Top Commercial Tenant Credit Ratings Q4 2025: What You Need to Know

Top Commercial Tenant Credit Ratings: What You Need to Know

When you invest in commercial real estate, the credit rating of your tenant isn’t a detail—you might as well call it your foundation. In a net lease or triple net (NNN) structure, the strength of your tenant’s creditworthiness underpins your cash flow, property value, and ability to secure favorable terms from lenders.

A tenant with investment-grade ratings (e.g. AAA, A, BBB, or Baa3 and above) helps you sleep at night. A non-investment grade tenant (e.g. BB / Ba, CCC / Caa) demands extra scrutiny, stronger guarantees, and careful lease design. In the context of commercial real estate, mastering tenant credit analysis is essential.

Below is an enhanced guide plus a live rankings list of rated tenants (retail, QSR, national chains) based on data from Moody’s, Fitch, S&P, Hanley IG and other available net-lease sources.

Note: Prefer this in a downloadable PDF you can reviwith? Click here to access this in post in presentation mode.

Why Tenant Credit Ratings Matter in CRE

• In commercial real estate (CRE), lenders often scrutinize the tenant’s rating almost as much as the property itself. A high-rated tenant reduces default risk and stabilizes cash flow, which directly supports valuation and debt service coverage.
• Rating agencies such as Moody’s, Standard & Poor’s (S&P), and Fitch produce ratings that assess the likelihood a company will meet its long-term financial commitments. These agencies classify ratings into investment-grade ratings (e.g. Aaa / AAA, Aa / AA, A, Baa / BBB) and speculative or high-risk grades (e.g. Ba / BB, B, Caa / CCC).
• Investing in investment-grade tenants often unlocks better financing terms, lower interest rates, easier refinancing, and more favorable cap rates.
• In the net lease / triple net (NNN) world, the tenant is responsible for most property expenses (taxes, insurance, maintenance), so the landlord’s reliance on that tenant’s credit is even greater.

What Goes Into a Tenant’s Credit Rating

A rating is not random—it emerges from a multidimensional analysis:

1. Financial strength & metrics
   • Operating income, EBITDA, margins, cash reserves
   • Debt levels and leverage ratios, interest coverage
   • Historical volatility and revenue trends
2. Industry dynamics & economic conditions
   • Some sectors—tech, fashion, QSR (quick-service restaurants), retail—are more cyclical or sensitive to consumer behavior
   • Others like utilities, healthcare, or energy (e.g. Exxon Mobil, Chevron) often command more stable assessments
3. Longevity, reputation & track record
   • History of meeting obligations, absence of liens or judgments
   • Presence of legal or credit events
4. Management quality & governance
   • Experienced leadership, clarity of strategy, resilience through downturns
5. Lease structure, term & guarantees
   • Longer lease term (10+ years) generally helps
   • Personal guarantees, corporate guarantees, letters of credit, or large security deposits shift risk off the landlord
   • Escalations, renewal options, restrictions on abatement or termination
6. Public records / external liabilities
   • UCC filings, lawsuits, off-balance sheet debt

When agencies like Moody’s or S&P assign a rating, they combine all of these factors and also stress-test future scenarios.

Understanding the Rating Scale

Here’s a quick map of how Moody’s and S&P / Fitch rating scales classify credit and where “investment grade vs non-investment grade” lies:

Agency / ScaleTop / BestInvestment Grade RangeSpeculative / Non-InvestmentDeep DistressMoody’sAaaAaa, Aa, A, Baa (down to Baa3)Ba, BCaa, Ca, CS&P / FitchAAAAAA, AA, A, BBB (down to BBB−)BB, B, CCCCC, C, D

So anything rated BBB / Baa3 or higher is considered investment grade; ratings of BB / Ba and under are non-investment grade.

Default probabilities also rise sharply once you drop into speculative territory (for example, Moody’s data shows much higher default rates for CCC / Caa vs BBB).

Live Ranking: Sample Rated Tenants (Retail, QSR, National Chains)

Using the latest Tenant Credit Ratings report from Moody’s, Hanley IG, Fitch, S&P and more (Q4 2024) as well as net-lease listings, here are rated tenants and their credit grades. (“NR” = not rated) = Top 100 Rated Tenants by Credit Quality (U.S. Commercial Real Estate Context)

Big Box / General Retail

• Walmart (Wal-Mart) — Aa2 / AA — Big Box
• Costco — Aa3 / AA — Big Box
• Target — A2 / A — Big Box
• Best Buy — A3 / BBB+ — Big Box
• BJ’s Wholesale Club — Ba1 / BB+ — Big Box
• Kohl’s — B2 / B+ — Big Box
• Staples — B3 (Private) / B− — Big Box
• The Michaels Companies — B3 (Private) / B− — Big Box

Restaurants / QSR (Quick-Service Restaurants)

• McDonald’s — Baa1 / BBB+ — Restaurants (QSR)
• Starbucks — Baa1 / BBB+ (neg) — Restaurants (QSR / Café)
• Yum! Brands (KFC, Taco Bell, Pizza Hut) — Ba2 / BB+ — Restaurants (QSR)
• Wendy’s — B3 / B+ — Restaurants (QSR)
• Restaurant Brands International (Burger King) — NR / BB (pos) — Restaurants (QSR)
• Brinker (Chili’s) — Ba3 / BB+ — Restaurants
• Bloomin’ Brands (Outback, Carrabba’s) — Ba3 / BB− — Restaurants
• Raising Cane’s — B1 / BB− — Restaurants (QSR)
• Darden (Olive Garden, LongHorn) — Baa2 / BBB — Restaurants

