As a lessee, we record right-of-use assets and lease liabilities for the two ground leases at our Kerrow Restaurant Operating Business and our corporate office space. The two ground leases have extension options, which we believe will be exercised and are included in the calculation of our lease liabilities and right-of-use assets. During the second quarter of 2025, the Company extended its lease of a corporate office space, which qualified as an operating lease as of June 30, 2025. In calculating the lease obligations under both the ground leases and office lease, we used discount rates estimated to be equal to what the Company would have to pay to borrow on a collateralized basis over a similar term, for an amount equal to the lease payments, in a similar economic environment.

Maturities of operating lease liabilities were as follows:


(In thousands)	June 30,
2025 (Six Months)	$	280
2026		721
2027		743
2028		755
2029		768
Thereafter		4,419
Total Payments		7,686
Less: Interest		(1,923	)
Operating Lease Liability	$	5,763

The weighted-average discount rate for operating leases at June 30, 2025 was 4.70%. The weighted-average remaining lease term was 12.8 years.

Rental expense was $226 thousand and $232 thousand for the three months ended June 30, 2025 and 2024, respectively. Rental expense was $457 thousand and $459 thousand for the six months ended June 30, 2025 and 2024, respectively.

Our leases consist primarily of single-tenant, net leases, in which the tenants are responsible for making payments to third parties for operating expenses such as property taxes, insurance, and other costs associated with the properties leased to them. In leases where costs are paid by the Company and reimbursed by lessees, such payments are considered variable lease payments and recognized in rental revenue.

The following table shows the components of rental revenue.


	Three Months Ended June 30,				Six Months Ended June 30,
(In thousands)	2025		2024		2025		2024
Lease revenue - operating leases	$	62,090	$	56,223	$	122,832	$	112,111
Variable lease revenue (tenant reimbursements)		2,724		2,316		5,464		5,001
Total Rental Revenue	$	64,814	$	58,539	$	128,296	$	117,112

The following table presents the scheduled minimum future contractual rent to be received under the remaining non-cancelable term of the operating leases. The table presents future minimum lease payments due during the initial lease term only as lease renewal periods are exercisable at the option of the lessee.


(In thousands)	June 30,
2025 (Six Months)	$	125,179
2026		251,097
2027		243,700
2028		217,457
2029		191,175
Thereafter		923,876
Total Future Minimum Lease Payments	$	1,952,484

As of both June 30, 2025 and December 31, 2024, the Company had finance ground lease assets aggregating $13.9 million, respectively. These assets are included in intangible real estate assets, net in the Consolidated Balance Sheets. The Company did not recognize a lease liability as no payments are due in the future under the leases. The Company’s ground lease assets have remaining terms ranging from 58.5 years to 93.5 years. All but two of these leases have options to extend certain of the lease terms for additional ninety-nine year terms, and all have the option to purchase the assets once certain conditions and contingencies are met. The weighted average remaining non-cancelable lease term for the ground leases was 88.6 years at June 30, 2025.