v3.25.4
Leases
 12 Months Ended
Dec. 31, 2025
Leases [Abstract]  
Leases Leases
As Lessor
The Company’s investment properties are leased to tenants under long-term operating leases that typically include one or more tenant renewal options. The Company’s leases provide for annual base rental payments (generally payable in monthly installments), and generally provide for increases in rent based on fixed contractual terms or as a result of increases in the Consumer Price Index.
Substantially all of the leases are triple-net, which means that the lessees are responsible for paying all property operating expenses, including maintenance, insurance, utilities, property taxes and, if applicable, ground rent expense; therefore, the Company is generally not responsible for repairs or other capital expenditures related to the properties while the triple-net leases are in effect and, at the end of the lease term, the lessees are responsible for returning the property to the Company in a substantially similar condition as when they took possession. Some of the Company’s leases provide that in the event the Company wishes to sell the property subject to that lease, it first must offer the lessee the right to purchase the property on the same terms and conditions as any offer which it intends to accept for the sale of the property.
Scheduled future minimum base rent due to be received under the remaining non-cancelable term of operating leases in place as of December 31, 2025 were as follows:
(in thousands)Future Minimum Base Rental Receipts
2026$526,284 
2027532,160 
2028537,437 
2029542,397 
2030544,269 
Thereafter6,345,331 
Total$9,027,878 
Since lease renewal periods are exercisable at the option of the lessee, the preceding table presents future minimum base rental payments to be received during the initial non-cancelable lease term only. In addition, the future minimum lease payments exclude contingent rent payments, as applicable, that may be collected from certain tenants based on provisions related to gross sales thresholds and exclude increases in annual rent based on future changes in the Consumer Price Index, among other items.
The fixed and variable components of lease revenues for the years ended December 31, 2025, 2024, and 2023 were as follows:
Year ended December 31,
(in thousands)202520242023
Fixed lease revenues $527,509 $424,313 $338,720 
Variable lease revenues (1)
5,329 4,051 3,610 
Total lease revenues (2)
$532,838 $428,364 $342,330 
_____________________________________
(1)Includes contingent rent based on a percentage of the tenant’s gross sales and costs paid by the Company for which it is reimbursed by its tenants.
(2)Excludes the amortization and accretion of above- and below-market lease intangible assets and liabilities and lease incentives and the adjustment to rental revenue for tenant credit.
As Lessee
The Company has a number of ground leases, office leases and other equipment leases which are classified as operating leases. As of December 31, 2025, the Company's right of use ("ROU") assets and lease liabilities were $8.7 million and $8.8 million, respectively. As of December 31, 2024, the Company's ROU assets and lease liabilities were $8.8 million and $9.5 million, respectively. These amounts are included in rent receivables, prepaid expenses and other assets, net and accrued liabilities and other payables on the Company's consolidated balance sheets.
The discount rate applied to measure each ROU asset and lease liability is based on the Company's incremental borrowing rate ("IBR"). The Company considers the general economic environment and its historical borrowing activity and factors in various financing and asset specific adjustments to ensure the IBR is appropriate to the intended use of the underlying lease. As the Company did not elect to apply hindsight, lease term assumptions determined under ASC 840 were carried forward and applied in calculating the lease liabilities recorded under ASC 842. Certain of the Company's ground leases offer renewal options which it assesses against relevant economic factors to determine whether it is reasonably certain of exercising or not exercising the option. Lease payments associated with renewal periods that the Company is reasonably certain will be exercised, if any, are included in the measurement of the corresponding lease liability and ROU asset.
The following table sets forth information related to the measurement of the Company's lease liabilities as of the dates presented:
 December 31, 2025December 31, 2024
Weighted average remaining lease term (in years)24.423.3
Weighted average discount rate6.86%6.83%
The following table sets forth the details of rent expense for the years ended December 31, 2025, 2024 and 2023:
Year ended December 31,
(in thousands)202520242023
Fixed rent expense - Ground Rent$691 $761 $970 
Fixed rent expense - Office Rent720 670 606 
Variable rent expense— — — 
Total rent expense$1,411 $1,431 $1,576 
As of December 31, 2025, future lease payments under office and equipment operating leases to be paid by the Company directly and future lease payments under ground leases where the Company’s tenants are directly responsible for payment over the next five years and thereafter were as follows:
(in thousands)Office and Equipment LeasesGround LeasesTotal Future
Minimum
Base Rental
Payments
2026$226 $697 $923 
2027228 705 933 
2028233 729 962 
202960 743 803 
2030— 754 754 
Thereafter— 17,260 17,260 
Total$747 $20,888 21,635 
Present value discount(12,807)
Lease liabilities$8,828 
The Company has adopted the short-term lease policy election and accordingly, the table above excludes future minimum base cash rental payments by the Company or its tenants on leases that have a term of less than 12 months at lease inception. The total of such future obligations is not material.
