v3.26.1
Leases
 6 Months Ended
Jun. 30, 2026
Leases [Abstract]  
Leases Leases
Lessor Accounting
The Company’s properties generally are leased pursuant to non-cancelable, fixed-term operating leases with expiration dates through 2054. Some leases provide tenants with fixed rent renewal terms while others have market rent renewal terms. Some leases provide the lessee, during the term of the lease, with an option or right of first refusal to purchase the leased property. The Company’s single-tenant net leases generally require the lessee to pay minimum rent and all taxes (including property tax), insurance, maintenance and other operating costs associated with the leased property.
The Company's leases have escalators that are predominately based on a stated percentage, while others are based on an index such as the Consumer Price Index ("CPI"). In addition, most of the Company's leases include non-lease components, such as reimbursement of operating expenses as additional rent, or include the reimbursement of expected operating expenses as part of the lease payment. The Company adopted an accounting policy to combine lease and non-lease components. Rent escalators based on indices and reimbursements of operating expenses that are not included in the lease rate are considered variable lease payments. Variable payments are recognized in the period earned. Lease income for the Company's operating leases, recognized for the three and six months ended June 30, 2026 was $270.6 million and $538.1 million, respectively. Lease income for the Company's operating leases, recognized for the three and six months ended June 30, 2025 was $287.1 million and $575.9 million, respectively.
Future lease payments under the non-cancelable operating leases, excluding any reimbursements and one sales-type lease, as of June 30, 2026, were as follows:
Dollars in thousandsOPERATING
2026 (remaining)$392,060 
2027741,330 
2028665,382 
2029571,871 
2030475,009 
2031 and thereafter1,984,644 
$4,830,296 
Lessee Accounting
The Company has obligations, as the lessee, under operating lease agreements consisting primarily of the Company’s ground leases. As of June 30, 2026, the Company had 169 ground leases associated with properties covering 12.6 million square feet. Some of the Company's ground lease renewal terms are based on fixed rent renewal terms, and others have market rent renewal terms. These ground leases typically have initial terms of 40 to 99 years with expiration dates through 2119. Any rental increases related to the Company’s ground leases are generally stated in the lease or based on CPI. The Company had 61 prepaid ground leases as of June 30, 2026. The amortization of the prepaid rent, included in the operating lease right-of-use asset, represented approximately $0.3 million and $0.3 million of the Company's rental expense for each of the three months ended June 30, 2026 and 2025, respectively, and $0.6 million and $0.7 million for each of the six months ended June 30, 2026 and 2025, respectively.
The Company’s future lease payments (primarily for its 108 non-prepaid ground leases), excluding amounts due for assets held for sale, as of June 30, 2026, were as follows:
Dollars in thousandsOPERATINGFINANCING
2026 (remaining)$4,573 $952 
20279,225 2,105 
20289,239 2,137 
20299,323 2,169 
20309,466 2,203 
2031 and thereafter421,448 379,759 
Total undiscounted lease payments463,274 389,325 
Discount(301,812)(315,226)
Lease liabilities$161,462 $74,099 
The following table provides details of the Company's total lease expense for the three and six months ended June 30, 2026 and 2025:
THREE MONTHS ENDED
June 30,		SIX MONTHS ENDED
June 30,
Dollars in thousands2026202520262025
Operating lease cost
Operating lease expense$2,692 $4,397 $6,116 $8,753 
Variable lease expense1,774 1,474 3,277 2,802 
Finance lease cost
Amortization of right-of-use assets379 370 745 741 
Interest on lease liabilities934 921 1,861 1,837 
Total lease expense$5,779 $7,162 $11,999 $14,133 
Other information
Operating cash outflows related to operating leases$3,943 $4,529 $7,256 $9,021 
Operating cash outflows related to financing leases$495 $576 $849 $1,119 
Financing cash outflows related to financing leases$18 $5 $42 $139 
Weighted-average years remaining lease term (excluding renewal options) - operating leases39.841.9
Weighted-average years remaining lease term (excluding renewal options) - finance leases56.557.2
Weighted-average discount rate - operating leases5.6 %5.5 %
Weighted-average discount rate - finance leases5.0 %5.0 %
Leases Leases
Lessor Accounting
The Company’s properties generally are leased pursuant to non-cancelable, fixed-term operating leases with expiration dates through 2054. Some leases provide tenants with fixed rent renewal terms while others have market rent renewal terms. Some leases provide the lessee, during the term of the lease, with an option or right of first refusal to purchase the leased property. The Company’s single-tenant net leases generally require the lessee to pay minimum rent and all taxes (including property tax), insurance, maintenance and other operating costs associated with the leased property.
