v3.26.1
Leases
 6 Months Ended
Jun. 30, 2026
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 June 30, 2026 were as follows:
(in thousands)
Future Minimum Base Rent Due
July 1 - December 31, 2026$422,081 
2027568,656 
2028574,530 
2029579,931 
2030581,571 
Thereafter
7,025,291 
Total$9,752,060 
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 three and six months ended June 30, 2026 and 2025 were as follows:
Three months ended June 30,Six months ended June 30,
(in thousands)2026202520262025
Fixed lease revenues$154,201 $128,413 $304,433 $250,318 
Variable lease revenues (1)
778 1,189 1,675 2,925 
Total lease revenues (2)
$154,979 $129,602 $306,108 $253,243 
_____________________________________
(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 June 30, 2026, the Company’s right of use ("ROU") assets and lease liabilities were $11.7 million and $13.3 million, respectively. As of December 31, 2025, the Company’s ROU assets and lease liabilities were $8.7 million and $8.8 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:
June 30, 2026December 31, 2025
Weighted average remaining lease term (in years)19.924.4
Weighted average discount rate7.22%6.86%
The following table sets forth the details of rent expense for the three and six months ended June 30, 2026 and 2025:
Three months ended June 30,Six months ended June 30,
(in thousands)2026202520262025
Fixed rent expense - ground leases$174 $171 $348 $343 
Fixed rent expense - office and equipment leases181 180 412 359 
Variable rent expense— — — — 
Total rent expense$355 $351 $760 $702 
As of June 30, 2026, 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
July 1 - December 31, 2026$336 $348 $684 
2027773 705 1,478 
2028790 729 1,519 
2029628 743 1,371 
2030579 754 1,333 
Thereafter5,019 17,260 22,279 
Total$8,125 $20,539 28,664 
Present value discount(15,363)
Lease liabilities$13,301 
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 June 30, 2026 were as follows:
(in thousands)
Future Minimum Base Rent Due
July 1 - December 31, 2026$422,081 
2027568,656 
2028574,530 
2029579,931 
2030581,571 
Thereafter
7,025,291 
Total$9,752,060 
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 three and six months ended June 30, 2026 and 2025 were as follows:
Three months ended June 30,Six months ended June 30,
(in thousands)2026202520262025
Fixed lease revenues$154,201 $128,413 $304,433 $250,318 
Variable lease revenues (1)
778 1,189 1,675 2,925 
Total lease revenues (2)
$154,979 $129,602 $306,108 $253,243 
_____________________________________
(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 June 30, 2026, the Company’s right of use ("ROU") assets and lease liabilities were $11.7 million and $13.3 million, respectively. As of December 31, 2025, the Company’s ROU assets and lease liabilities were $8.7 million and $8.8 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:
June 30, 2026December 31, 2025
Weighted average remaining lease term (in years)19.924.4
Weighted average discount rate7.22%6.86%
The following table sets forth the details of rent expense for the three and six months ended June 30, 2026 and 2025:
Three months ended June 30,Six months ended June 30,
(in thousands)2026202520262025
Fixed rent expense - ground leases$174 $171 $348 $343 
Fixed rent expense - office and equipment leases181 180 412 359 
Variable rent expense— — — — 
Total rent expense$355 $351 $760 $702 
As of June 30, 2026, 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
July 1 - December 31, 2026$336 $348 $684 
2027773 705 1,478 
2028790 729 1,519 
2029628 743 1,371 
2030579 754 1,333 
Thereafter5,019 17,260 22,279 
Total$8,125 $20,539 28,664 
Present value discount(15,363)
Lease liabilities$13,301 
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.