Floor & Decor Credit Rating & NNN Cap Rate Analysis (2026)

Floor & Decor Business Overview & NNN Investment Profile

Floor & Decor Holdings is a specialty retailer of hard surface flooring and related accessories, operating 281 warehouse-format stores averaging 75,000 square feet and five small-format design studios in 39 states as of June 25, 2026 (Form 10-Q). The Atlanta-based company sells tile, stone, wood, laminate, vinyl, and installation materials to both professional contractors and DIY consumers. Floor & Decor went public in 2017 (final IPO prospectus filed April 28, 2017). It opened 20 new warehouse-format stores in fiscal 2025 (Form 10-K) and planned to open 20 in fiscal 2026 (Form 10-Q, June 25, 2026).

Floor & Decor Credit Rating Analysis

Floor & Decor’s Form 10-Q for the quarter ended June 25, 2026 (filed July 30, 2026) reports, as of June 25, 2026, an S&P issuer credit rating of BB (Stable) and a Moody’s issuer credit rating of Ba3 (Stable), unchanged from December 25, 2025; both are below investment grade. As of June 25, 2026, its funded debt was a $200.0 million term loan due 2033, alongside $1.82 billion of lease liabilities (Form 10-Q), so its lease obligations far exceed its funded debt. Its fiscal 2025 Form 10-K says sales are highly sensitive to consumer discretionary spending, which is influenced by housing market activity and interest rates.

Source: S&P Global Ratings BB, Stable, as of June 25, 2026; Moody’s Ba3, Stable, as of June 25, 2026. Ratings checked October 8, 2026.

Professional customers (Pros) are a large part of the business: the company estimates that about 50% of fiscal 2025 retail sales came from Pros, and each store has a dedicated Pro sales force (Form 10-K). Any upgrade toward investment grade is up to the rating agencies; check the current ratings above.

Floor & Decor NNN Lease Structure

Floor & Decor’s fiscal 2025 Form 10-K says initial lease terms for its retail locations, distribution centers and corporate office typically range from 10 to 20 years, and the majority of its leases include options to extend. At an average of 75,000 square feet per warehouse-format store (Form 10-Q, June 25, 2026), these are large boxes, and buyer pools vary with price and market. Certain leases include escalating rents (fiscal 2025 Form 10-K); the schedule varies, so confirm it in the lease. A large-format box may have fewer re-tenanting options in some markets, so assess re-use for each property.

Floor & Decor NNN Cap Rate & Pricing Trends

We do not currently track enough Floor & Decor listings with published asking cap rates to report a median. The table below shows live asking cap rates for comparable big box tenants where at least three listings qualify; those are peer figures, not Floor & Decor pricing.

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 16, 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 5.24% as of October 1, 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. Not shown because fewer than 3 active listings with a published cap rate were observed: Floor & Decor.

Floor & Decor Holdings is rated below investment grade, but each property’s credit support depends on the tenant named in the lease (stores are operated through subsidiary Floor and Decor Outlets of America, Inc.) and any guarantor, so confirm both in the lease. Pricing varies with remaining lease term, rent level and location.

Floor & Decor NNN Investment: Pros & Cons

Comparable NNN Tenants