Investment Grade Tenants: NNN Credit Ratings Index

Investment Grade Tenant Ratings: NNN Credit Index

Tenant credit index: This page tracks the NNN tenants investors actually underwrite, organized by sector, parent company, S&P rating, Moody’s rating, cap-rate context, and bond-vs-NNN comparison paths.

Why it matters: In triple net real estate, tenant credit is often the first underwriting question. The BBB- and Baa3 threshold separates investment grade tenants from speculative-grade credit and directly affects lease durability, lender appetite, buyer demand, and exit liquidity.

Tenant credit threshold

Investment grade tenant credit begins at BBB- from S&P and Fitch, or Baa3 from Moody’s. This is the line many NNN buyers use before comparing cap rates, lease term, guarantor strength, and exit liquidity.

Related analysis: deeper reads on tenant credit and NNN ownership include the Life Time sale-leaseback owner-operator case study, Walgreens NNN owner update, Kroger bonds vs. NNN comparison, O’Reilly bonds vs. NNN comparison, and Investment Grade Thinking methodology.

More tenant profiles: credit and NNN research profiles for Kroger, Circle K, HCA Healthcare, Comerica Bank, Floor & Decor, Sam’s Club, Tim Hortons, and Planet Fitness.

The BBB- / Baa3 threshold that defines institutional grade credit quality is the same line that separates investment grade from speculative grade tenants, which is why institutional buyers, pension funds, and 1031 exchange investors consistently favor tenants rated at or above this cutoff.

1. Automotive

Summary:
Auto parts retailers such as AutoZone (BBB), O’Reilly (BBB), and NAPA, whose parent Genuine Parts Company is rated BBB-, sell parts that customers often need right away, which has helped the sector hold up against online competition. Integrated oil companies such as Chevron (AA-) and ExxonMobil (AA-) carry some of the highest ratings in the sector, but most branded fuel stations are run by independent dealers or franchisees, so the oil company’s rating backs a lease only if it signs or guarantees it. In active listings InvestmentGrade.com tracks, the median asking cap rate is 5.30% for AutoZone and 6.00% for O’Reilly. The key underwriting question in every automotive deal is who signs the lease: a corporate AutoZone lease is a different credit from a franchisee-operated service center or a dealer-operated fuel site.

2. Bank

Summary:
Bank branches are leased by some of the most highly rated tenants in net lease. JPMorgan Chase Bank (AA-), Bank of America (A+), Wells Fargo Bank (A+), and TD Bank, whose parent the Toronto-Dominion Bank is rated A+, are all investment grade, and banks operate under federal capital and liquidity requirements. Banks are not uniformly the highest rated tenants, though: Microsoft and the University of Michigan, for example, carry higher ratings, and regional banks vary widely. In active listings InvestmentGrade.com tracks, the median asking cap rate is 5.00% for Chase and 5.50% for Bank of America. The main risk is branch consolidation as banking moves online, so remaining lease term, ground lease versus building lease, and the strength of the local market carry heavy weight in underwriting. Compare the specific rated entity and any guarantor rather than treating the sector as one credit.

3. Big Box / Junior Box / Large Retail

Summary:
Large-format retailers include some of the strongest credits in net lease. Walmart (AA), Costco (AA), Home Depot (A), and Target (A) are rated well into investment grade, and ground leases to these tenants are sought after by institutional buyers. Lowe’s (BBB+), Best Buy (BBB+), and Tractor Supply (BBB) are also investment grade. Among off-price retailers, TJX, parent of TJ Maxx (no verified rating), and Ross Stores (A-) are investment grade, while Burlington (BB+) is rated below investment grade. Kohl’s (S&P B+, Moody’s B2) is also speculative grade. In active listings InvestmentGrade.com tracks, the median asking cap rate is 6.00% for Tractor Supply and 7.63% for Kohl’s. Big box properties often carry larger price tags, so buyers frequently need larger equity or partners.

4. Convenience Stores

Summary:
7-Eleven (A-) is rated investment grade, and InvestmentGrade.com tracks 134 active 7-Eleven listings with a median asking cap rate of 5.00%. Circle K’s parent, Alimentation Couche-Tard (BBB+), is also investment grade. Casey’s General Stores is publicly traded (Nasdaq: CASY), and Moody’s rates it no verified rating. Wawa, Sheetz, and Buc-ee’s are privately held and have no public credit rating. Unrated does not mean weak: buyers price these leases on the operator’s record, any financial disclosure, and the real estate, and Wawa listings we track show a median asking cap rate of 5.00%. Fuel sites carry environmental considerations, so environmental reports and the lease’s environmental provisions matter.

5. Dollar Stores

Summary:
Dollar General (BBB) and Dollar Tree (BBB) are both rated investment grade. Dollar Tree sold Family Dollar in July 2025 to Brigade Capital Management and Macellum Capital Management, so Family Dollar leases should not be underwritten on Dollar Tree’s credit unless the lease carries a Dollar Tree guarantee; our ratings database shows no public rating for Family Dollar. Confirm the current tenant entity and any guarantor in each lease. In active listings InvestmentGrade.com tracks, the median asking cap rate is 7.00% for Dollar General, 7.40% for Dollar Tree, and 8.46% for Family Dollar. Many dollar stores sit in smaller markets, so remaining lease term, rent relative to the market, and re-leasing prospects drive underwriting.

