Home Depot vs Target: Which NNN Investment Wins?

Home Depot and Target are two large-format retailers that appear in net lease listings, and in our ratings database they show the same S&P and Moody’s ratings: The Home Depot, Inc. is rated A/A2 and Target Corporation is rated A/A2 (S&P / Moody’s), both classified as investment grade as of the check date shown under the table. With the credit comparison that close, the buyer’s decision moves to the lease, the box and the business behind it. In the listings we track, Home Depot asks a live median cap rate of 5.48%, versus 5.33% for Target.

This comparison applies the framework from our investment grade guide: credit first, then lease structure, then the real estate. When two tenants are rated alike, the structure of the lease and the building carry more of the decision.

Home Depot vs Target: Head-to-Head Comparison

Ratings per our tenant ratings database. Home Depot: Ratings checked October 8, 2026. Target: Ratings checked October 8, 2026. Store counts, ownership figures, building sizes and net sales are from the companies’ Form 10-K and Form 10-Q filings as labeled. Median asking cap rates, counts, 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: Matching Ratings, Different Businesses

The Home Depot, Inc. is rated A/A2 (S&P / Moody’s) in our ratings database, and fiscal 2025 net sales rose 3.2% to $164.7 billion, driven primarily by the SRS and GMS acquisitions, which together contributed approximately $6.3 billion of incremental net sales (Form 10-K for fiscal 2025). The risks Home Depot itself identifies in that filing include adverse conditions in the housing and home improvement markets and the economy, the cost and availability of labor, and competition. The full profile is on the Home Depot credit rating and cap rate page.

Target Corporation is rated A/A2 (S&P / Moody’s). Comparable sales fell 2.6% in fiscal 2025 and then rose 3.8% in the quarter ended August 1, 2026, compared with a 1.9% decline a year earlier (Form 10-K and Form 10-Q). Those figures describe sales trends, not the rent a landlord receives. Details are on the Target 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.

Lease Structure: Owned Stores and Ground Leases

Both companies own a large share of their stores, so a listing for either can be a ground lease, where the investor owns the land and the tenant owns the building, or a building lease. Home Depot reports that about 90% of its stores in the U.S., Canada and Mexico are owned, including stores subject to ground leases, and Target reported owning 1,546 of its 1,995 stores at January 31, 2026, with another 161 on land it leases but where it owns the building. A ground lease and a building lease have different depreciation, residual value and maintenance profiles, so compare each listing only with the same structure.

Home Depot reports that real estate taxes, insurance, maintenance and operating expenses applicable to leased assets are generally its obligations under its lease agreements (Form 10-K for fiscal 2025); confirm the expense terms in the specific lease. Target’s Form 10-K for fiscal 2025 states that the exercise of its lease renewal options is at its sole discretion, so renewal is not assured.

The Box: Size and Re-Use

A Home Depot store averages approximately 104,000 square feet of enclosed space plus an outside garden area, and Target stores range from 170,000 square feet or more down to 49,999 square feet or less, with 1,598 of its stores between 50,000 and 169,999 square feet (Form 10-Q, August 1, 2026). Large boxes can have a narrower pool of replacement tenants if the original tenant leaves, so remaining term, renewal options and the tenant’s commitment to the location carry weight in the underwriting. Check co-tenancy and go-dark provisions for shopping center locations, and confirm land area and parking for each site.

Cap Rates: Live Medians for Big Box Peers

Live asking cap rates for Home Depot, 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 19, 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.

Across the active listings we track, Home Depot asks a live median cap rate of 5.48%, while Target asks 5.33%. Each median rests on the listing count shown in the table, and with few listings a single listing 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 Home Depot 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 Home Depot math is in Home Depot 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 the two tenants are rated alike (A/A2 and A/A2, S&P / Moody’s), so the rating does not separate them as of the check date. The live medians in the table show where sellers are asking for each. Home Depot lists housing and home improvement market conditions among the risks in its Form 10-K, and Target reported comparable sales declines in fiscal 2025 followed by growth in the quarter ended August 1, 2026, so each business carries its own demand risks.

Neither answer replaces property-level diligence. The deciding factors are the lease obligor, remaining term, renewal options, ground lease versus building lease, 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.