Starbucks NNN properties currently ask cap rates somewhat below the yields available on comparably rated corporate bonds. Starbucks Corporation is rated BBB+/Baa1 (S&P / Moody’s), and the same company is typically the tenant on leases for its company-operated stores. Across the active Starbucks listings we track as of October 4, 2026, the median asking cap rate is about 5.75%, while the ICE BofA BBB US Corporate Index effective yield was 6.19% on October 1, 2026 (FRED). Why would a buyer accept a lower nominal yield for the real estate? Because the comparison depends on structure: rent growth, 1031 exchange eligibility, land value and, when the buyer owns the building, depreciation.
This page compares the two instruments side by side. For the full methodology and multi-company comparison, see the bond-to-NNN spread analysis. For Starbucks credit and store detail, see the Starbucks credit rating and cap rate page and the tenant ratings database.
Starbucks Credit Profile
| Metric | Details |
|---|---|
| S&P Rating / Outlook | BBB+ |
| Moody’s Rating / Outlook | Baa1 |
| Investment Grade Status | Investment Grade |
| Ticker | NASDAQ: SBUX |
| US Store Count | 10,047 company-operated (Sept. 28, 2025); about 18,300 in North America including licensed stores |
| Annual Revenue | $37.2 billion (fiscal 2025) |
| Lease Structure | Starbucks Corporation is typically the tenant on company-operated stores; median original term of 10 years in our listings; confirm per lease |
The Spread: Starbucks Bonds vs NNN
| Metric | BBB-Rated Corporate Bonds (Index) | Starbucks NNN Property |
|---|---|---|
| Yield / Cap Rate | 6.19% (ICE BofA BBB US Corporate Index, Oct. 1, 2026) | ~5.75% median asking (5.3% to 6.2% middle half) |
| Nominal Spread vs Bond | Baseline | About -45 bps at the median (-85 to +5 bps across the middle half) |
| Minimum Investment | $2,000 minimum denomination on Starbucks notes sold in May 2025 (prospectus supplement) | ~$2.2M to $3.3M (middle half of asking prices, October 2026) |
| Liquidity | Tradable on business days through a broker; individual issues can trade thinly | Weeks to months to market and close; varies by property |
| Income Taxation | Ordinary income (37% federal + state + NIIT) | Fully taxable on a land-only ground lease; partly sheltered by building depreciation when the buyer owns the building |
| 1031 Exchange Eligible | No (IRC 1031(a)(1) covers real property only) | Yes, if held for business or investment use and exchanged for like-kind real property (IRC 1031(a)(1)) |
| Depreciation Deduction | None | None on land-only ground leases (land is not depreciable, Treas. Reg. 1.167(a)-2); 39 year straight line on an owned building (IRC 168(b)(3), 168(c)), and a cost segregation study may move some components to shorter lives |
| Appreciation Potential | Returns par at maturity absent default; market price moves before then | Real estate value can rise or fall |
| Rent / Coupon Growth | Fixed coupon (no inflation protection) | Scheduled increases, most often 10% every 5 years in our listings |
| Leverage Available | Varies by investor and broker | Financing often available; terms depend on the lease and the lender |
The bond column uses the BBB index effective yield (FRED) as a dated benchmark for Starbucks’ rating category; it is not a quote on a specific Starbucks bond, and individual Starbucks bonds may yield somewhat less than the index. NNN cap rates and prices are asking figures across 145 active single-tenant Starbucks listings (137 with a published cap rate) tracked by InvestmentGrade.com as of October 2026. This is not investment advice.
After Tax Comparison: $1,000,000 Invested in Starbucks Credit
Whether taxes change this comparison depends on what the buyer owns. Below is a side by side comparison assuming a high bracket investor (37 percent federal, 5 percent state, 3.8 percent NIIT, 45.8 percent combined), using the October 2026 benchmark yields above.
| Metric | BBB Bond (Index Yield) | Starbucks NNN Ground Lease (Land Only) | Starbucks NNN Fee Simple (Building Owned) |
|---|---|---|---|
| Investment | $1,000,000 | $1,000,000 | $1,000,000 |
| Annual Income / NOI | $61,900 | $57,500 | $57,500 |
| Annual Depreciation | $0 | $0 (land is not depreciable) | $20,513 (80% building, 39 year straight line) |
| Taxable Income | $61,900 | $57,500 | $36,987 |
| Tax at 45.8% Combined | ($28,350) | ($26,335) | ($16,940) |
| After Tax Income | $33,550 | $31,165 | $40,560 |
| After Tax Yield | 3.36% | 3.12% | 4.06% |
Assumes a 45.8 percent combined rate (37 percent federal, 3.8 percent net investment income tax, 5 percent state), unlevered, and a 5.75 percent cap rate (the October 2026 median asking cap rate in our listings) for both NNN columns; ground leases often ask lower cap rates than fee simple properties, which would lower the ground lease column. A land-only ground lease has nothing to depreciate (Treas. Reg. 1.167(a)-2), so the rent is taxed much like a bond coupon. The fee simple column allocates 80 percent of the price to the building and depreciates it straight-line over 39 years (IRC 168(b)(3), 168(c)). A cost segregation study can identify components that qualify for 100 percent bonus depreciation (IRC 168(k), as amended by Public Law 119-21 for property acquired after January 19, 2025), sheltering more income in the first year. That deduction is front-loaded and is generally recaptured on a taxable sale (IRC 1245, 1250); a 1031 exchange can defer gain, but recapture can still apply, for example on components that are not real property (IRC 1031(a)(1), 1245(b)(4), 1250(d)(4)). Consult a tax professional.
