Net Investment in Sales-type Leases and Ground Lease Receivables (Tables)
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9 Months Ended |
Sep. 30, 2026 |
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| Net Investment in Sales-type Leases and Ground Lease Receivables |
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| Schedule of Net Investment in Sales Type Leases |
The Company’s net investment in sales-type leases were comprised of the following ($ in thousands): | | | | | | | | | September 30, 2026 | | December 31, 2025 | Total undiscounted cash flows(1) | | $ | 36,370,600 | | $ | 34,314,838 | Unguaranteed estimated residual value(1) | | | 3,137,498 | | | 3,099,768 | Present value discount | | | (35,763,747) | | | (33,840,181) | Allowance for credit losses | | | (12,045) | | | (10,750) | Net investment in sales-type leases | | $ | 3,732,306 | | $ | 3,563,675 |
| (1) | As of September 30, 2026, total discounted cash flows were approximately $3,709 million and the discounted unguaranteed estimated residual value was $35.0 million. As of December 31, 2025, total discounted cash flows were approximately $3,541 million and the discounted unguaranteed estimated residual value was $33.7 million. |
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| Schedule of rollforward of net investment in sales-type leases and Ground Lease receivables |
The following table presents a rollforward of the Company’s net investment in sales-type leases and Ground Lease receivables for the nine months ended September 30, 2026 and 2025 ($ in thousands): | | | | | | | | | | | | Net Investment in | | Ground Lease | | | | | | Sales-type Leases | | Receivables | | Total | Nine Months Ended September 30, 2026 | | | | | | | | | | Beginning balance | | $ | 3,563,675 | | $ | 2,003,931 | | $ | 5,567,606 | Origination/acquisition/fundings(1) | | | 118,650 | | | 173,401 | | | 292,051 | Accretion | | | 51,276 | | | 29,773 | | | 81,049 | (Provision for) recovery of credit losses | | | (1,295) | | | (723) | | | (2,018) | Ending balance(2) | | $ | 3,732,306 | | $ | 2,206,382 | | $ | 5,938,688 |
| | | | | | | | | | | | Net Investment in | | Ground Lease | | | | | | Sales-type Leases | | Receivables | | Total | Nine Months Ended September 30, 2025 | | | | | | | | | | Beginning balance | | $ | 3,454,953 | | $ | 1,833,398 | | $ | 5,288,351 | Origination/acquisition/fundings(1) | | | 25,770 | | | 103,303 | | | 129,073 | Accretion | | | 48,697 | | | 26,646 | | | 75,343 | (Provision for) recovery of credit losses | | | (2,145) | | | (2,328) | | | (4,473) | Ending balance(2) | | $ | 3,527,275 | | $ | 1,961,019 | | $ | 5,488,294 |
| (1) | The net investment in sales-type leases is initially measured at the present value of the fixed and determinable lease payments, including any guaranteed or unguaranteed estimated residual value of the asset at the end of the lease, discounted at the rate implicit in the lease. For newly originated or acquired Ground Leases, the Company’s estimate of residual value equals the fair value of the land at lease commencement. |
| (2) | As of September 30, 2026 and December 31, 2025, all of the Company’s net investment in sales-type leases and Ground Lease receivables were current in their payment status. As of September 30, 2026, the Company’s weighted average accrual rate for its net investment in sales-type leases and Ground Lease receivables was 5.4% and 5.8%, respectively. As of September 30, 2026, the weighted average remaining life of the Company’s 61 Ground Lease receivables was 95.8 years. |
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| Schedule of changes in allowance for credit losses on net investment in sales-type leases and Ground Lease receivables |
