A NAPA-branded lease has the investment grade credit support of Genuine Parts Company, NAPA’s parent and the issuer of the bonds, only when Genuine Parts Company itself is contractually liable as the tenant or guarantor. A lease signed by a Genuine Parts subsidiary, or by an independent store owner, has to be assessed on that entity’s own credit. Today the median asking cap rate on NAPA-branded listings we track, whatever the lease obligor, is 6.93% against a BBB bond index yield of 6.19%, a spread of +74 bps.
Genuine Parts reported 6,864 North American automotive locations at December 31, 2025, about 65% of them independently owned stores (2025 Form 10-K). A lease with an independent owner carries that owner’s credit unless Genuine Parts Company signs or guarantees it. See the NAPA credit rating and NNN cap rate page.
Genuine Parts Company Credit Profile
| Metric | Details |
|---|---|
| S&P rating / outlook | BBB- (Negative) |
| Moody’s rating / outlook | Baa1 (Negative) |
| Status | Parent Rated Investment Grade (Genuine Parts Company); confirm the lease guarantor |
| Rated entity and rating type | Genuine Parts Company (parent of NAPA); long-term debt ratings as reported in its 2025 Form 10-K, with outlooks where recorded in our database |
| Rating sources | S&P Global Ratings BBB-, Negative, as of December 31, 2025; Moody’s Baa1, Negative, as of December 31, 2025; Fitch Ratings BBB-, Stable, as of January 28, 2026. Ratings checked October 8, 2026. |
The Spread: Genuine Parts Bonds vs. NAPA-Branded NNN
The comparison uses the bond index yield for Genuine Parts Company’s rating category against the median asking cap rate on active NAPA-branded listings we track.
| Metric | Genuine Parts bonds (rating-category index) | NAPA-branded net lease properties |
|---|---|---|
| Yield measure today | 6.19% (ICE BofA BBB index) | Median asking cap rate 6.93% (16 listings with a cap rate) |
| Spread, cap rate minus index yield | Baseline | +74 bps |
| Obligor | The issuing entity named in the bond’s indenture | The entity that signs or guarantees the lease |
| Investment size | Minimum denomination of $2,000, then $1,000 multiples, on Genuine Parts’ August 2024 notes; small trades can cost more | $1.01M median asking price on NAPA-branded listings we track (not a minimum) |
| Liquidity | Trades over the counter through dealers | Sold through a negotiated property sale; timing varies |
| 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 (section 1031 applies only to real property) | Potentially eligible when held for investment or business use and every requirement of IRC 1031 is met, including like-kind real property and the identification and exchange deadlines |
| 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 Genuine Parts Company’s rating category via FRED, as of October 1, 2026; it is an index average, not a quote on Genuine Parts’ own bonds. Cap rate: median asking cap rate on active NAPA-branded listings InvestmentGrade.com tracks, which include leases with independent owners, as of today; asking cap rates are not closed-sale cap rates. n/a means too few listings to report a median.
Reading the Spread
NAPA-branded listings can include small retail stores as well as larger warehouse or distribution buildings, and pricing can depend on location, the remaining term, the property type and the lease obligor. Stores leased by a Genuine Parts entity can price differently from stores leased by independent owners, so confirm the lease obligor before comparing cap rates.
On February 17, 2026, Genuine Parts Company announced a plan to separate into two public companies; on September 9, 2026, it said its automotive business, which includes NAPA, will operate as Genuine Parts Company and its industrial business as Motion, with completion targeted for the first quarter of 2027 and no assurance the separation will occur, so confirm which entity signs or guarantees any lease. Genuine Parts Company carries the ratings shown above. Each agency’s classification is separate: an S&P rating below BBB‑ would be below investment grade at S&P, while Moody’s investment grade line is Baa3.
After-Tax Illustration
The table compares one year of after-tax cash from a hypothetical bond position and an unleveraged net lease purchase of the same size. The bond column assumes a hypothetical bond bought at par that pays an annual cash coupon equal to today’s index yield; an actual Genuine Parts bond has its own coupon, price and payment dates. The property column assumes rent equal to today’s median asking cap rate on NAPA-branded listings, which is an asking figure, not a sale result.
Depreciation deductions shelter part of the rent in this illustration if the investor owns a depreciable building and can use the deductions. On a taxable sale, gain attributable to straight-line depreciation on real property may be taxed at up to 25% (IRC 1(h)(1)(E) and 1(h)(6)), plus the 3.8% net investment income tax where it applies (IRC 1411). One year of after-tax cash is not a total return over a holding period. This is general information, not tax advice.
| One full year, $2,000,000 invested, all cash | Bond at 6.19% (BBB index) | NNN at 6.93% cap rate |
|---|---|---|
| Pre-tax income | $123,800 | $138,500 |
| Depreciation (building only, 80% of price over 39 years) | $0 | $41,026 |
| Taxable income | $123,800 | $97,474 |
| Federal tax at 40.8% | $50,510 | $39,770 |
| After-tax cash | $73,290 (3.66%) | $98,730 (4.94%) |
Illustration only. Assumes no financing, a 20% land allocation (land is not depreciable), straight-line depreciation with no cost segregation, a combined 40.8% federal rate (37% plus the 3.8% net investment income tax) on both incomes, and no state tax. It ignores closing and management costs, rent changes, and the sale. On a taxable sale, the part of the gain up to the depreciation taken is generally taxed at up to 25% (IRC 1(h)(1)(E), 1(h)(6)), plus the 3.8% net investment income tax where it applies (IRC 1411). A 1031 exchange into like-kind real property can defer that tax (IRC 1031(a)), but gain is taxable up to the cash and the value of any other non-like-kind property received (IRC 1031(b)). With cost segregation or other accelerated depreciation, part of the gain can be taxed as ordinary income even in an exchange (IRC 1245(b)(4), 1250(d)(4)). A bond bought at par returns par at maturity. Bond yield is the ICE BofA index yield for the tenant’s rating category via FRED; cap rate is the median asking cap rate on active listings InvestmentGrade.com tracks. Consult a tax advisor for your situation.
Frequently Asked Questions
How is Genuine Parts Company rated?
Genuine Parts Company’s long-term debt is rated BBB- (Negative) by S&P and Baa1 (Negative) by Moody’s, per our ratings database. Sources: S&P Global Ratings BBB-, Negative, as of December 31, 2025; Moody’s Baa1, Negative, as of December 31, 2025; Fitch Ratings BBB-, Stable, as of January 28, 2026. Ratings checked October 8, 2026.
Does Genuine Parts back every NAPA lease?
No. About 65% of Genuine Parts’ 6,864 North American automotive locations were independently owned stores at December 31, 2025 (2025 Form 10-K). A NAPA-branded lease has Genuine Parts Company’s credit support only when Genuine Parts Company signs or guarantees it; a lease signed by a subsidiary or an independent owner must be assessed on that entity’s credit. Check the legal tenant and guarantor named in the lease, not the signage.
What is the spread between Genuine Parts bonds and NAPA cap rates?
Today the median asking cap rate on NAPA-branded listings we track, whatever the lease obligor, is 6.93% against a BBB index yield of 6.19%, a spread of +74 bps.
Considering NAPA Net Lease Property?
We source NAPA 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: NAPA properties across lease terms and markets.
Fund it: financing matched to the tenant’s credit and the remaining lease term.
Exit it: buyers for NAPA 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.