6. Drug / Pharmacy

Summary:
CVS Health (BBB) is rated investment grade; confirm which CVS entity signs each lease and whether CVS Health Corporation guarantees it. Walgreens Boots Alliance was taken private by Sycamore Partners in 2025, and our ratings database shows no public rating for it; Walgreens has also been closing stores. Rite Aid liquidated in 2025 after its second bankruptcy filing. In active listings InvestmentGrade.com tracks, the median asking cap rate is 6.50% for CVS and 7.50% for Walgreens. Remaining lease term, store performance, and how easily the building could be re-leased are central to underwriting pharmacy properties.

7. Grocery

Summary:
Kroger (BBB) is rated investment grade. Whole Foods Market is owned by Amazon (AA), and Giant Food Stores is owned by Ahold Delhaize (BBB+); a parent’s rating backs a lease only if the parent signs or guarantees it. Albertsons (BB+) is rated below investment grade. Many major grocers, including Publix, Aldi, Trader Joe’s, H-E-B, and Meijer, are privately held without public credit ratings, so buyers rely on the operator’s record and the real estate. In active listings InvestmentGrade.com tracks, the median asking cap rate for Kroger is 5.00%. Grocery anchors also draw traffic that supports nearby pad sites and outparcels.

8. Healthcare

Summary:
Healthcare tenants range from nonprofit health systems with strong ratings to private equity owned operators with speculative ratings or none. Ascension Health Alliance (AA), the University of Michigan (AAA), and Piedmont Healthcare (AA-) are rated well into investment grade. Trinity Health (no verified rating) and CommonSpirit Health are separate systems; MercyOne has been part of Trinity Health since 2022. Dental, eye care, urgent care, and physical therapy operators owned by private equity are commonly rated in the B or CCC categories, or not rated. Dialysis providers DaVita (BB) and Fresenius Medical Care (BBB-), and plasma collectors such as BioLife (Takeda) and CSL Plasma, are common medical net lease tenants. In active listings InvestmentGrade.com tracks, the median asking cap rate for DaVita is 6.65%. The critical underwriting question is the lease obligor: a lease signed by a rated health system is a different credit from one signed by a single clinic entity or a heavily leveraged operator.

9. Restaurants

Summary:
Restaurants are among the most common net lease listings. McDonald’s (BBB+) and Starbucks (BBB+) are investment grade, and McDonald’s ground leases are among the lowest cap rate assets in net lease: in active listings InvestmentGrade.com tracks, the median asking cap rate is 4.00% for McDonald’s and 5.75% for Starbucks. Taco Bell’s parent Yum! Brands (BB+), Burger King’s parent Restaurant Brands International (BB+), and Wendy’s (B+) are rated below investment grade, and many of their restaurants are run by franchisees whose leases the parent does not guarantee. Casual dining tenants include Darden, parent of Olive Garden (BBB), Brinker, parent of Chili’s (BB+), and Dine Brands, parent of Applebee’s. Chick-fil-A is privately held and unrated, yet its listings show a median asking cap rate of 4.15%. In every restaurant deal, the difference between a corporate lease and a franchisee lease is central to pricing.

10. Retail

Summary:
“Retail (Other)” spans the widest credit range on the page. Microsoft (no verified rating) and Apple (AA+) are among the highest rated companies anywhere but rarely appear as net lease tenants. FedEx (BBB) and UPS (A) lease distribution and service facilities. At the other end, entertainment and specialty tenants such as AMC Theatres (B-) carry speculative ratings, and several former tenants on this list, including Bed Bath & Beyond, Party City, and Joann, have liquidated. For speculative-grade tenants, underwriting rests on store performance, lease terms, and how easily the space could be re-leased.

Bond Yield vs NNN Cap Rate Comparisons

For the tenants below we publish a side by side comparison of the company’s bond market yield and its NNN cap rates, with after-tax math, depreciation, and 1031 exchange treatment. The table compares the ICE BofA index yield for each tenant’s rating category with the median asking cap rate on its active listings, and links to each comparison page. The methodology is on the bond-to-NNN spread analysis.

Showing 18 tenants. Index yield is the ICE BofA effective yield index for the tenant’s rating category (US Corporate AAA, AA, A or BBB index; US High Yield BB, single-B or CCC and lower index), using the S&P rating, or the Moody’s equivalent where S&P does not rate, from the Federal Reserve Bank of St. Louis (FRED), as of October 1, 2026. It is an index average, not a quote on the company’s own bonds. Median asking cap rate is the median of asking cap rates (stated, or computed from stated income and price when no rate is stated) on active listings InvestmentGrade.com tracks, listings last observed October 5, 2026; asking cap rates are not closed-sale cap rates. Spread is the median asking cap rate minus the index yield. Ratings are the agency ratings in our ratings database for the entity shown; the rating type (for example issuer, senior unsecured debt, long-term debt or revenue bond ratings) varies by company. The entity that signs or guarantees a given lease can differ, so confirm the lease obligor. Shaded rows are below investment grade. NR means the agency does not rate the entity; n/a means no verified rating is on file. Not shown because fewer than 1 active listings with a published cap rate were observed: Costco.

Disclaimer: This information is provided for general reference only and does not constitute investment advice. Credit ratings are subject to change; always refer to the latest reports from S&P, Moody’s, or other reputable agencies for the most current ratings. Many of the tenants listed above also issue investment grade bonds that trade in the corporate bond market on the same underlying credit.