Per our tenant ratings database, O’Reilly Automotive, Inc., which operates O’Reilly Auto Parts, is rated BBB/Baa1 (S&P / Moody’s). Measured against the investment grade threshold of BBB-/Baa3, the database classifies it as investment grade. That company stands behind a lease only when O’Reilly Automotive, Inc. is the tenant or guarantor, so confirm both in the lease.
On August 10, 2026, O’Reilly priced $500 million of 5.050% senior notes due 2031 to yield 5.055%, according to its SEC term sheet. In the active O’Reilly listings we track, the live median asking cap rate is 6.00% across 27 listings. As a mixed-date illustration only, the median of 6.00% as of October 8, 2026 was about 95 basis points above the August 10 issuance yield; that is not a spread observed on a single date.
Bond yields have risen since the notes priced: the ICE BofA BBB US Corporate Index effective yield climbed from 5.60% on August 10 to 6.19% on October 1, 2026 (FRED series BAMLC0A4CBBBEY). As a conditional calculation, if the notes had moved with that index, they would have yielded roughly 5.65% on October 1, 2026, about 35 basis points below the October 8 median asking cap rate. The index covers many issuers and is not a quote for these notes; check current bond quotes before comparing.
For the full multi-company spread comparison, see the bond-to-NNN spread analysis. For the complete O’Reilly tenant analysis, see the O’Reilly Auto Parts Credit Rating and NNN Cap Rate page.
O’Reilly Credit Profile
| Metric | Details |
|---|---|
| S&P Rating | BBB |
| Moody’s Rating | Baa1 |
| Rating Sources on File | S&P Global Ratings BBB, Stable, as of August 10, 2026; Moody’s Baa1, Stable, as of August 10, 2026. Ratings checked October 8, 2026. |
| Rating Category | Investment Grade |
| Ticker | NASDAQ: ORLY |
| US Store Count | 6,541 incl. Puerto Rico (June 30, 2026) |
| Annual Sales | $17.78 billion (2025) |
The Spread: O’Reilly Bonds vs. NNN
| Metric | ORLY Corporate Bond | ORLY NNN Property |
|---|---|---|
| Yield / Cap Rate | 5.055% at pricing (Aug. 10, 2026); roughly 5.65% if it had tracked the BBB index to Oct. 1, 2026 (an estimate, not a quote) | 6.00% median asking cap rate (live) |
| Nominal Spread vs. Bond | Baseline | Mixed-date illustration as of Oct. 8, 2026: about 95 bps above the yield at pricing and about 35 bps above the Oct. 1 index-adjusted estimate, using the 6.00% median asking cap rate on that date |
| Investment Size | $2,000 face minimum, then $1,000 increments, per the notes’ prospectus supplement (bought through a broker) | Whole property; middle half of asking prices is $1.30M to $2.24M (live; as of October 8, 2026, each of the 29 O’Reilly listings we track stated an asking price) |
| Liquidity | Tradable on business days through a broker; individual issues can trade thinly | Often weeks to months to market and close |
| Income Taxation | Ordinary income (up to ~45.8% combined in our model) | Partly sheltered by building depreciation when the investor owns the building (land is not depreciable) |
| 1031 Exchange Eligible | No (only real property qualifies under IRC Section 1031(a)(1)) | Can qualify if held for investment or business use and the exchange rules are met |
| Depreciation Deduction | None | Building basis depreciated straight line over 39 years; a cost segregation study can reallocate part of that basis to shorter-lived property; an investor who owns only the land has no building to depreciate |
| Appreciation Potential | Repays par at maturity unless the issuer defaults; O’Reilly may redeem the notes early at its option (before the July 14, 2031 par call date at the greater of par or a make-whole price, and at par after it) | Real estate value can rise or fall |
| Lease Structure | N/A (debt instrument) | Net lease; O’Reilly’s 2025 Form 10-K says leases with unaffiliated parties generally provide for an original term of at least 10 years; confirm term, tenant entity and guaranty |
Bond yield at pricing for O’Reilly’s 5.050% senior notes due 2031 (August 10, 2026) is from O’Reilly’s SEC term sheet. The index-adjusted estimate adds the 0.59 percentage point rise in the ICE BofA BBB US Corporate Index effective yield from August 10 to October 1, 2026 (FRED series BAMLC0A4CBBBEY); it is an estimate, not a quote, and secondary market yields change daily. Listing figures marked live are asking figures across the active O’Reilly listings InvestmentGrade.com tracks and refresh with our weekly listings update; spread figures dated October 8, 2026 use the median on that date. Asking cap rates are not closing cap rates. Rating types: O’Reilly’s August 10, 2026 term sheet lists expected ratings of Baa1 (Stable) from Moody’s and BBB (Stable) from S&P for its senior notes; the Moody’s grade on file is that senior unsecured note rating, not a confirmed Moody’s issuer rating. Confirm current ratings and outlooks with the agencies.