Leases Leases
As Lessor
The Company’s investment properties are leased to tenants under long-term operating leases that typically include one or more tenant renewal options. The Company’s leases provide for annual base rental payments (generally payable in monthly installments), and generally provide for increases in rent based on fixed contractual terms or as a result of increases in the Consumer Price Index.
Substantially all of the leases are triple-net, which means that the lessees are responsible for paying all property operating expenses, including maintenance, insurance, utilities, property taxes and, if applicable, ground rent expense; therefore, the Company is generally not responsible for repairs or other capital expenditures related to the properties while the triple-net leases are in effect and, at the end of the lease term, the lessees are responsible for returning the property to the Company in a substantially similar condition as when they took possession. Some of the Company’s leases provide that in the event the Company wishes to sell the property subject to that lease, it first must offer the lessee the right to purchase the property on the same terms and conditions as any offer which it intends to accept for the sale of the property.
Scheduled future minimum base rent due to be received under the remaining non-cancelable term of operating leases in place as of December 31, 2025 were as follows:
(in thousands)Future Minimum Base Rental Receipts
2026$526,284 
2027532,160 
2028537,437 
2029542,397 
2030544,269 
Thereafter6,345,331 
Total$9,027,878 
Since lease renewal periods are exercisable at the option of the lessee, the preceding table presents future minimum base rental payments to be received during the initial non-cancelable lease term only. In addition, the future minimum lease payments exclude contingent rent payments, as applicable, that may be collected from certain tenants based on provisions related to gross sales thresholds and exclude increases in annual rent based on future changes in the Consumer Price Index, among other items.
The fixed and variable components of lease revenues for the years ended December 31, 2025, 2024, and 2023 were as follows:
Year ended December 31,
(in thousands)202520242023
Fixed lease revenues $527,509 $424,313 $338,720 
Variable lease revenues (1)
5,329 4,051 3,610 
Total lease revenues (2)
$532,838 $428,364 $342,330 
_____________________________________
(1)Includes contingent rent based on a percentage of the tenant’s gross sales and costs paid by the Company for which it is reimbursed by its tenants.
(2)Excludes the amortization and accretion of above- and below-market lease intangible assets and liabilities and lease incentives and the adjustment to rental revenue for tenant credit.
As Lessee
The Company has a number of ground leases, office leases and other equipment leases which are classified as operating leases. As of December 31, 2025, the Company's right of use ("ROU") assets and lease liabilities were $8.7 million and $8.8 million, respectively. As of December 31, 2024, the Company's ROU assets and lease liabilities were $8.8 million and $9.5 million, respectively. These amounts are included in rent receivables, prepaid expenses and other assets, net and accrued liabilities and other payables on the Company's consolidated balance sheets.
The discount rate applied to measure each ROU asset and lease liability is based on the Company's incremental borrowing rate ("IBR"). The Company considers the general economic environment and its historical borrowing activity and factors in various financing and asset specific adjustments to ensure the IBR is appropriate to the intended use of the underlying lease. As the Company did not elect to apply hindsight, lease term assumptions determined under ASC 840 were carried forward and applied in calculating the lease liabilities recorded under ASC 842. Certain of the Company's ground leases offer renewal options which it assesses against relevant economic factors to determine whether it is reasonably certain of exercising or not exercising the option. Lease payments associated with renewal periods that the Company is reasonably certain will be exercised, if any, are included in the measurement of the corresponding lease liability and ROU asset.
The following table sets forth information related to the measurement of the Company's lease liabilities as of the dates presented:
 December 31, 2025December 31, 2024
Weighted average remaining lease term (in years)24.423.3
Weighted average discount rate6.86%6.83%
The following table sets forth the details of rent expense for the years ended December 31, 2025, 2024 and 2023:
Year ended December 31,
(in thousands)202520242023
Fixed rent expense - Ground Rent$691 $761 $970 
Fixed rent expense - Office Rent720 670 606 
Variable rent expense— — — 
Total rent expense$1,411 $1,431 $1,576 
As of December 31, 2025, future lease payments under office and equipment operating leases to be paid by the Company directly and future lease payments under ground leases where the Company’s tenants are directly responsible for payment over the next five years and thereafter were as follows:
(in thousands)Office and Equipment LeasesGround LeasesTotal Future
Minimum
Base Rental
Payments
2026$226 $697 $923 
2027228 705 933 
2028233 729 962 
202960 743 803 
2030— 754 754 
Thereafter— 17,260 17,260 
Total$747 $20,888 21,635 
Present value discount(12,807)
Lease liabilities$8,828 
The Company has adopted the short-term lease policy election and accordingly, the table above excludes future minimum base cash rental payments by the Company or its tenants on leases that have a term of less than 12 months at lease inception. The total of such future obligations is not material.