Quarterly report pursuant to Section 13 or 15(d)

Leases

v3.24.3
Leases
 9 Months Ended
Sep. 30, 2024
Leases [Abstract]  
Leases
Note 11 – Leases
Lessor
As of September 30, 2024, the Company’s operating leases have non-cancelable lease terms ranging from 0.2 years to 16.3 years. Certain leases with tenants include tenant options to extend or terminate the lease agreements or to purchase the underlying assets. Lease agreements may also contain rent increases that are based on an index or rate (e.g., the consumer price index).
The components of rental revenue from the Company’s operating leases during the periods indicated below were as follows (in thousands):
Three Months Ended September 30, Nine Months Ended September 30,
2024 2023 2024 2023
Fixed:
Cash rental revenue $ 29,148  $ 35,491  $ 91,132  $ 108,005 
Straight-line rental revenue (1,283) 1,369  (974) 6,328 
Lease intangible amortization (68) 360  651  648 
Fixed property operating cost reimbursements 1,531  1,737  4,422  4,520 
Other fixed rental revenue 90  —  1,128  235 
Total fixed 29,418  38,957  96,359  119,736 
Variable:
Variable property operating cost reimbursements 8,786  9,203  27,451  28,364 
Other variable rental revenue 772  716  2,084  2,590 
Total variable 9,558  9,919  29,535  30,954 
Total rental revenue $ 38,976  $ 48,876  $ 125,894  $ 150,690 
The following table presents future minimum base rent payments due to the Company under the terms of its operating lease agreements, excluding expense reimbursements, over the next five years and thereafter as of September 30, 2024 (in thousands).
Future Minimum
Base Rent Payments
October 1, 2024 - December 31, 2024
 $ 26,506 
2025 89,393 
2026 88,837 
2027 68,891 
2028 55,236 
2029 41,624 
Thereafter 211,582 
Total $ 582,069 
Lessee
The Company is the lessee under ground lease arrangements and corporate office leases, which meet the criteria under U.S. GAAP for an operating lease. As of September 30, 2024, the Company’s operating leases had remaining lease terms ranging
from 1.2 years to 60.3 years, which includes options to extend. Under the operating leases, the Company pays rent and may also pay variable costs, including property operating expenses and common area maintenance. The weighted-average discount rate used to measure the lease liability for the Company’s operating leases was 3.76% as of September 30, 2024. As the Company’s leases do not provide an implicit rate, the Company used an estimated incremental borrowing rate based on the information available at the lease commencement date or the lease guidance adoption date, as applicable, in determining the present value of lease payments.
Operating lease costs were $0.3 million for the three months ended September 30, 2024 and 2023, and $0.9 million for the nine months ended September 30, 2024 and 2023. No cash paid for operating lease liabilities was capitalized for the three and nine months ended September 30, 2024 and 2023.
The following table reflects the maturity analysis of payments due from the Company over the next five years and thereafter for ground and corporate office lease obligations as of September 30, 2024 (in thousands).
Future Minimum Lease Payments
October 1, 2024 - December 31, 2024
 $ 292 
2025 1,184 
2026 778 
2027 752 
2028 761 
2029 473 
Thereafter 12,044 
Total 16,284 
Less: imputed interest 5,652 
Total $ 10,632 
Leases
Note 11 – Leases
Lessor
As of September 30, 2024, the Company’s operating leases have non-cancelable lease terms ranging from 0.2 years to 16.3 years. Certain leases with tenants include tenant options to extend or terminate the lease agreements or to purchase the underlying assets. Lease agreements may also contain rent increases that are based on an index or rate (e.g., the consumer price index).
The components of rental revenue from the Company’s operating leases during the periods indicated below were as follows (in thousands):
Three Months Ended September 30, Nine Months Ended September 30,
2024 2023 2024 2023
Fixed:
Cash rental revenue $ 29,148  $ 35,491  $ 91,132  $ 108,005 
Straight-line rental revenue (1,283) 1,369  (974) 6,328 
Lease intangible amortization (68) 360  651  648 
Fixed property operating cost reimbursements 1,531  1,737  4,422  4,520 
Other fixed rental revenue 90  —  1,128  235 
Total fixed 29,418  38,957  96,359  119,736 
Variable:
Variable property operating cost reimbursements 8,786  9,203  27,451  28,364 
Other variable rental revenue 772  716  2,084  2,590 
Total variable 9,558  9,919  29,535  30,954 
Total rental revenue $ 38,976  $ 48,876  $ 125,894  $ 150,690 
The following table presents future minimum base rent payments due to the Company under the terms of its operating lease agreements, excluding expense reimbursements, over the next five years and thereafter as of September 30, 2024 (in thousands).
Future Minimum
Base Rent Payments
October 1, 2024 - December 31, 2024
 $ 26,506 
2025 89,393 
2026 88,837 
2027 68,891 
2028 55,236 
2029 41,624 
Thereafter 211,582 
Total $ 582,069 
Lessee
The Company is the lessee under ground lease arrangements and corporate office leases, which meet the criteria under U.S. GAAP for an operating lease. As of September 30, 2024, the Company’s operating leases had remaining lease terms ranging
from 1.2 years to 60.3 years, which includes options to extend. Under the operating leases, the Company pays rent and may also pay variable costs, including property operating expenses and common area maintenance. The weighted-average discount rate used to measure the lease liability for the Company’s operating leases was 3.76% as of September 30, 2024. As the Company’s leases do not provide an implicit rate, the Company used an estimated incremental borrowing rate based on the information available at the lease commencement date or the lease guidance adoption date, as applicable, in determining the present value of lease payments.
Operating lease costs were $0.3 million for the three months ended September 30, 2024 and 2023, and $0.9 million for the nine months ended September 30, 2024 and 2023. No cash paid for operating lease liabilities was capitalized for the three and nine months ended September 30, 2024 and 2023.
The following table reflects the maturity analysis of payments due from the Company over the next five years and thereafter for ground and corporate office lease obligations as of September 30, 2024 (in thousands).
Future Minimum Lease Payments
October 1, 2024 - December 31, 2024
 $ 292 
2025 1,184 
2026 778 
2027 752 
2028 761 
2029 473 
Thereafter 12,044 
Total 16,284 
Less: imputed interest 5,652 
Total $ 10,632