Allowance for Credit Losses—Changes in the Company’s allowance for credit losses on net investment in sales-type leases for the three and nine months ended September 30, 2026 and 2025 were as follows ($ in thousands): | | | | | | | | | | | | | | | Net investment in sales-type leases | | | Stabilized | | Development | | Unfunded | | | Three Months Ended September 30, 2026 | | Properties | | Properties | | Commitments | | Total | Allowance for credit losses at beginning of period | | $ | 10,490 | | $ | 648 | | $ | 50 | | $ | 11,188 | Provision for (recovery of) credit losses(1) | | | 821 | | | 86 | | | (1) | | | 906 | Allowance for credit losses at end of period(2) | | $ | 11,311 | | $ | 734 | | $ | 49 | | $ | 12,094 | | | | | | | | | | | | | | Three Months Ended September 30, 2025 | | | | | | | | | Allowance for credit losses at beginning of period | | $ | 7,833 | | $ | 497 | | $ | 30 | | $ | 8,360 | Provision for (recovery of) credit losses(1) | | | 607 | | | 29 | | | — | | | 636 | Allowance for credit losses at end of period(2) | | $ | 8,440 | | $ | 526 | | $ | 30 | | $ | 8,996 | | | | | | | | | | | | | | Nine Months Ended September 30, 2026 | | | | | | | | | Allowance for credit losses at beginning of period | | $ | 10,214 | | $ | 536 | | $ | 32 | | $ | 10,782 | Provision for (recovery of) credit losses(1) | | | 1,097 | | | 198 | | | 17 | | | 1,312 | Allowance for credit losses at end of period(2) | | $ | 11,311 | | $ | 734 | | $ | 49 | | $ | 12,094 | | | | | | | | | | | | | | Nine Months Ended September 30, 2025 | | | | | | | | | Allowance for credit losses at beginning of period | | $ | 6,385 | | $ | 436 | | $ | — | | $ | 6,821 | Provision for (recovery of) credit losses(1) | | | 2,055 | | | 90 | | | 30 | | | 2,175 | Allowance for credit losses at end of period(2) | | $ | 8,440 | | $ | 526 | | $ | 30 | | $ | 8,996 |
| (1) | During the three months ended September 30, 2026 and 2025, the Company recorded provisions for credit losses on net investment in sales-type leases of $0.9 million and $0.6 million, respectively. The provision for credit losses for the three months ended September 30, 2026 was due primarily to growth in the carrying value of the portfolio during the period and a worsening macroeconomic forecast since June 30, 2026. The provision for credit losses for the three months ended September 30, 2025 was due primarily to then current market conditions, including an increase in the Ground Lease cost to value ratio on the Company’s portfolio of Ground Leases since June 30, 2025, and growth in the carrying value of the portfolio during the period. During the nine months ended September 30, 2026 and 2025, the Company recorded provisions for credit losses on net investment in sales-type leases of $1.3 million and $2.2 million, respectively. The provision for credit losses for the nine months ended September 30, 2026 was due primarily to growth in the carrying value of the portfolio during the period and a worsening macroeconomic forecast since December 31, 2025, which was partially offset by a decrease in the Ground Lease cost to value ratio on the Company’s portfolio of Ground Leases since December 31, 2025. The provision for credit losses for the nine months ended September 30, 2025 was due primarily to then current market conditions, including an increase in the Ground Lease cost to value ratio on the Company’s portfolio of Ground Leases since December 31, 2024, and growth in the carrying value of the portfolio during the period. |
| (2) | Allowance for credit losses on unfunded commitments is recorded in “Accounts payable and accrued expenses” on the Company’s consolidated balance sheets. |
Changes in the Company’s allowance for credit losses on Ground Lease receivables for the three and nine months ended September 30, 2026 and 2025 were as follows ($ in thousands): | | | | | | | | | | | | | | | Ground Lease receivables | | | Stabilized | | Development | | Unfunded | | | Three Months Ended September 30, 2026 | | Properties | | Properties | | Commitments | | Total | Allowance for credit losses at beginning of period | | $ | 3,704 | | $ | 1,430 | | $ | 101 | | $ | 5,235 | Provision for (recovery of) credit losses(1) | | | 290 | | | 171 | | | (51) | | | 410 | Allowance for credit losses at end of period(2) | | $ | 3,994 | | $ | 1,601 | | $ | 50 | | $ | 5,645 | | | | | | | | | | | | | | Three Months Ended September 30, 2025 | | | | | | | | | Allowance for credit losses at beginning of period | | $ | 4,423 | | $ | 1,167 | | $ | 44 | | $ | 5,634 | Provision for (recovery of) credit losses(1) | | | 297 | | | 105 | | | (12) | | | 390 | Allowance for credit losses at end of period(2) | | $ | 4,720 | | $ | 1,272 | | $ | 32 | | $ | 6,024 | | | | | Nine Months Ended September 30, 2026 | | | | | | | | | Allowance for credit losses at beginning of period | | $ | 3,587 | | $ | 1,285 | | $ | 84 | | $ | 4,956 | Provision for (recovery of) credit losses(1) | | | 407 | | | 316 | | | (34) | | | 689 | Allowance for credit losses at end of period(2) | | $ | 3,994 | | $ | 1,601 | | $ | 50 | | $ | 5,645 | | | | | | | | | | | | | | Nine Months Ended September 30, 2025 | | | | | | | | | Allowance for credit losses at beginning of period | | $ | 2,652 | | $ | 1,012 | | $ | 37 | | $ | 3,701 | Provision for (recovery of) credit losses(1) | | | 2,068 | | | 260 | | | (5) | | | 2,323 | Allowance for credit losses at end of period(2) | | $ | 4,720 | | $ | 1,272 | | $ | 32 | | $ | 6,024 |
| (1) | During the three months ended September 30, 2026 and 2025, the Company recorded provisions for credit losses on Ground Lease receivables of $0.4 million and $0.4 million, respectively. The provision for credit losses for the three months ended September 30, 2026 was due primarily to growth in the carrying value of the portfolio during the period and a worsening macroeconomic forecast since June 30, 2026. The provision for credit losses for the three months ended September 30, 2025 was due primarily to then current market conditions, including an increase in the Ground Lease cost to value ratio on the Company’s portfolio of Ground Leases since June 30, 2025, and growth in the carrying value of the portfolio during the period. During the nine months ended September 30, 2026 and 2025, the Company recorded provisions for credit losses on Ground Lease receivables of $0.7 million and $2.3 million, respectively. The provision for credit losses for the nine months ended September 30, 2026 was due primarily to growth in the carrying value of the portfolio during the period and a worsening macroeconomic forecast since December 31, 2025, which was partially offset by a decrease in the Ground Lease cost to value ratio on the Company’s portfolio of Ground Leases since December 31, 2025. The provision for credit losses for the nine months ended September 30, 2025 was due primarily to then current market conditions, including an increase in the Ground Lease cost to value ratio on the Company’s portfolio of Ground Leases since December 31, 2024. |
| (2) | Allowance for credit losses on unfunded commitments is recorded in “Accounts payable and accrued expenses” on the Company’s consolidated balance sheets. |
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| Schedule of Amortized Cost Basis in Ground Lease Receivables |
The Company’s amortized cost basis in net investment in sales-type leases and Ground Lease receivables, presented by year of origination and by stabilized or development status, was as follows as of September 30, 2026 ($ in thousands): | | | | | | | | | | | | | | | | | | | | | | | | Year of Origination | | | | | | 2026 | | 2025 | | 2024 | | 2023 | | 2022 | | Prior to 2022 | | Total | Net investment in sales-type leases | | | | | | | | | | | | | | | | | | | | | | Stabilized properties | | $ | — | | $ | 23,262 | | $ | 37,069 | | $ | 52,065 | | $ | 673,762 | | $ | 2,483,296 | | $ | 3,269,454 | Development properties | | | 82,561 | | | 58,678 | | | 116,808 | | | 22,830 | | | 39,729 | | | 154,291 | | | 474,897 | Total | | $ | 82,561 | | $ | 81,940 | | $ | 153,877 | | $ | 74,895 | | $ | 713,491 | | $ | 2,637,587 | | $ | 3,744,351 |
| | | | | | | | | | | | | | | | | | | | | | | | Year of Origination | | | | | | 2026 | | 2025 | | 2024 | | 2023 | | 2022 | | Prior to 2022 | | Total | Ground Lease receivables | | | | | | | | | | | | | | | | | | | | | | Stabilized properties | | $ | 29,606 | | $ | 38,638 | | $ | — | | $ | 20,278 | | $ | 161,225 | | $ | 900,114 | | $ | 1,149,861 | Development properties | | | 52,663 | | | 122,083 | | | 132,560 | | | 25,253 | | | 648,334 | | | 81,223 | | | 1,062,116 | Total | | $ | 82,269 | | $ | 160,721 | | $ | 132,560 | | $ | 45,531 | | $ | 809,559 | | $ | 981,337 | | $ | 2,211,977 |
