Sherwin-Williams’s Paint Stores Group had 4,853 company-operated specialty paint stores in the United States, Canada and the Caribbean at the end of 2025, of which 206 were owned (Form 10-K). In our ratings database its status is investment grade; see what investment grade means. The median asking cap rate on Sherwin-Williams listings we track, last observed October 16, 2026, is 6.00%, against a BBB bond index yield of 6.19% as of October 1, 2026, a spread of −19 bps.
Confirm whether the lease is signed by The Sherwin-Williams Company or a subsidiary. See the Sherwin-Williams credit rating and NNN cap rate page.
Sherwin-Williams Credit Profile
| Metric | Details |
|---|---|
| S&P rating / outlook | BBB |
| Moody’s rating / outlook | Baa2 |
| Status | Investment Grade |
| Rated entity in our database | The Sherwin-Williams Company |
| Rating sources | S&P Global Ratings BBB, as of August 6, 2026; Moody’s Baa2, as of July 29, 2025; Fitch Ratings BBB+, as of July 29, 2025. Ratings checked October 8, 2026. |
The Spread: Sherwin-Williams Bonds vs. NNN
The comparison uses the bond index yield for Sherwin-Williams’s rating category against the median asking cap rate on active Sherwin-Williams listings.
| Metric | Sherwin-Williams bonds (rating-category index) | Sherwin-Williams net lease properties |
|---|---|---|
| Latest yield measure | 6.19% (ICE BofA BBB index) | Median asking cap rate 6.00% (34 listings with a cap rate) |
| Spread, cap rate minus index yield | Baseline | −19 bps |
| Obligor | The issuing entity named in the bond’s indenture | The entity that signs or guarantees the lease |
| Minimum size | $2,000 face, then $1,000 increments, on the notes it sold in 2025 (due 2028, 2030 and 2035), per the prospectus supplement | $2.49M median asking price |
| Liquidity | Trades over the counter through dealers | Sale timing varies with the property, lease and market |
| Income taxation | Interest taxed as ordinary income (IRC 61(a)(4)) | Rent taxed as ordinary income (IRC 61(a)(5)), partly offset by depreciation of the building; land is not depreciable (Treas. Reg. 1.167(a)-2) |
| 1031 exchange | Not eligible (IRC 1031(a)(1) covers real property only) | Eligible when held for investment or business use and exchanged for like-kind real property held the same way (IRC 1031(a)(1)) |
| 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 Sherwin-Williams’s rating category via FRED, as of October 1, 2026; it is an index average, not a quote on Sherwin-Williams’s own bonds. Cap rate: median asking cap rate on active listings InvestmentGrade.com tracks, last observed October 16, 2026, a separate date from the index date; asking cap rates are not closed-sale cap rates. n/a means too few listings to report a median.
Why the Spread Exists
Sherwin-Williams paint stores serve contractors and do-it-yourself customers (Form 10-K), and the listings we track are small buildings (median 5,148 sq ft), so location and remaining term matter along with the credit. Remaining term varies by listing, averaging 7.5 years across the 9 that state one, and a shorter remaining term brings the renewal decision closer. A bond is a claim on the issuer as a whole, not on one store.
After-Tax Illustration
The table compares one full year of after-tax cash from a bond position and an all-cash net lease purchase of the same size, using the index yield and median asking cap rate shown above, with their observation dates. The bond column assumes a hypothetical bond bought at par with a coupon equal to that index yield; an actual note’s cash income depends on its coupon and purchase price. The real estate result depends heavily on depreciation; on a taxable sale, gain attributable to that depreciation on real property may be taxed at up to 25% as unrecaptured section 1250 gain (IRC 1(h)(1)(E) and 1(h)(6)), plus the net investment income tax where it applies (IRC 1411), so the comparison over a full holding period is narrower than a single year suggests. This is general information, not tax advice.
| One full year, $2,000,000 invested, all cash | Bond at 6.19% (BBB index) | NNN at 6.00% cap rate |
|---|---|---|
| Pre-tax income | $123,800 | $120,000 |
| Depreciation (building only, 80% of price over 39 years) | $0 | $41,026 |
| Taxable income | $123,800 | $78,974 |
| Federal tax at 40.8% | $50,510 | $32,222 |
| After-tax cash | $73,290 (3.66%) | $87,778 (4.39%) |
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
What is the spread between Sherwin-Williams bonds and NNN cap rates?
The median asking cap rate on Sherwin-Williams listings we track, last observed October 16, 2026, is 6.00%, against a BBB bond index yield of 6.19% as of October 1, 2026, a spread of −19 bps.
How is Sherwin-Williams rated?
The Sherwin-Williams Company is rated BBB by S&P and Baa2 by Moody’s, per our ratings database. Sources and dates: S&P Global Ratings BBB, as of August 6, 2026; Moody’s Baa2, as of July 29, 2025; Fitch Ratings BBB+, as of July 29, 2025. Ratings checked October 8, 2026.
Considering Sherwin-Williams Net Lease Property?
We source Sherwin-Williams 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; the listing broker pays a cooperating commission.
Find it: Sherwin-Williams properties across lease terms and markets.
Fund it: financing matched to the tenant’s credit and the remaining lease term.
Exit it: buyers for Sherwin-Williams 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.
