Public Credit Markets as a Lens for Private NNN Deals: A Pricing Worksheet

Public credit markets give private net lease buyers a price check. Treasury yields show what a buyer can earn without credit or property risk, investment grade corporate bond yields show what the market pays for corporate credit risk, and a tenant’s own rating shows where its credit sits. This page is a worksheet: it applies those benchmarks to a worked example and gives current figures. For the concepts behind it, see the companion article how public credit markets can help price private NNN deals, and for the rating scale, the investment grade guide.

Current Benchmarks

Median asking cap rates on the net lease listings we track, grouped by the tenant’s rating:

Active listings InvestmentGrade.com tracks with an asking cap rate (stated, or computed from stated income and price when no rate is stated), listings last observed October 19, 2026, grouped by the rating of tenants rated in their own name; franchised brands rated only through a parent company are left out because a parent’s rating applies to a franchisee’s lease only if the parent signs or guarantees it. Asking cap rates are not closed-sale cap rates, and location, lease term, and ground lease structure move cap rates as much as the rating. Categories with fewer than 5 listings are not shown (CCC and lower).

Worked Example

Hypothetical property, using market figures as of October 1, 2026. A single-tenant net lease property is offered at a 6.25% cap rate. The lease has 15 years remaining and is signed by the rated parent company, which is rated BBB.

The property is priced only slightly above what an investor could earn on a diversified index of BBB corporate bonds, which are liquid and carry no property risk, and below the median asking cap rate for other BBB-rated tenants. That does not make it a bad deal, but the buyer needs a specific reason to accept the tight pricing, such as:

• rent increases that a bond coupon does not have;
• a strong site with rent at or below market, which protects value if the tenant leaves;
• a longer remaining lease term than comparable listings;
• depreciation and 1031 exchange benefits that bond income does not offer.

If none of these apply, the price probably reflects the brand name more than the economics. If the same property were offered at 7.25%, the question would reverse: what risk is the market seeing that the rating does not show?

The Worksheet

1. Identify the obligor. Find the entity that signs the lease and any guarantor. A franchisee or subsidiary is not the rated parent. See parent guarantee vs. subsidiary tenant.
2. Classify the credit. Investment grade, speculative grade, unrated public, or private. Check the tenant ratings database.
3. Compare with public benchmarks. Spread over the 10-year Treasury and over the bond index for the tenant’s rating tier.
4. Compare with private peers. Median asking cap rate for the rating tier and for the tenant itself; see NNN cap rates by credit quality.
5. Adjust for what bonds do not carry. Site quality, rent relative to market, building reuse, lease term, rent increases, capital obligations and exit liquidity.
6. Decide. A thin spread needs strong real estate and lease terms to justify it; a wide spread needs an explanation of the risk being priced.

For the comparison between bond and real estate income, see bonds vs. NNN real estate: what the spread means, and for how scaled owners think about credit, what REIT credit ratings tell private NNN buyers.

Sources: Federal Reserve Economic Data (10-year Treasury constant maturity; ICE BofA US Corporate, BBB yield and OAS indexes); S&P Global Ratings, Moody’s and Fitch rating definitions; InvestmentGrade.com listing data for asking cap rates.

Frequently Asked Questions