v3.25.1
Leases
 3 Months Ended
Mar. 31, 2025
Leases [Abstract]  
Leases Leases
Lessor Leases

The Company has operating leases in which it is the lessor for its rental property. Certain leases contain variable lease payments based upon changes in the Consumer Price Index (“CPI”). Billings for real estate taxes and other expenses are also considered to be variable lease payments. Certain leases contain options to renew or terminate the lease, and options for the lessee to purchase the rental property, all of which are predominately at the sole discretion of the lessee.

The following table summarizes the components of rental income included in the accompanying Consolidated Statements of Operations for the three months ended March 31, 2025 and 2024.

 Three months ended March 31,
Rental Income (in thousands)20252024
Fixed lease payments$156,782 $142,111 
Variable lease payments43,759 42,189 
Straight-line rental income4,243 2,805 
Net increase to rental income related to above and below market lease amortization578 297 
Total rental income$205,362 $187,402 

As of March 31, 2025 and December 31, 2024, the Company had accrued rental income of approximately $122.2 million and $118.6 million, respectively, included in tenant accounts receivable on the accompanying Consolidated Balance Sheets.
As of March 31, 2025 and December 31, 2024, the Company’s total liability associated with lease security deposits was approximately $23.8 million and $23.9 million, respectively, which is included in tenant prepaid rent and security deposits on the accompanying Consolidated Balance Sheets.

Lessee Leases

The Company has operating leases in which it is the lessee for its ground leases and corporate office leases. These leases have remaining lease terms of approximately 1.1 years to 57.5 years. Certain ground leases contain options to extend the leases for ten years to 20 years, all of which are reasonably certain to be exercised, and are included in the computation of the Company’s right-of-use assets and operating lease liabilities.

The following table summarizes supplemental information related to operating lease right-of-use assets and operating lease liabilities recognized in the Company’s Consolidated Balance Sheets as of March 31, 2025 and December 31, 2024.

Operating Lease Term and Discount RateMarch 31, 2025December 31, 2024
Weighted average remaining lease term (years)35.134.9
Weighted average discount rate6.9 %6.9 %

The following table summarizes the operating lease cost included in the Company’s Consolidated Statements of Operations for the three months ended March 31, 2025 and 2024.

 Three months ended March 31,
Operating Lease Cost (in thousands)20252024
Operating lease cost included in property expense attributable to ground leases$697 $616 
Operating lease cost included in general and administrative expense attributable to corporate office leases430 430 
Total operating lease cost$1,127 $1,046 

The following table summarizes supplemental cash flow information related to operating leases in the Company’s Consolidated Statements of Cash Flows for the three months ended March 31, 2025 and 2024.

 Three months ended March 31,
Operating Leases (in thousands)20252024
Cash paid for amounts included in the measurement of lease liabilities (operating cash flows)$1,057 $989 

The following table summarizes the maturity of operating lease liabilities under the Company’s ground leases and corporate office leases as of March 31, 2025.

Year
Maturity of Operating Lease Liabilities(1) (in thousands)
Remainder of 2025$3,196 
20263,245 
20272,265 
20282,306 
20292,312 
Thereafter94,551 
Total lease payments107,875 
Less: Imputed interest(73,042)
Present value of operating lease liabilities$34,833 
(1)Operating lease liabilities do not include estimates of CPI rent changes required by certain ground lease agreements. Therefore, actual payments may differ from those presented.
Leases Leases
Lessor Leases

The Company has operating leases in which it is the lessor for its rental property. Certain leases contain variable lease payments based upon changes in the Consumer Price Index (“CPI”). Billings for real estate taxes and other expenses are also considered to be variable lease payments. Certain leases contain options to renew or terminate the lease, and options for the lessee to purchase the rental property, all of which are predominately at the sole discretion of the lessee.

The following table summarizes the components of rental income included in the accompanying Consolidated Statements of Operations for the three months ended March 31, 2025 and 2024.

 Three months ended March 31,
Rental Income (in thousands)20252024
Fixed lease payments$156,782 $142,111 
Variable lease payments43,759 42,189 
Straight-line rental income4,243 2,805 
Net increase to rental income related to above and below market lease amortization578 297 
Total rental income$205,362 $187,402 

As of March 31, 2025 and December 31, 2024, the Company had accrued rental income of approximately $122.2 million and $118.6 million, respectively, included in tenant accounts receivable on the accompanying Consolidated Balance Sheets.
As of March 31, 2025 and December 31, 2024, the Company’s total liability associated with lease security deposits was approximately $23.8 million and $23.9 million, respectively, which is included in tenant prepaid rent and security deposits on the accompanying Consolidated Balance Sheets.

Lessee Leases

The Company has operating leases in which it is the lessee for its ground leases and corporate office leases. These leases have remaining lease terms of approximately 1.1 years to 57.5 years. Certain ground leases contain options to extend the leases for ten years to 20 years, all of which are reasonably certain to be exercised, and are included in the computation of the Company’s right-of-use assets and operating lease liabilities.

The following table summarizes supplemental information related to operating lease right-of-use assets and operating lease liabilities recognized in the Company’s Consolidated Balance Sheets as of March 31, 2025 and December 31, 2024.

Operating Lease Term and Discount RateMarch 31, 2025December 31, 2024
Weighted average remaining lease term (years)35.134.9
Weighted average discount rate6.9 %6.9 %

The following table summarizes the operating lease cost included in the Company’s Consolidated Statements of Operations for the three months ended March 31, 2025 and 2024.

 Three months ended March 31,
Operating Lease Cost (in thousands)20252024
Operating lease cost included in property expense attributable to ground leases$697 $616 
Operating lease cost included in general and administrative expense attributable to corporate office leases430 430 
Total operating lease cost$1,127 $1,046 

The following table summarizes supplemental cash flow information related to operating leases in the Company’s Consolidated Statements of Cash Flows for the three months ended March 31, 2025 and 2024.

 Three months ended March 31,
Operating Leases (in thousands)20252024
Cash paid for amounts included in the measurement of lease liabilities (operating cash flows)$1,057 $989 

The following table summarizes the maturity of operating lease liabilities under the Company’s ground leases and corporate office leases as of March 31, 2025.

Year
Maturity of Operating Lease Liabilities(1) (in thousands)
Remainder of 2025$3,196 
20263,245 
20272,265 
20282,306 
20292,312 
Thereafter94,551 
Total lease payments107,875 
Less: Imputed interest(73,042)
Present value of operating lease liabilities$34,833 
(1)Operating lease liabilities do not include estimates of CPI rent changes required by certain ground lease agreements. Therefore, actual payments may differ from those presented.