Lowe’s is an investment grade home improvement retailer; this page compares the bond index yield for its rating category with Lowe’s net lease cap rates. Lowe’s reports that about 89% of its stores are owned, including stores on leased land (Form 10-K for the year ended January 30, 2026); store ownership does not measure how often leased properties sell. The listings InvestmentGrade.com tracks held 4 active properties leased to Lowe’s, last observed October 23, 2026. When fewer than five active listings publish a cap rate, our tables show no median rather than an estimate.
The ICE BofA index for Lowe’s rating category (BBB) yielded 6.19% as of October 1, 2026. See the Lowe’s credit rating and NNN cap rate page for the tenant profile.
Lowe’s Credit Profile
| Metric | Details |
|---|---|
| S&P rating / outlook | BBB+ (Stable) |
| Moody’s rating / outlook | Baa1 (Stable) |
| Status | Investment Grade |
| Rated entity in our database | Lowe’s Companies, Inc. |
| Rating sources | S&P Global Ratings BBB+, Stable, as of August 27, 2026; Moody’s Baa1, Stable, as of August 27, 2026. Ratings checked October 8, 2026. |
The Spread: Lowe’s Bonds vs. NNN
The comparison uses the bond index yield for Lowe’s rating category against the median asking cap rate on active Lowe’s listings, when enough listings exist.
| Metric | Lowe’s bonds (rating-category index) | Lowe’s net lease properties |
|---|---|---|
| Latest yield measure | 6.19% (ICE BofA BBB index) | Median asking cap rate n/a (4 listings with a cap rate) |
| Spread, cap rate minus index yield | Baseline | n/a |
| Obligor | The issuing entity named in the bond’s indenture | The entity that signs or guarantees the lease |
| Minimum size | $2,000 face, then $1,000 increments, on Lowe’s September 2025 notes, per the prospectus supplement | $11.87M median asking price |
| Liquidity | Trades over the counter through dealers | Sale timing varies with the property, lease and market |
| Income taxation | Interest taxed as ordinary income | Rent taxed as ordinary income, partly offset by depreciation of the building (land is not depreciable) |
| 1031 exchange | Not eligible (IRC 1031(a)(1) covers real property only) | Eligible when held for investment or business use and exchanged for like-kind real property held the same way (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 Lowe’s rating category via FRED, as of October 1, 2026; it is an index average, not a quote on Lowe’s own bonds. Cap rate: median asking cap rate on active listings InvestmentGrade.com tracks, last observed October 23, 2026, a separate date from the index date; asking cap rates are not closed-sale cap rates. n/a means too few listings to report a median.
Why the Spread Exists
Lowe’s stores average about 112,000 square feet of retail selling space plus about 32,000 square feet of outdoor garden center selling space (Form 10-K for the year ended January 30, 2026), so buyers weigh the land and location as well as the lease. Asking cap rates on ground leases and fee simple properties vary, so compare them listing by listing. Where the landlord owns only the land under a ground lease, it has no building to depreciate (Treas. Reg. §1.167(a)-2).
For comparison, Home Depot is rated A by S&P and Walmart AA. Their listing medians and index spreads, with their own sample notes, are on the Home Depot and Walmart bonds vs. NNN pages.
Frequently Asked Questions
How is Lowe’s rated?
Lowe’s Companies, Inc. is rated BBB+ (Stable) by S&P and Baa1 (Stable) by Moody’s, per our ratings database. Sources and dates: S&P Global Ratings BBB+, Stable, as of August 27, 2026; Moody’s Baa1, Stable, as of August 27, 2026. Ratings checked October 8, 2026.
What share of its stores does Lowe’s own?
Lowe’s reports that about 89% of its stores are owned, including stores on leased land, with the remainder leased from third parties (Form 10-K for the year ended January 30, 2026). Store ownership does not measure how often properties sell. The listings InvestmentGrade.com tracks held 4 active properties leased to Lowe’s, last observed October 23, 2026.
Can a Lowe’s ground lease owner take depreciation?
No, not on the land: depreciation does not apply to land apart from its improvements (Treas. Reg. §1.167(a)-2). Depreciation is available on buildings and improvements the investor owns; on a ground lease the tenant may own the building during the lease term, so confirm ownership of improvements in the lease.
Considering Lowe’s Net Lease Property?
We source Lowe’s 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: Lowe’s properties across lease terms and markets.
Fund it: financing matched to the tenant’s credit and the remaining lease term.
Exit it: buyers for Lowe’s 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.