Energy / Fuel / Automotive

• Chevron — Aa2 / AA− — Automotive / Energy (Fuel)
• Exxon Mobil — Aa2 / AA− — Automotive / Energy (Fuel)
• Shell — Aa2 / A+ — Automotive / Energy (Fuel)
• BP — A1 / A− — Automotive / Energy (Fuel)
• Valero — Baa2 / BBB — Automotive / Energy (Fuel)
• Phillips 66 — Baa1 / BBB+ — Automotive / Energy (Fuel)
• Marathon Petroleum — Baa2 / BBB — Automotive / Energy (Fuel)
• AutoZone — Baa1 / BBB — Automotive Retail
• O’Reilly Auto Parts — Baa1 / BBB — Automotive Retail
• Goodyear — B1 / B+ — Tires / Auto
• Valvoline — Ba2 / BB — Auto Services
• Hertz — B2 / B — Auto Rental
• Avis Budget — Ba3 / BB — Auto Rental
• Bridgestone — A1 / A — Tires / Auto

Convenience / C-Store / Fuel

• 7-Eleven — Baa2 (Private) / A− — C-Store / Fuel
• Alimentation Couche-Tard (Circle K) — Baa1 / BBB+ — C-Store / Fuel

Grocery Chains

• Kroger — Baa1 / BBB — Grocer
• Ahold Delhaize (Stop & Shop, Giant) — Baa1 / BBB+ — Grocer
• Albertsons — Ba1 / BB+ — Grocer
• Publix — NR / NR — Grocer (institutionally popular NNN)
• Sprouts Farmers Market — NR / NR — Grocer

Home Improvement / DIY / Paint

• Home Depot — A2 / A — Home Improvement
• Lowe’s — Baa1 / BBB+ — Home Improvement
• Sherwin-Williams — Baa2 (pos) / BBB — Paint / DIY
• Tractor Supply — Baa1 / BBB — Farm & Ranch (Petsense)
• Floor & Decor — Ba3 / BB — Home Improvement
• Harbor Freight — B1 (Private neg) / BB− — Tools / DIY

Pharmacy / Healthcare Retail

• CVS Health — Baa3 / BBB− — Pharmacy
• Walgreens Boots Alliance — Ratings Withdrawn — Pharmacy
• Rite Aid — Ratings Withdrawn — Pharmacy

Conglomerates / Department Stores

• Berkshire Hathaway — Aa2 / AA — Multi-Sector Conglomerate
• Macy’s — Ba1 / BB+ — Department Stores

Additional Notable Investment-Grade Tenants Common in NNN / CRE

• Bank of America — A1 / A−
• JPMorgan Chase — Aa2 / AA−
• Wells Fargo — A1 / A−
• PNC Bank — A3 / A−
• Marshalls (TJX Companies) — A2 / A
• TJ Maxx (TJX Companies) — A2 / A
• Ross Stores — A3 / A−
• Burlington — Ba1 / BB+
• Dollar Tree — Ba2 / BB
• Family Dollar (subsidiary) — Ba2 / BB
• Dollar General — Baa1 / BBB
• Big Lots — B2 / B+
• Office Depot — B3 / B−
• Safeway (Albertsons unit) — Ba1 / BB+
• Winn-Dixie — B3 / B
• BJ’s Restaurants — B2 / B+
• Petsmart — B1 / BB−
• Whole Foods (Amazon subsidiary) — A1 / A+
• Amazon Retail (obligor) — Aa3 / AA−
• Publix Super Markets (reiterated) — strong private balance sheet, NR
• Macy’s (reiterated) — Ba1 / BB+
• Safeway (reiterated) — Ba1 / BB+

Interpreting & Using These Rankings

• A tenant with AAA / Aaa or AA / Aa grade is extremely low risk; rarely will you see it in retail, but some national operators or energy companies approach it.
• Brands in the A and BBB / Baa range are still considered investment-grade, but you must scrutinize lease structure and industry exposure.
• Once you dip into BB / Ba or B / CCC / C territory, the credit risk is substantially higher. You’ll need stronger offsets: heavier security, guarantees, shorter lease terms, more frequent financial reporting, etc.
• As interest rates rise, cost of capital increases; weak-rated tenants suffer more under that pressure, which may accelerate defaults or renegotiations.
• Real estate investors and CRE underwriters often set a minimum threshold like BBB− / Baa3 to qualify tenants as “safe.”

What About When MY Tenant is NOT a “Credit Tenant”?

Well, you just described 80%+ of commercial real estate. Most commercial leases are NOT signed with one of these highly rated groups, in fact, most leases are signed with newer entities with limited operating history and/or require some level of personal guarantee.  That’s where Otso comes in handy, we’re the leaders in automating and operationalizing private and hybrid credit commercial lease due diligence. We do it at scale for groups like Perform Properties, Nuveen, Phillips Edison and more…from the brand new to big-brand. We’ve got your deal covered.

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