Tax rows are general information, not tax advice, and assume a U.S. individual investor. The ~45.8% combined rate assumes the 37% top federal rate (IRC Section 1(j)), the 3.8% net investment income tax where it applies (IRC Section 1411), and about 5% state tax as a model assumption; actual rates vary. Nonresidential buildings are depreciated straight line over 39 years (IRC Section 168(b)(3) and (c)); land is not depreciable (Treas. Reg. 1.167(a)-2). On a taxable sale, unrecaptured section 1250 gain (generally the gain attributable to straight-line depreciation on the building) is taxed at a maximum federal rate of 25% (IRC Section 1(h)(1)(E) and (h)(6)), and other taxes, such as the net investment income tax and state tax, can apply. Cost segregation reallocates part of the building basis to shorter-lived property rather than adding deductions, and depreciation on components reclassified as personal property can be recaptured as ordinary income on a taxable sale (IRC Section 1245(a)). Only real property held for productive use in a trade or business or for investment qualifies for a 1031 exchange (IRC Section 1031(a)(1)), and the identification and timing rules of IRC Section 1031(a)(3) must be met. This is not investment advice.
Reading the Bond-to-NNN Spread
The 5.050% notes due 2031 priced on August 10, 2026 at 65 basis points over the benchmark Treasury, a 5.055% yield, according to O’Reilly’s SEC term sheet. The live median asking cap rate on the O’Reilly listings we track is 6.00%. Corporate yields have risen since the notes priced, so any premium of the median listing over these notes may have narrowed; the roughly 35 basis point figure above is a conditional estimate, not an observed spread.
A property buyer takes on risks a bondholder does not: a single store’s location, the cost of re-leasing if that store closes, a sale process that can take weeks to months, and property-level due diligence. The live median building size among the O’Reilly listings we track is 7,225 square feet. As of October 8, 2026, 24 of the 29 O’Reilly listings we track stated a lot size, with a median of 0.84 acres. A bondholder, by contrast, holds a claim on a company with $17.78 billion of 2025 sales and 33 consecutive years of comparable store sales growth through 2025.
For investors who see O’Reilly’s business as internet-resistant (customers often need parts immediately and value in-person expertise), any premium of a listing’s cap rate over the company’s bond yield is extra income on the same company’s credit only when O’Reilly Automotive, Inc. is the tenant or guarantor, and it comes with real estate risks the investor has to underwrite site by site.
