v3.26.1
Leases
 3 Months Ended
Mar. 31, 2026
Leases [Abstract]  
Leases Leases
Lessor
The Company’s real estate properties are leased to tenants under operating leases with varying terms. Typically, the leases have provisions to extend the terms of the lease agreements. The Company retains substantially all of the risks and benefits of ownership of the real estate properties leased to tenants.
During the three months ended March 31, 2026, the Company received $1,812,000 from the tenant at the El Segundo Healthcare Facility related to development costs that were determined to be lessor-owned assets. This amount is recognized on a straight-line basis over the tenant's lease term within rental revenues in the accompanying condensed consolidated statements of comprehensive income.
The following table summarizes the Company’s rental revenue from operating leases for the three months ended March 31, 2026 and 2025 (amounts in thousands):
Three Months Ended
March 31,
 20262025
Rental income
$47,995 $44,097 
Variable lease income
4,065 4,159 
Total rental revenue
$52,060 $48,256 
Future rent to be received from the Company’s investments in real estate assets under the terms of non-cancellable operating leases in effect as of March 31, 2026, for the period ending December 31, 2026 and for each of the next four years ending December 31, and thereafter, are as follows (amounts in thousands):
March 31, 2026(1)
Period ending December 31, 2026$134,376 
2027179,892 
2028178,617 
2029174,675 
2030166,162 
Thereafter1,240,505 
Total$2,074,227 
(1)The table includes payments from a tenant who is on the cash basis of accounting for revenue recognition purposes that has continued to make rental payments as of March 31, 2026.
Lessee
The Company is subject to various non-cancellable operating lease agreements on which certain of its properties reside (ground leases) and for its corporate office. Additionally, the Company has one non-cancellable lease agreement that is classified as a finance lease related to a ground lease of a healthcare property.
The Company’s operating leases and finance lease do not provide implicit interest rates. In order to calculate the present value of the remaining operating and finance lease payments, the Company used incremental borrowing rates, or IBRs, adjusted for a number of factors. The determination of an appropriate IBR involves multiple inputs and judgments. The Company determined its IBRs considering the general economic environment, term of the underlying leases, and various financing and asset specific adjustments to ensure the IBRs are appropriate for the intended use of the underlying operating leases and finance lease.
The effects of the Company’s operating leases are recorded in right-of-use assets - operating leases and operating lease liabilities on the condensed consolidated balance sheets. The effects of the Company’s finance lease are recorded in right-of-use assets - finance lease and finance lease liabilities on the condensed consolidated balance sheets.
The future rent payments under non-cancellable leases in effect as of March 31, 2026, for the period ending December 31, 2026, and for each of the next four years ending December 31 and thereafter, are as follows (amounts in thousands):
Operating
Finance
Period ending December 31, 2026$2,080 $— 
20272,823 9 
20282,839 9 
20292,574 9 
20302,100 9 
Thereafter100,615 58 
Total undiscounted rental payments113,031 94 
Less imputed interest(72,581)(25)
Total lease liabilities$40,450 $69 
The weighted average IBR and weighted average remaining lease term as of March 31, 2026 and December 31, 2025 for the Company’s operating leases are as follows:
 March 31, 2026December 31, 2025
Weighted average IBR5.5 %5.5 %
Weighted average remaining lease term34.1 years34.2 years
The IBR and remaining lease term as of March 31, 2026 and December 31, 2025 for the Company's finance lease is as follows:
 March 31, 2026December 31, 2025
IBR
5.8 %5.8 %
Remaining lease term
10.3 years10.5 years
The following table provides details of the Company's total lease costs for the three months ended March 31, 2026 and 2025 (amounts in thousands):
Three Months Ended
March 31,
Location in Condensed Consolidated Statements of Comprehensive Income
20262025
Operating lease costs:
Ground lease costs(1)
Rental expenses$688 $689 
Corporate operating lease costsGeneral and administrative expenses180 183 
Finance lease costs:
Interest on lease liabilityInterest expense1 — 
Supplemental disclosure of cash flows information:
Operating cash outflows for operating leases(1)(2)
219 244 
Right-of-use assets obtained in exchange for new finance lease liabilities$— $74 
(1)The Company receives reimbursements from tenants for certain operating ground leases, which are recorded as rental revenue in the accompanying condensed consolidated statements of comprehensive income.
