Auto parts stores are amongst the most resilient tenants in the triple net (NNN) market. The business model holds up in strong economies and weak ones (everyone has to fix and maintain their vehicles, regardless of how high inflation is), the buildings follow a standard format that easily re-tenants, and the two category leaders, AutoZone and O’Reilly, both carry investment-grade credit. For a NNN buyer who wants dependable income behind a corporate guarantee, an auto parts property deserves a closer look in 2026. This profile covers why the sector stays strong, how AutoZone and O’Reilly compare on credit and lease terms, what cap rates look like now, and how to size up an individual property.
Why Auto Parts Stores Are a Resilient NN or NNN Investment in 2026
The case for auto parts rests on a plain fact about the US car fleet. Per S&P Global Mobility, the average age of vehicles on US roads reached a record 12.8 years in 2025, the eighth straight year of increase.
A steady 4.5% scrappage rate means older cars are staying in service longer, as American consumers choose to maintain and repair old cars rather than purchase or lease new vehicles. More of those vehicles need paid repair and replacement parts, which feeds steady demand at auto retailers like AutoZone and O’Reilly.
AutoZone Lease Structure and Credit Profile
AutoZone (NYSE: AZO) is one of the two dominant names in the aftermarket auto parts category. The company carries an investment-grade credit rating of BBB from S&P and Baa2 from Moody’s, which indicates they experience a steady cash flow and a strong market position.
To note: Some AutoZone leases are structured as an absolute NNN. Still others are NN or a modified net lease with landlord responsibility for roof, structure and other capital items.
O’Reilly Auto Parts Lease Structure and Credit Profile
O’Reilly Auto Parts (NASDAQ: ORLY) also holds a strong credit in the category, with a BBB rating from S&P and Baa1 from Moody’s. The company keeps strong margins and continues to take market share, which supports their premium credit rating.
O’Reilly leases follow a 15-year primary term with multiple 5-year options and a corporate guarantee from the parent company, which removes franchisee credit concerns. The buildings run about 7,000 to 7,500 square feet on half-acre to one-acre parcels. O’Reilly also adds around 200 new stores per year, which gives 1031 buyers a steady supply of fresh, long-lease properties to consider.
As with AutoZone, some O’Reilly Auto Parts deals are structured as absolute NNN properties, but your advisor will confirm your final lease structure on a deal-by-deal basis.
Want help to evaluate an AutoZone or O’Reilly property for your portfolio? Westwood Net Lease Advisors represents buyers from the property search through closing, at no cost to you. Call 314-997-5227 for a no-obligation conversation.
AutoZone vs. O’Reilly: Credit and Cap Rates Compared
Both tenants offer investment-grade credit, standard buildings, and long corporate-guaranteed leases. The main difference sits in the credit tier, as O’Reilly is generally viewed as one of the strongest operators in the category.
For most buyers, the choice comes down to goals. A buyer who wants the strongest possible credit may lean toward O’Reilly. A buyer who wants a higher yield from an investment-grade tenant may prefer AutoZone. Both serve as solid anchors in a diversified investment portfolio.
What Auto Parts Cap Rates Look Like in 2026
Auto parts NNN properties generally trade in a range near 5.75% to 6.75%. (Though, pricing can change based on lease term, bumps, market, sales, roof and structure responsibility, and guarantor.) Urban core locations sit at the lower end, while secondary markets command higher yields. To understand what those numbers mean for your return, review how cap rates work in the NNN market. Some buyers also factor the state, since a property in a state with no income tax can lift net returns, based on where you file. Price points for auto parts stores often fall between $1.5 million and $4 million, a band that fits many 1031 exchange budgets. Well-priced properties move fast, and dispositions often close inside 30 to 60 days.
How to Evaluate an Auto Parts NNN Property
Creditworthiness is the start, not the finish, of your evaluative process. Weigh the lease structure (absolute NNN versus a modified net lease), the years left on the lease and the quality of the location. A new store with 15 years left on the lease in a community with steady population growth presents a different profile than a store with 5 years left in a thin market. The same discipline applies across tenant types, whether you weigh auto parts against dollar store tenants or another essential-retail category.
Lease structure deserves a close read. Most auto parts stores trade as fee-simple properties, where you own the land and the building. Some deals are absolute NNN, where the tenant covers every cost. Others are double net (NN), where the landlord keeps the roof and structure. That difference changes your long-term expense exposure, so confirm which one you buy before you sign. Check the guarantor as well. A corporate-guaranteed lease from AutoZone or O’Reilly carries the full strength of the parent company, while a franchisee guarantee from a regional operator presents a different risk. Read the rent schedule for the size and timing of escalations too, since those bumps drive your income growth across a long hold.
Purchase an Auto Parts NNN Property With Westwood
AutoZone and O’Reilly give NNN buyers a rare mix of investment-grade credit, recession-resistant demand, and predictable income. Westwood Net Lease Advisors helps buyers find and close on these properties, often before they reach the open market, at no cost to you. Contact us today at 314-997-5227 for a no-obligation conversation about auto parts and other triple net opportunities.
Westwood Net Lease Advisors does not provide tax, legal, or financial advice. Credit ratings reflect data available as of 2026 and can change. This article is informational.
