O'Reilly vs. Advance Auto Parts: NNN Cap Rates Compared

Ask most investors to name the safest net lease sectors and they’ll say pharmacy, dollar stores, or QSR. Auto parts rarely makes the list. That’s a mistake. Auto parts retail is one of the most genuinely recession-resistant businesses in America, and the net lease assets backing it offer attractive yields with surprising durability. When the economy tightens and people hold onto their cars longer, auto parts sales actually go up.

O'Reilly Auto Parts: The Quality Play (6.39% sold)

O’Reilly is the premium name in auto parts net lease. Our comp data puts recent sold deals around 6.39%, and it carries an investment-grade BBB credit rating, roughly 6,359 locations, and a market cap near $77.5 billion — making it one of the largest and most financially sound tenants in the sector.

O’Reilly leases typically run 20 years, often with a rent increase in year 11 and additional bumps in option periods. Average rent runs near $130,000 on about 7,200 square feet. On an asking basis O’Reilly lists around 6.15%, so buyers are negotiating modestly upward to the ~6.39% sold level. For investors who want auto-sector yield with investment-grade credit, O’Reilly is the clear choice.

Advance Auto Parts: The Yield Play (7.23% sold)

Advance Auto Parts trades meaningfully wider, at a 7.23% average sold cap rate (18 transactions), reflecting its BB+ credit rating (just below investment grade) and a smaller market cap near $3.2 billion. With roughly 4,700 locations and 15-year leases featuring increases in option periods, AAP offers a yield premium of more than 100 basis points over O’Reilly.

That spread is the whole story. You’re trading credit quality for cash flow. Average AAP deals run in the $1.1–1.5 million range — a very accessible price point — with the market averaging around 7.3%. For yield-focused investors comfortable with a sub-investment-grade tenant, AAP delivers strong current income.

Head to Head

Credit: O’Reilly’s BBB investment-grade rating beats AAP’s BB+. This is the primary driver of the cap rate spread.

Yield: AAP wins on current income, trading roughly 84 basis points wider than O’Reilly on a sold basis.

Lease term: O’Reilly’s 20-year leases offer more durability than AAP’s typical 15-year structure.

Price point: AAP’s sub-$1.5 million average makes it accessible to smaller investors. O’Reilly typically requires a bit more capital.

Scale and stability: O’Reilly’s larger footprint and stronger balance sheet make it the safer long-term hold.

Compare current ranges on our NNN Cap Rate tracker, or explore the full O’Reilly and Advance Auto Parts tenant profiles.

Why Auto Parts Belongs in a Net Lease Portfolio

The auto parts thesis is straightforward and durable. The average age of vehicles on U.S. roads keeps climbing, and older cars need more parts and service. When money is tight, consumers repair rather than replace, which drives DIY and professional auto parts demand. And critically, you cannot ship a car repair to someone’s door — the business is immune to e-commerce in a way few retail categories can claim.

For net lease investors, that means auto parts leases tend to perform through economic cycles, with tenants that renew because the locations work. The sector deserves a closer look than it typically gets.

The Bottom Line

If you want investment-grade credit and a longer lease, O’Reilly is your tenant. If you want a meaningful yield premium and a more accessible price point, Advance Auto Parts delivers — as long as you’re comfortable with the credit tradeoff. Either way, auto parts offers something increasingly rare: genuinely recession-proof, internet-proof income.