Lowe’s vs Target: Which NNN Investment Wins?

Lowe’s and Target are two national big box retailers that appear in net lease listings, and in our ratings database both are classified as investment grade: Lowe’s Companies, Inc. is rated BBB+/Baa1 and Target Corporation is rated A/A2 (S&P / Moody’s), as of the check date shown under the table. In the listings we track, Lowe’s asks a live median cap rate of 5.63% across 4 listings, versus 5.33% across 6 listings for Target.

This comparison applies the framework from our investment grade guide: credit first, then lease structure, then the real estate. Target is rated higher, but Lowe’s and Target report store ownership on different bases (Lowe’s counts stores on leased land as owned, while Target breaks them out), and that structure changes what a buyer is underwriting.

Lowe’s vs Target: Head-to-Head Comparison

Ratings per our tenant ratings database. Lowe’s: Ratings checked October 8, 2026. Target: Ratings checked October 8, 2026. Store counts, ownership figures, sizes and lease terms are from the companies’ Form 10-K filings and Target’s Q2 2026 earnings release as labeled; the lease term statement in the table is Target’s description of its leases overall, not of any listing. Median asking cap rates, counts, ranges, prices and last-observed dates are live values from the active listings InvestmentGrade.com tracks; some cap rates may be calculated from a listing’s stated price and income when the listing does not state one. Asking cap rates are not closing cap rates.

Credit: Target Rated Higher at S&P and Moody’s

Target Corporation is rated A/A2 (S&P / Moody’s) in our ratings database and Lowe’s Companies, Inc. is rated BBB+/Baa1. Target is two notches higher at both S&P and Moody’s, and both are above the BBB‑/Baa3 threshold. The full profiles are on the Target credit rating and cap rate page and the Lowe’s 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, and a higher rating does not by itself make one store a better investment than another.

Lease Structure: Two Mostly Owned Fleets

Both retailers report that they own most of their stores. Lowe’s states that approximately 89% of its retail stores were owned at January 30, 2026, including stores on leased land, with the remainder leased from third parties (Form 10-K). Target reported owning 1,546 of its 1,995 stores at January 31, 2026, leasing 288 and owning the building on leased land at another 161 (Form 10-K). That does not mean an individual listing is owner-occupied. A listing can be a store the retailer sold and leased back, a store it leases from a landlord, or a ground lease where the investor owns the land and the retailer owns the building. Compare each listing only with the same structure, and confirm the structure in the offering documents.

The filings describe each company’s leases only in general terms. Target states that most of its leases include one or more renewal options that can extend the lease term from one to 50 years or more, and that exercise of those options is at its sole discretion (Form 10-K). That statement covers Target’s leases overall, so the term, options and rent schedule for any one store come from that store’s lease.

The Box: Size and Re-Use

Lowe’s reported approximately 196 million square feet of retail selling space across 1,759 stores and outlets at January 30, 2026, and states that its stores average approximately 112,000 square feet (Form 10-K). Target reported 274 stores of 170,000 square feet or more, 1,598 stores between 50,000 and 169,999 square feet and 147 stores of 49,999 square feet or less at August 1, 2026 (Q2 2026 earnings release). The two companies describe store size on different bases, so do not compare the figures directly; check the size of the specific store. Target’s ownership figures are as of January 31, 2026 (1,995 stores) while its size bands are as of August 1, 2026 (2,019 stores), so the totals reflect different dates.

A large box can have a narrower pool of replacement tenants if the original tenant leaves. Confirm land area, parking and access for each site, and check for co-tenancy and go-dark provisions at shopping center locations.

Cap Rates: Live Medians for Big Box Peers

Live asking cap rates for Lowe’s, 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 November 9, 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 4.88% as of November 9, 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, Lowe’s asks a live median cap rate of 5.63%, while Target asks 5.33%. Each median rests on the listing count shown in the table, and with few listings a single property 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 Lowe’s 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 company-level math for Lowe’s is in Lowe’s 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, Target (A/A2) is rated higher than Lowe’s (BBB+/Baa1) at both agencies as of the check date, and both clear the investment grade threshold. The live medians show where sellers are asking for each, and the table lists the listing counts behind them.

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