O’Reilly vs. AutoZone: The Auto Parts Spread Comparison
Our tenant ratings database shows O’Reilly at BBB/Baa1 and AutoZone at BBB/Baa1 (S&P / Moody’s). Their recent bonds due 2031 priced within about 10 basis points of each other (O’Reilly 5.055% on August 10, 2026; AutoZone 4.971% on July 7, 2026). If both had tracked the ICE BofA BBB index to October 1, 2026 (FRED series BAMLC0A4CBBBEY), they would have yielded roughly 5.65% (O’Reilly) and 5.72% (AutoZone), an estimate rather than a quote. The live median asking cap rate in the listings we track is 6.00% for O’Reilly and 5.30% for AutoZone. As a dated conditional calculation using the October 8, 2026 medians (6.00% for O’Reilly and 5.30% for AutoZone), the median O’Reilly listing was about 35 basis points above its index-adjusted bond estimate and the median AutoZone listing about 42 basis points below its own; that is arithmetic on an index scenario, not an observed market spread. Some AutoZone listings are ground leases, and we had not identified any among the O’Reilly listings we track as of October 8, 2026, so compare like lease structures.
O’Reilly’s 5.050% notes due 2031 priced to yield 5.055% on August 10, 2026. As a mixed-date illustration, the median asking cap rate on the active O’Reilly listings we track was 6.00% as of October 8, 2026, about 95 basis points above that issuance yield. Corporate yields have risen since: if the notes had tracked the ICE BofA BBB index to October 1, 2026, they would have yielded roughly 5.65%, about 35 basis points below that median; that is a conditional estimate, not a quote. Check current bond quotes before comparing. After tax, as general information, an owner of the building can shelter part of the income with building depreciation, while bond interest is taxed as ordinary income; an investor who owns only the land under a ground lease has no building to depreciate.
O’Reilly’s 2025 Form 10-K says the total number of vehicles on the road and the average age of the vehicle population heavily influence demand for products sold within the automotive aftermarket industry. Investors who hold that view also point to same-day, in-person access to parts through O’Reilly’s network of 6,695 stores (June 30, 2026) and to in-store services such as its loaner tool program. Whether that holds for a particular store depends on its location and local competition.
O’Reilly’s 10-K says its leases with unaffiliated landlords generally have an original term of at least 10 years, with renewals at O’Reilly’s option, and provide for a fixed base rent and tenant payment of certain taxes, insurance, and maintenance. The bond is a senior unsecured obligation of O’Reilly Automotive, Inc. The underlying credit is the same company only when O’Reilly Automotive, Inc. is the tenant or guarantor, and the claims differ: a bondholder is an unsecured creditor for the full principal, while a landlord owns the real estate but has a claim for future rent after a lease rejection in bankruptcy that is capped under Section 502(b)(6) of the Bankruptcy Code.
1031 Buyer Shortcut: O’Reilly as an Auto Parts Alternative
O’Reilly can sit on a 1031 short list for a buyer who wants an auto parts tenant whose operator, O’Reilly Automotive, Inc., is rated BBB/Baa1. Before identifying a deal, compare the actual lease obligor and guarantor, store-level residual value, and lease term against the 1031 tenant-selection framework.
Benchmark next: 2026 NNN cap rates | AutoZone bonds vs NNN | NAPA / Genuine Parts bonds vs NNN
Considering O’Reilly NNN?
We source O’Reilly Auto Parts NNN properties nationally. On the majority of transactions, there is no separate fee to you as the buyer.
Find It: O’Reilly NNN with long lease terms, with the tenant entity and any guaranty confirmed.
Fund It: financing quotes that reflect the lease, the tenant entity and any guaranty, not the brand alone.
Exit It: buyers for O’Reilly NNN properties, including 1031 exchange buyers.
Exchange It: 1031 exchange into O’Reilly NNN with deadline-driven execution.
Benchmark O’Reilly Before Paying for the Credit
Check an O’Reilly NNN price against more than the BBB/Baa1 rating of O’Reilly Automotive, Inc., which supports a lease only when that company is the tenant or guarantor: the right price still depends on cap rate, lease term, rent level, and replacement-market depth. Compare any O’Reilly offering against current 2026 NNN cap rates by tenant credit quality, then use the 1031 tenant-selection framework to separate enterprise credit strength from store-level residual value.
Next reads: O’Reilly credit rating and NNN cap rate | AutoZone bonds vs. NNN | NAPA / Genuine Parts bonds vs. NNN | investment grade tenant ratings
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