XML 27 R12.htm IDEA: XBRL DOCUMENT v3.24.1.1.u2
Leases
 3 Months Ended
Mar. 31, 2024
Leases [Abstract]  
Lessor, Operating Leases [Text Block]
4. Leases
Lessor
The following table summarizes the components of lease revenue recognized under the Company’s operating and sales-type leases for the three months ended March 31, 2024 and 2023 and included within the Company's Consolidated Statements of Operations (in thousands):
Three months ended March 31,
Lease Revenue20242023
Fixed contractual payments$648,890 $621,646 
Variable lease payments139,458 135,003 
Sales-type lease revenue242 226 
$788,590 $756,875 
Lessee, Operating Leases
Lessee
On March 28, 2024, the Company entered into a 90-year air rights lease with the Massachusetts Department of Transportation for an approximately 61,000 square feet site at the parking garage located at 100 Clarendon Street and the concourse level of the Massachusetts Bay Transportation Authority’s Back Bay Station (the “Station”). The lease requires annual base rental payments of $250,000 until the commencement of construction, as defined in the lease. If the Company commences construction of a project on the site on or before August 1, 2028, then a final fixed rental payment is due in accordance with the lease at that time. After August 1, 2028, if the Company commences construction of a project on the site, then a final rental payment based on the then current fair market value will be due at that time. In addition, the lease requires annual payments of $500,000 through 2033 to fund maintenance and improvements to the Station. The Company has assumed that it will begin construction on the site on or before August 1, 2028. The incremental borrowing rate for this lease is 6.57% per annum. The net present value of the ground lease payments is approximately $23.2 million. The Company classifies this lease as an operating lease. As a result, the Company recorded a Right of Use Assets – Operating Leases and Lease Liabilities – Operating Leases of approximately $23.9 million and $23.2 million, respectively, on its Consolidated Balance Sheets as of March 31, 2024. There were no lease costs for the period from March 28, 2024 through March 31, 2024.
The following table provides a maturity analysis for the air rights operating lease as of March 28,
2024 (in thousands):
Operating
Period from March 28, 2024 through December 31, 2024$— 
2025750 
2026750 
2027750 
202825,826 
2029500 
Thereafter2,000 
Total lease payments30,576 
Less: Interest portion7,391 
Present value of lease payments$23,185