(2)Amounts are net of reimbursements the Company receives from tenants for certain operating ground leases.
Leases Leases
Lessor
The Company’s real estate properties are leased to tenants under operating leases with varying terms. Typically, the leases have provisions to extend the terms of the lease agreements. The Company retains substantially all of the risks and benefits of ownership of the real estate properties leased to tenants.
During the three months ended March 31, 2026, the Company received $1,812,000 from the tenant at the El Segundo Healthcare Facility related to development costs that were determined to be lessor-owned assets. This amount is recognized on a straight-line basis over the tenant's lease term within rental revenues in the accompanying condensed consolidated statements of comprehensive income.
The following table summarizes the Company’s rental revenue from operating leases for the three months ended March 31, 2026 and 2025 (amounts in thousands):
Three Months Ended
March 31,
 20262025
Rental income
$47,995 $44,097 
Variable lease income
4,065 4,159 
Total rental revenue
$52,060 $48,256 
Future rent to be received from the Company’s investments in real estate assets under the terms of non-cancellable operating leases in effect as of March 31, 2026, for the period ending December 31, 2026 and for each of the next four years ending December 31, and thereafter, are as follows (amounts in thousands):
March 31, 2026(1)
Period ending December 31, 2026$134,376 
2027179,892 
2028178,617 
2029174,675 
2030166,162 
Thereafter1,240,505 
Total$2,074,227 
(1)The table includes payments from a tenant who is on the cash basis of accounting for revenue recognition purposes that has continued to make rental payments as of March 31, 2026.
Lessee
The Company is subject to various non-cancellable operating lease agreements on which certain of its properties reside (ground leases) and for its corporate office. Additionally, the Company has one non-cancellable lease agreement that is classified as a finance lease related to a ground lease of a healthcare property.
The Company’s operating leases and finance lease do not provide implicit interest rates. In order to calculate the present value of the remaining operating and finance lease payments, the Company used incremental borrowing rates, or IBRs, adjusted for a number of factors. The determination of an appropriate IBR involves multiple inputs and judgments. The Company determined its IBRs considering the general economic environment, term of the underlying leases, and various financing and asset specific adjustments to ensure the IBRs are appropriate for the intended use of the underlying operating leases and finance lease.
The effects of the Company’s operating leases are recorded in right-of-use assets - operating leases and operating lease liabilities on the condensed consolidated balance sheets. The effects of the Company’s finance lease are recorded in right-of-use assets - finance lease and finance lease liabilities on the condensed consolidated balance sheets.
The future rent payments under non-cancellable leases in effect as of March 31, 2026, for the period ending December 31, 2026, and for each of the next four years ending December 31 and thereafter, are as follows (amounts in thousands):
Operating
Finance
Period ending December 31, 2026$2,080 $— 
20272,823 9 
20282,839 9 
20292,574 9 
20302,100 9 
Thereafter100,615 58 
Total undiscounted rental payments113,031 94 
Less imputed interest(72,581)(25)
Total lease liabilities$40,450 $69 
The weighted average IBR and weighted average remaining lease term as of March 31, 2026 and December 31, 2025 for the Company’s operating leases are as follows:
 March 31, 2026December 31, 2025
Weighted average IBR5.5 %5.5 %
Weighted average remaining lease term34.1 years34.2 years
The IBR and remaining lease term as of March 31, 2026 and December 31, 2025 for the Company's finance lease is as follows:
 March 31, 2026December 31, 2025
IBR
5.8 %5.8 %
Remaining lease term
10.3 years10.5 years
The following table provides details of the Company's total lease costs for the three months ended March 31, 2026 and 2025 (amounts in thousands):
Three Months Ended
March 31,
Location in Condensed Consolidated Statements of Comprehensive Income
20262025
Operating lease costs:
Ground lease costs(1)
Rental expenses$688 $689 
Corporate operating lease costsGeneral and administrative expenses180 183 
Finance lease costs:
Interest on lease liabilityInterest expense1 — 
Supplemental disclosure of cash flows information:
Operating cash outflows for operating leases(1)(2)
219 244 
Right-of-use assets obtained in exchange for new finance lease liabilities$— $74 
(1)The Company receives reimbursements from tenants for certain operating ground leases, which are recorded as rental revenue in the accompanying condensed consolidated statements of comprehensive income.
(2)Amounts are net of reimbursements the Company receives from tenants for certain operating ground leases.