rating-category index) | Dollar Tree net lease properties |
|---|---|---|
| Yield measure today | 6.19% (ICE BofA BBB index) | Median asking cap rate 7.34% (84 listings with a cap rate) |
| Spread, cap rate minus index yield | Baseline | +115 bps |
| Obligor | The issuing entity named in the bond’s indenture | The entity that signs or guarantees the lease |
| Investment size | $2,000 minimum denomination on Dollar Tree’s senior notes (prospectus supplements) | $1.75M median asking price |
| Liquidity | Trades over the counter through dealers | Weeks to months to sell |
| Income taxation | Interest taxed as ordinary income (IRC 61(a)(4)) | Rent taxed as ordinary income (IRC 61(a)(5)), partly offset by depreciation of the building (IRC 168; land is not depreciable, Treas. Reg. 1.167(a)-2) |
| 1031 exchange | Not eligible (IRC 1031(a)(1) covers real property only) | Eligible if held for business or investment use (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 Dollar Tree’s rating category via FRED, as of October 1, 2026; it is an index average, not a quote on Dollar Tree’s own bonds. Cap rate: median asking cap rate on active listings InvestmentGrade.com tracks, as of October 9, 2026; asking cap rates are not closed-sale cap rates. n/a means too few listings to report a median.
Why the Spread Exists
The net lease market prices individual stores, while the bond market prices the whole company. Dollar Tree says its stores serve customers principally in suburban locations and predominantly range from 8,000 to 10,000 selling square feet (Form 10-K). Each property’s location, lease term and re-leasing prospects affect its asking cap rate, which the bond market does not price.
For comparison, active Dollar General listings we track ask a median of 7.00% against an index yield of 6.19% for its rating category. S&P rates Dollar General Corporation BBB, which Dollar General’s Form 10-Q for the quarter ended July 31, 2026 describes as a senior unsecured debt rating, and Dollar Tree, Inc. BBB, which our database records as an issuer credit rating, dated in the credit profile above. Differences in their listing medians can reflect store locations, lease terms, and the mix of properties for sale as well as credit.
After-Tax Illustration
The table is a normalized full-year illustration, not a first-year tax projection. It compares a hypothetical bond position assumed to pay an annual cash coupon equal to the index effective yield (an index yield is not the coupon on any actual bond) with an all-cash net lease purchase of the same size at the median asking cap rate. Part of the difference in after-tax cash comes from depreciation. On a taxable sale, gain attributable to straight-line depreciation on the building is generally taxed at up to 25 percent as unrecaptured section 1250 gain (IRC 1(h)(1)(E)). The table does not show which investment does better over a full holding period, which also depends on any change in the property’s value, sale costs and taxes, and what the bond returns at maturity or sale.
| One full year, $2,000,000 invested, all cash | Bond at 6.19% (BBB index) | NNN at 7.34% cap rate |
|---|---|---|
| Pre-tax income | $123,800 | $146,700 |
| Depreciation (building only, 80% of price over 39 years) | $0 | $41,026 |
| Taxable income | $123,800 | $105,674 |
| Federal tax at 40.8% | $50,510 | $43,115 |
| After-tax cash | $73,290 (3.66%) | $103,585 (5.18%) |
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 Dollar Tree bonds and NNN cap rates?
The median asking cap rate on active Dollar Tree listings we track is 7.34% against an index yield of 6.19% for Dollar Tree’s rating category, a spread of +115 bps. The two are different measures: an asking cap rate is net operating income divided by asking price, and an index effective yield is a bond-market yield measure. After tax, depreciation matters, and gain attributable to straight-line depreciation on the building is generally taxed at up to 25 percent on a taxable sale (IRC 1(h)(1)(E)); see the illustration above.
Is Dollar Tree a stronger credit than Dollar General?
The ratings are not a like-for-like comparison. Our database records S&P’s rating of Dollar Tree, Inc., BBB, as an issuer credit rating, dated in the credit profile above, and has no verified Moody’s rating for Dollar Tree. For Dollar General Corporation it shows BBB from S&P and Baa3 from Moody’s; Dollar General’s Form 10-Q for the quarter ended July 31, 2026 describes its S&P and Moody’s ratings as senior unsecured debt ratings. Check each company’s tenant page for the current ratings, sources and dates.
When did Dollar Tree sell Family Dollar?
The sale to 1959 Holdings, LLC closed on July 5, 2025 (Form 10-K). Family Dollar leases should be underwritten on their own terms. Dollar Tree’s Form 10-K for the fiscal year ended January 31, 2026 disclosed a guaranty of lease obligations for 114 Family Dollar stores; its Form 10-Q for the quarter ended August 1, 2026 describes the continuing guaranty for certain Family Dollar stores as $20.0 million in the second year and $10.0 million in the third year after the sale. A separate credit rating of Family Dollar itself does not make Dollar Tree a guarantor. Confirm any guaranty in the lease file.
Can I own Dollar Tree bonds and Dollar Tree NNN properties together?
Yes. Some investors hold bonds for liquidity and real estate for depreciation and 1031 deferral. Remember that the two may not share the same obligor, and the property adds location and re-leasing risk.
Considering Dollar Tree Net Lease Property?
We source Dollar Tree 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: Dollar Tree properties across lease terms and markets.
Fund it: financing matched to the tenant’s credit and the remaining lease term.
Exit it: buyers for Dollar Tree 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.
