Understanding Triple Net Leases
Triple net (NNN) leases transfer property taxes, insurance, and maintenance costs to tenants while the landlord collects rent. Large corporate tenants structure most NNN arrangements this way, reducing landlord responsibility and operational overhead.
The NNN market has shifted significantly in recent years. Traditional anchors like pharmacy chains and discount retailers now face headwinds that impact long-term investment stability.
Premier NNN Tenants
Starbucks
Starbucks operates under 10-year triple net leases with 10% escalations every five years (NASDAQ: SBUX). The company maintains strong brand recognition in high-traffic suburban and urban locations. Lease structure is consistent across the portfolio, making financial projections relatively predictable.
Dollar General
This discount chain expanded rapidly into rural and underserved markets with small-format stores. Dollar General's price-point positioning makes it nearly recession-proof, as customers consider it essential retail. Properties require high visibility, easy access, and minimum 30-space parking.
CVS Pharmacy
As the second-largest U.S. pharmacy chain, CVS operates in a recession-resistant sector. Average sale price reaches $6,000,000 for 8,000-15,000 square feet on 1-4 acre lots. CVS offers long-term leases of 20-25 years.
AutoZone
AutoZone brings NNN certainty through corporate guarantees that reduce landlord risk. Cap rate averages 4.45%. Properties average $2,145,800 for 7,000-8,000 square feet on 0.5-1.5 acre lots. Standard lease terms: 15 years with 10% escalations every five years (Credit Rating: BBB).
Walgreens
Corner-lot locations with absolute NNN structure provide stable income at 5% cap rate. Locations typically span 14,500 square feet on 1.8-acre lots, averaging $6,000,000 in purchase price.
Chick-fil-A
This privately-held company offers NNN ground leases backed by strong corporate guarantees. Franchisee operations maintain low turnover. Average property price: $3,300,000 for 4,500-square-foot locations on 1.0-2.0 acre lots.
McDonald's
McDonald's operates as the premier quick-service restaurant (QSR) brand across primary, secondary, and tertiary markets (Credit Rating: BBB+). Standard lease: 20 years with 10% escalations every five years. Properties average $2,730,000 for 4,500 square feet on 0.75-1.25 acre lots. Brand preference: high-traffic areas with drive-through capability.
Advance Auto Parts
The company is transitioning to NNN structure from traditional NN leases. Average property cost: $1,840,000 for 6,000-7,000 square feet on 0.7-1.0 acre lots.
O'Reilly Auto Parts
O'Reilly functions as a solid NNN tenant with established market presence and competitive pricing.
Chipotle
Positioned in the fastest-growing restaurant segment, Chipotle offers 15-year NNN ground leases with 5-year escalations. Note: No current credit rating from S&P.
7-Eleven
7-Eleven provides investment-grade NNN opportunities with strong credit and brand recognition. Corner locations offer excellent access. Standard lease terms: 10-20 years. Average purchase price: $5,400,000 for 2,500-3,500 square feet.
Taco Bell
Franchisee operations mean cap rates vary by operator size and strength. Standard lease: 20 years with varied escalations. Properties average $2,615,500 for 2,200-2,600 square feet on 0.5-1.2 acre lots (Credit Rating: BB).
Highest Cap Rate NNN Tenants
Cap Rate Comparison:
- FedEx: 6.0% cap rate, BBB credit
- Advance Auto Parts: 5.9% cap rate, $1.84M avg. price, 6,000-7,000 sq. ft., BBB- credit
- Family Dollar: 5.8% cap rate, $1.55M avg. price, 6,000-8,000 sq. ft., BBB credit
- Dollar General: Hanley's Q3 2026 table lists S&P BBB, stable, as of July 1, 2026. Confirm the grade in the issuer's filings before treating the tenant as investment grade. Typical boxes are about 9,000-10,000 sq. ft.
- Starbucks: 5.1% cap rate, $2.70M avg. price, 1,500-2,000 sq. ft., BBB+ credit
Bottom Line
Select NNN tenants based on brand durability, traffic location, financial stability, and credit rating. Market dynamics require due diligence before committing long-term capital.