The Company’s amortized cost basis in net investment in sales-type leases and Ground Lease receivables, presented by year of origination and by stabilized or development status, was as follows as of December 31, 2025 ($ in thousands): | | | | | | | | | | | | | | | | | | | | | | | | Year of Origination | | | | | | 2025 | | 2024 | | 2023 | | 2022 | | 2021 | | Prior to 2021 | | Total | Net investment in sales-type leases | | | | | | | | | | | | | | | | | | | | | | Stabilized properties | | $ | 22,955 | | $ | 36,488 | | $ | 51,253 | | $ | 665,105 | | $ | 1,119,446 | | $ | 1,329,290 | | $ | 3,224,537 | Development properties | | | 21,606 | | | 114,401 | | | 22,498 | | | 39,194 | | | 123,669 | | | 28,520 | | | 349,888 | Total | | $ | 44,561 | | $ | 150,889 | | $ | 73,751 | | $ | 704,299 | | $ | 1,243,115 | | $ | 1,357,810 | | $ | 3,574,425 |
| | | | | | | | | | | | | | | | | | | | | | | | Year of Origination | | | | | | 2025 | | 2024 | | 2023 | | 2022 | | 2021 | | Prior to 2021 | | Total | Ground Lease receivables | | | | | | | | | | | | | | | | | | | | | | Stabilized properties | | $ | 38,076 | | $ | — | | $ | 19,950 | | $ | 158,930 | | $ | 204,531 | | $ | 655,451 | | $ | 1,076,938 | Development properties | | | 58,861 | | | 128,497 | | | 24,890 | | | 639,514 | | | 80,103 | | | — | | | 931,865 | Total | | $ | 96,937 | | $ | 128,497 | | $ | 44,840 | | $ | 798,444 | | $ | 284,634 | | $ | 655,451 | | $ | 2,008,803 |
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| Schedule of Future Minimum Lease Payments Under Sales-type Leases |
Future Minimum Lease Payments under Sales-type Leases—Future minimum lease payments to be collected under sales-type leases accounted for under ASC 842 - Leases, excluding lease payments that are not fixed and determinable, in effect as of September 30, 2026, are as follows by year ($ in thousands): | | | | | | | | | | | | | | | | | | | | | Fixed Bumps | | | | | | Fixed Bumps | | | | | with | | | | | | with Inflation | | Fixed | | Percentage | | | | | | Adjustments | | Bumps | | Rent | | Total | 2026 (remaining three months) | | $ | 29,618 | | $ | 2,306 | | $ | 424 | | $ | 32,348 | 2027 | | | 121,024 | | | 9,320 | | | 1,695 | | | 132,039 | 2028 | | | 123,836 | | | 9,595 | | | 1,746 | | | 135,177 | 2029 | | | 125,647 | | | 9,785 | | | 1,753 | | | 137,185 | 2030 | | | 128,961 | | | 11,005 | | | 1,753 | | | 141,719 | Thereafter | | | 31,994,215 | | | 3,513,757 | | | 284,160 | | | 35,792,132 | Total undiscounted cash flows | | $ | 32,523,301 | | $ | 3,555,768 | | $ | 291,531 | | $ | 36,370,600 |
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| Schedule of Recognized Interest Income from Sales type Leases |
During the three and nine months ended September 30, 2026 and 2025, the Company recognized interest income from sales-type leases in its consolidated statements of operations as follows ($ in thousands): | | | | | | | | | | | | Net Investment | | Ground | | | | | | in Sales-type | | Lease | | | | Three Months Ended September 30, 2026 | | Leases | | Receivables | | Total | Cash | | $ | 31,509 | | $ | 19,910 | | $ | 51,419 | Non-cash | | | 17,180 | | | 10,168 | | | 27,348 | Total interest income from sales-type leases | | $ | 48,689 | | $ | 30,078 | | $ | 78,767 |
| | | | | | | | | | | | Net Investment | | Ground | | | | | | in Sales-type | | Lease | | | | Three Months Ended September 30, 2025 | | Leases | | Receivables | | Total | Cash | | $ | 29,000 | | $ | 17,592 | | $ | 46,592 | Non-cash | | | 16,655 | | | 9,182 | | | 25,837 | Total interest income from sales-type leases | | $ | 45,655 | | $ | 26,774 | | $ | 72,429 |
| | | | | | | | | | | | Net Investment | | Ground | | | | | | in Sales-type | | Lease | | | | Nine Months Ended September 30, 2026 | | Leases | | Receivables | | Total | Cash | | $ | 91,740 | | $ | 57,914 | | $ | 149,654 | Non-cash | | | 51,276 | | | 29,773 | | | 81,049 | Total interest income from sales-type leases | | $ | 143,016 | | $ | 87,687 | | $ | 230,703 |
| | | | | | | | | | | | Net Investment | | Ground | | | | | | in Sales-type | | Lease | | | | Nine Months Ended September 30, 2025 | | Leases | | Receivables | | Total | Cash | | $ | 86,627 | | $ | 50,765 | | $ | 137,392 | Non-cash | | | 48,697 | | | 26,646 | | | 75,343 | Total interest income from sales-type leases | | $ | 135,324 | | $ | 77,411 | | $ | 212,735 |
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