Michaels Credit Rating & NNN Cap Rate Analysis (2026)

Michaels Business Overview

Michaels is a major arts and crafts retailer: as of January 30, 2021, the end of the last fiscal year it reported to the SEC, it operated 1,252 Michaels stores in 49 states and Canada (Form 10‑K). Funds managed by Apollo acquired Michaels in April 2021, and the company no longer files reports with the SEC. Hobby Lobby, which is privately owned and says it has more than 1,000 stores, is a large national competitor in arts and crafts. Joann, another national competitor, commenced Chapter 11 proceedings on January 15, 2025, its second bankruptcy filing after one on March 18, 2024.

Michaels Credit Profile

Michaels is rated B- in our database, below investment grade. At the April 2021 buyout closing, Michaels assumed $850 million of 5.250% senior secured notes and $1.3 billion of 7.875% senior notes issued by the acquisition company (Form 8‑K, April 15, 2021). Confirm which Michaels entity signs the lease and whether a parent guarantees it.

Ratings come from our tenant ratings database, which records the source of each rating. A rating at or above BBB‑/Baa3 is investment grade; see the investment grade guide.

Source: S&P Global Ratings B-, as of February 18, 2026. Ratings checked October 8, 2026.

Michaels NNN Cap Rates

Live asking cap rates for Michaels 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 16, 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. Not shown because fewer than 3 active listings with a published cap rate were observed: Hobby Lobby, JOANN, Barnes & Noble, Ulta Beauty.

Michaels listings InvestmentGrade.com currently tracks: 3; the live table shows a median only when at least three have a published asking cap rate. Price a property on the location, the rent compared with market rent and the remaining term, and compare with other below investment grade specialty retailers.

What to Check in a Michaels Lease

• Tenant and guarantor: which Michaels entity signs the lease and whether a parent guarantees it.
• Term and options: remaining term and renewal options.
• Co-tenancy: shopping center co-tenancy and go-dark provisions.
• Rent versus market: whether rent is at or below market.
• Re-use: how readily the space could be re-leased to another retailer in that center.

Pros and Cons

Sources: ratings from InvestmentGrade.com’s ratings database; The Michaels Companies, Inc. Form 10‑K for the year ended January 30, 2021 and Form 8‑K filed April 15, 2021; Hobby Lobby corporate background page; JOANN Inc. Form 8‑K filed March 18, 2024; BMO 2025-5C10 Mortgage Trust offering document filed with the SEC on April 17, 2025.