Market Data
NNN Cap Rates 2026 by Tenant Credit
Investment-grade to non-prime cap rates for net lease properties. See how dollar General, AutoZone, CVS, and other major tenants price in 2026.
Updated Q2 2026. Reflects primary (Orlando/Tampa/Miami), secondary (Brevard/Jacksonville/Lakeland), and tertiary (Ocala/Panhandle) Florida markets.
NNN Cap Rates by Tenant Credit
Investment-grade = lower caps (stable tenants, low default risk). Non-prime = wider caps (higher risk compensation).
| Tenant Grade | Primary Market | Secondary | Tertiary |
|---|---|---|---|
| Investment-Grade (BBB-/Baa3+) Dollar General, AutoZone, Chick-fil-A 15–20 year leases, national scale, predictable performance | 5.0% – 5.5% | 5.5% – 6.25% | 6.0% – 6.75% |
| Upper-Mid Grade (BB+/Ba1) Regional chains, established franchisees 10–15 year leases, solid credit, regional presence | 5.5% – 6.25% | 6.0% – 7.0% | 6.5% – 7.5% |
| Mid-Grade (BB/Ba2) Local operators, smaller chains, mixed credit 5–10 year leases, moderate risk, re-leasing exposure | 6.25% – 7.0% | 6.75% – 7.75% | 7.0% – 8.5% |
| Non-Investment Grade (Below BB/Ba2) Startup tenants, weak operators, below-market credit High-yield play; default risk, frequent re-leasing, active management | 7.0% – 8.5%+ | 7.5% – 9.0%+ | 8.0% – 10.0%+ |
Top Tenants — Cap Rates 2026
| Tenant | Credit Grade | Cap Rate Range | Typical Lease |
|---|---|---|---|
| McDonald's | A | 4.75% – 5.25% | 20 years |
| Walgreens | BBB | 5.0% – 5.75% | 10–15 years |
| Dollar General | BBB+ | 5.0% – 5.5% | 10–15 years |
| AutoZone | BB+ | 5.25% – 6.0% | 10 years |
| Chick-fil-A | A- | 4.9% – 5.4% | 20 years |
| CVS | BBB | 5.0% – 5.75% | 10–15 years |
| Home Depot | A | 4.75% – 5.3% | 20 years |
| Local Restaurant (Franchisee) | BB- | 6.5% – 7.75% | 5–10 years |
Credit grades from S&P / Moody's. Actual cap rates vary by lease term, remaining term, property location, and sale date. Data as of Q2 2026.
Key Insights 2026
Investment-Grade Tightness
Investment-grade NNN (BBB-/Baa3+) remains compressed 5.0%–6.0% in primary markets as institutional capital hunts for credit quality and stability.
Lease Term Impact
10+ year remaining lease term = 50–100 bps tighter cap than 3–5 year remaining. Long lease security justifies lower yield.
Mid-Grade Opportunity
BB/Ba2 tenants offer 6.25%–7.75% caps — a sweet spot for value-add investors seeking yield without extreme re-leasing risk.
Non-Prime Volatility
Below-BB credit trades 7.0%–10.0%+ depending on business model, re-leasing history, and default risk. Requires active management.
NNN Cap Rate FAQ
Why do NNN cap rates vary by tenant credit?
Investment-grade tenants (BBB-/Baa3+) have predictable financial performance, strong market position, and low default risk — so investors accept lower cap rates. Non-prime tenants carry higher risk: poor credit history, smaller scale, economic sensitivity — so cap rates widen to compensate. Example: Dollar General (A credit, 5,000+ locations) = 5.0%–5.5%, vs. independent operator = 7.0%–8.0%+ for the same real estate.
What is investment-grade credit for NNN tenants?
Investment-grade credit means S&P BBB- or better (Moody's Baa3 or better). These are large, publicly-traded or well-established private companies with 10+ year operating history, strong cash flow, and proven economic resilience. Examples: McDonald's, Walgreens, Home Depot, AutoZone, Chick-fil-A. Investment-grade tenants rarely default and hold their real estate long-term, making them ideal for passive NNN investors.
Should I buy NNN from non-investment-grade tenants?
It depends on your risk tolerance and required return. Non-investment-grade (BB or below) offers 6.5%–8.5%+ cap rates — attractive for yield-focused investors. Tradeoffs: higher default risk, potential vacancy periods during re-leasing, need for property management expertise, and illiquidity. Many passive investors stick to investment-grade despite lower returns; value-add investors seek wider caps on non-prime and manage the risk actively.
What lease term should I target for NNN?
Target 10+ year remaining lease term. 15–20 years is ideal for passive income (minimal re-leasing risk). 5–10 years is acceptable if cap rate compensates for re-leasing risk in 5 years. <5 years remaining = treat as value-add (you'll need to re-lease). Longer lease term = lower cap rate (less risk = lower return). Shorter term = wider cap (more risk = higher return).
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