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. 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,
2026 (Six months)	$	368
2027		743
2028		755
2029		768
2030		626
Thereafter		3,794
Total Payments		7,054
Less: Interest		(1,659	)
Operating Lease Liability	$	5,395

The weighted-average discount rate for operating leases at June 30, 2026 was 4.7%. The weighted-average remaining lease term was 12.1 years.

Rental expense was $0.2 million for both the three months ended June 30, 2026 and 2025. Rental expense was $0.5 million for both the six months ended June 30, 2026 and 2025.

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)	2026		2025		2026		2025
Lease revenue - operating leases	$	67,199	$	62,090	$	134,208	$	122,832
Variable lease revenue (tenant reimbursements)		2,836		2,724		5,640		5,464
Total Rental Revenue	$	70,035	$	64,814	$	139,848	$	128,296

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,
2026 (Six months)	$	135,930
2027		268,347
2028		244,963
2029		218,433
2030		191,708
Thereafter		898,658
Total Future Minimum Lease Payments	$	1,958,039

As of June 30, 2026 and December 31, 2025, the Company had finance ground lease assets aggregating $13.8 million and $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 57 years to 92 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 years at June 30, 2026.