The Company's leases have escalators that are predominately based on a stated percentage, while others are based on an index such as the Consumer Price Index ("CPI"). In addition, most of the Company's leases include non-lease components, such as reimbursement of operating expenses as additional rent, or include the reimbursement of expected operating expenses as part of the lease payment. The Company adopted an accounting policy to combine lease and non-lease components. Rent escalators based on indices and reimbursements of operating expenses that are not included in the lease rate are considered variable lease payments. Variable payments are recognized in the period earned. Lease income for the Company's operating leases, recognized for the three and six months ended June 30, 2026 was $270.6 million and $538.1 million, respectively. Lease income for the Company's operating leases, recognized for the three and six months ended June 30, 2025 was $287.1 million and $575.9 million, respectively.
Future lease payments under the non-cancelable operating leases, excluding any reimbursements and one sales-type lease, as of June 30, 2026, were as follows:
Dollars in thousandsOPERATING
2026 (remaining)$392,060 
2027741,330 
2028665,382 
2029571,871 
2030475,009 
2031 and thereafter1,984,644 
$4,830,296 
Lessee Accounting
The Company has obligations, as the lessee, under operating lease agreements consisting primarily of the Company’s ground leases. As of June 30, 2026, the Company had 169 ground leases associated with properties covering 12.6 million square feet. Some of the Company's ground lease renewal terms are based on fixed rent renewal terms, and others have market rent renewal terms. These ground leases typically have initial terms of 40 to 99 years with expiration dates through 2119. Any rental increases related to the Company’s ground leases are generally stated in the lease or based on CPI. The Company had 61 prepaid ground leases as of June 30, 2026. The amortization of the prepaid rent, included in the operating lease right-of-use asset, represented approximately $0.3 million and $0.3 million of the Company's rental expense for each of the three months ended June 30, 2026 and 2025, respectively, and $0.6 million and $0.7 million for each of the six months ended June 30, 2026 and 2025, respectively.
The Company’s future lease payments (primarily for its 108 non-prepaid ground leases), excluding amounts due for assets held for sale, as of June 30, 2026, were as follows:
Dollars in thousandsOPERATINGFINANCING
2026 (remaining)$4,573 $952 
20279,225 2,105 
20289,239 2,137 
20299,323 2,169 
20309,466 2,203 
2031 and thereafter421,448 379,759 
Total undiscounted lease payments463,274 389,325 
Discount(301,812)(315,226)
Lease liabilities$161,462 $74,099 
The following table provides details of the Company's total lease expense for the three and six months ended June 30, 2026 and 2025:
THREE MONTHS ENDED
June 30,		SIX MONTHS ENDED
June 30,
Dollars in thousands2026202520262025
Operating lease cost
Operating lease expense$2,692 $4,397 $6,116 $8,753 
Variable lease expense1,774 1,474 3,277 2,802 
Finance lease cost
Amortization of right-of-use assets379 370 745 741 
Interest on lease liabilities934 921 1,861 1,837 
Total lease expense$5,779 $7,162 $11,999 $14,133 
Other information
Operating cash outflows related to operating leases$3,943 $4,529 $7,256 $9,021 
Operating cash outflows related to financing leases$495 $576 $849 $1,119 
Financing cash outflows related to financing leases$18 $5 $42 $139 
Weighted-average years remaining lease term (excluding renewal options) - operating leases39.841.9
Weighted-average years remaining lease term (excluding renewal options) - finance leases56.557.2
Weighted-average discount rate - operating leases5.6 %5.5 %
Weighted-average discount rate - finance leases5.0 %5.0 %