Why Starbucks NNN Prices Near the Bond Yield
Starbucks NNN asks higher cap rates than McDonald’s (about 5.75% versus about 4.0% at the median in our October 2026 listings). The structures differ too: in those listings Starbucks leases are shorter (a 10-year median original term versus 20 years for McDonald’s), fewer are ground leases (10 of 103 Starbucks listings that report it, versus 39 of 46 for McDonald’s), and Starbucks has been closing coffeehouses that do not meet its performance expectations. Drive-through sites are common in the Starbucks listings we track (84 of 145 listing descriptions mention a drive-thru as of October 2026); check the drive-through and whether another QSR user could adapt the building.
- Real estate quality. Starbucks says its company-operated stores are typically located in high-traffic, high-visibility locations (Form 10-K), though site quality varies and should be checked property by property.
- Contracted rent from a rated tenant. When Starbucks Corporation is the tenant, rent is backed by an investment grade company for the lease term, typically 10 years plus renewal options at Starbucks’ election.
- Buyer competition. Starbucks NNN can draw private investors, family offices and 1031 exchange buyers, though buyer depth varies with lease term and location.
- After tax math depends on structure. On a land-only ground lease the rent is taxed much like a bond coupon, so the edge comes from 1031 exchange deferral (IRC 1031(a)(1)), rent growth, land value and a basis reset to fair market value at death (IRC 1014(a)). Building depreciation adds a shield only when the buyer owns the improvements.
- 1031 exchange eligibility. A Starbucks property held for investment can be exchanged for other like-kind real property, deferring gain as long as the exchange rules are met (IRC 1031(a)(1)); depreciation recapture can still apply in some exchanges (IRC 1245(b)(4), 1250(d)(4)).
Key Underwriting Considerations for Starbucks NNN
- Lease term remaining. Short remaining terms carry renewal risk; look for 10 or more years where possible.
- Ground lease vs fee simple. Ground leases often ask lower cap rates (in the Starbucks listings we track, a 5.12% median across 10 ground leases versus 5.75% across the other 127 listings with a cap rate, October 2026), but provide no building depreciation (Treas. Reg. 1.167(a)-2).
- Rent escalation structure. Verify the schedule. Among the listings we track that disclose a schedule, 10% every five years is the most common; some carry smaller steps.
- Store closures. Starbucks closed 620 US company-operated stores in fiscal 2025 while opening 509, and on September 22, 2026 approved closing about 250 more North American stores, with about $200 million of cash charges mostly for lease exits and severance. A corporate lease means rent continues or an exit is negotiated, but check store performance and the site’s value to another user.
- Tenant entity. Confirm that Starbucks Corporation, not a licensee or another operator, is the tenant, and review current rating actions before closing.
Frequently Asked Questions
Starbucks is rated BBB+ by S&P and Baa1 by Moody’s.
Across the active listings we track as of October 4, 2026, the median Starbucks asking cap rate is about 5.75%, with the middle half between 5.3% and 6.2%. Lease term remaining, ground lease versus fee simple, location, and rent in place drive where a property falls. Asking cap rates are not closing cap rates.
Buyers value what a bond does not offer: scheduled rent increases, land ownership, 1031 exchange eligibility, and depreciation when the buyer owns the building. With the BBB index at 6.19% on October 1, 2026, a 5.75% median Starbucks cap rate is below comparable bond yields. After tax, a land-only ground lease lands close to the bond, while a fee simple property with building depreciation can come out ahead.
As of October 2026, the middle half of asking prices in the listings we track runs from about $2.2 million to $3.3 million, with a median near $2.8 million; price depends on market, traffic, lease term remaining, and rent in place.
At October 2026 yields, Starbucks NNN cap rates sit below comparable bond yields at the median. On after tax income, structure decides: a land-only ground lease has nothing to depreciate, so its rent is taxed much like a bond coupon and the after tax yields land close together; when the buyer owns the building, depreciation shelters part of the rent and the NNN after tax yield moves ahead of the bond.
Benchmark Starbucks NNN by Drive-Thru Format, Lease Term, and 1031 Buyer Depth
Before treating a Starbucks NNN lease as a bond substitute, compare the asking cap rate against the current 2026 NNN cap rates by tenant credit quality and the 1031 tenant-selection framework. Starbucks sits in the BBB+/Baa1 tier, so the real question is whether the lease term, drive-thru format, rent bumps, and 1031 buyer depth justify trophy pricing.
For adjacent tenant benchmarks, compare McDonald’s bonds vs NNN, Home Depot bonds vs NNN, and the broader Investment Grade Tenants database.
1031 Buyer Shortcut: Starbucks Drive-Thru Pricing Discipline
Starbucks drive-thru NNN can clear quickly with 1031 buyers, but investment grade credit does not automatically justify trophy pricing if the lease is short, rent is above market, or the site lacks residual reuse. Benchmark any Starbucks identification against the 1031 tenant-selection framework, the current 2026 NNN cap-rate framework, and adjacent QSR benchmarks such as McDonald’s and Chick-fil-A.
Considering Starbucks NNN?
We source Starbucks NNN properties nationally across lease terms and price points. On the majority of transactions, there is no separate fee to you as the buyer.
Find It: On market and off market Starbucks NNN sourced and underwritten for your criteria.
Fund It: Investment Grade Capital, a service of Investment Grade LLC, matches buyers with lenders. Starbucks’s BBB+/Baa1 credit can support competitive NNN financing terms when Starbucks Corporation is the tenant; terms depend on the lender and the lease.
Exit It: Starbucks NNN can draw private and 1031 exchange buyers, though demand varies with lease term and location.
Exchange It: 1031 exchange into or out of Starbucks NNN with deadline driven execution.
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 are approximate, fluctuate continuously, and are sourced from public market data as of the dates 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.
