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. Net lease properties leased to Lowe’s come to market less often than many retail tenants: 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). When fewer than five active listings publish a cap rate, our tables show no median rather than an estimate.
Today the BBB bond index yields 6.19%. 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+ |
| Moody’s rating / outlook | Baa1 |
| Status | Investment Grade |
| Rated entity in our database | Lowe’s Companies, Inc. |
| Rating sources | S&P Global Ratings BBB+, as of August 27, 2026; Moody’s Baa1, as of August 27, 2026. Ratings checked September 27, 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 |
|---|---|---|
| Yield measure today | 6.19% (ICE BofA BBB index) | Median asking cap rate n/a (2 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 |
| Typical minimum | $2,000 minimum face on Lowe’s September 2025 notes, then $1,000 increments | $11.19M median asking price |
| Liquidity | Trades over the counter through dealers | Weeks to months to sell |
| 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 | Eligible |
| 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’s rating category via FRED, as of October 1, 2026; it is an index average, not a quote on Lowe’s’s own bonds. Cap rate: median asking cap rate on active listings InvestmentGrade.com tracks, as of the latest weekly listings refresh; 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. Ground leases, where the landlord owns only the land, often ask lower cap rates than fee simple properties and give the landlord no building to depreciate (Treas. Reg. §1.167(a)-2).
For comparison, Home Depot is rated A by S&P and Walmart AA; their listings ask medians of 5.65% and 5.25%, against A and AA index yields of 5.84% and 5.80%.
Frequently Asked Questions
How is Lowe’s rated?
Lowe’s Companies, Inc. is rated BBB+ by S&P and Baa1 by Moody’s, per our ratings database.
Why are Lowe’s net lease properties scarce?
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). Fewer properties reach the market than for smaller-format retailers.
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 often owns 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.
