Macy’s Credit Rating & NNN Cap Rate

Macy’s Business Overview & NNN Investment Profile

Macy’s, Inc. is the largest US department store operator by revenue, with approximately 500 locations across Macy’s, Bloomingdale’s, and Bluemercury banners. The New York City-based company is executing a major strategic transformation — its “Bold New Chapter” plan announced in early 2024 includes closing approximately 150 underperforming Macy’s stores by 2026 while investing in approximately 50 “go-forward” Macy’s locations and expanding the higher-end Bloomingdale’s and Bluemercury brands. Macy’s also owns significant real estate — most notably its iconic Herald Square flagship in Manhattan — which provides meaningful balance sheet support not reflected in pure operating metrics.

Macy’s Credit Rating Analysis

Macy’s BB+/Ba1 ratings reflect a company in active transformation, not in terminal decline. The contrast with the bankruptcies of Sears, JCPenney, and Stage Stores is meaningful — Macy’s has maintained its credit ratings through the retail disruption era through disciplined inventory management, owned real estate monetization, and the diversification provided by the Bloomingdale’s and Bluemercury brands. The 150-store closure program is credit-positive in the medium term: eliminating cash-burning underperformers focuses capital on locations with viable long-term economics.

Macy’s owned real estate portfolio — valued at several billion dollars — provides a meaningful financial cushion that underpins the BB+/Ba1 ratings. The Herald Square flagship alone has been valued in excess of $1 billion, and the company has executed numerous sale-leaseback transactions to monetize real estate while maintaining operations. This asset-backed credit support is a distinguishing characteristic from pure-lease retailers of comparable credit quality. The investment grade credit threshold at BBB‑/Baa3 remains achievable for Macy’s if the transformation plan executes successfully.

Macy’s NNN Lease Structure: The Complexity

Macy’s real estate structures are among the most complex in retail NNN investing. The company has historically been an anchor tenant in enclosed malls, typically owning its building while ground-leasing or fee-simple owning the land. True freestanding Macy’s NNN lease opportunities are less common than with other big box tenants. When they do arise — typically through sale-leaseback transactions — they represent genuine long-term lease situations with Macy’s, Inc. as the corporate guarantor. Investors must carefully distinguish between a genuine NNN lease, a ground lease, and an anchor co-tenancy structure when evaluating any Macy’s property.

Macy’s NNN Cap Rate & Pricing Trends

Where genuine Macy’s NNN or ground leases exist, they trade at cap rates between 7.0% and 8.5% as of Q1 2026. The BB+/Ba1 rating and the closure program create pricing uncertainty that investors compensate for through wider spreads. Properties on the “go-forward” list in productive retail markets price at the tighter end; properties in markets or center types that Macy’s is exiting price at significant discounts.

Macy’s NNN Investment: Pros & Cons

Comparable NNN Tenants