Future Minimum Base Rents and Lease Payments (Tables)

12 Months Ended

Dec. 31, 2020

The following table summarizes the future minimum base rents (excluding tenant reimbursements for operating expenses and termination fees related to tenants exercising early termination options) for properties as of December 31, 2020:


Year Ended	Non-cancellable		Subject to Early Termination Options		Total(1)
2021	$	611,031	$	9,822	$	620,853
2022	557,761		22,448		580,209
2023	513,987		28,211		542,198
2024	453,059		20,792		473,851
2025	336,779		35,496		372,275
Thereafter	1,461,862		152,962		1,614,824
TOTAL	$	3,934,479	$	269,731	$	4,204,210

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1.Excludes rents under leases at the Company’s studio properties with terms of one year or less.

Ground Lease Terms for Properties Held

The following table summarizes the Company’s ground lease terms related to properties that are held subject to long-term non-cancellable ground lease obligations as of December 31, 2020:

Property

Expiration Date

Notes

3400 Hillview

10/31/2040

The ground rent is the greater of the minimum annual rent or percentage annual rent. The minimum annual rent until October 31, 2017 is the lesser of 10% of Fair Market Value (“FMV”) of the land or $1.0 million grown at 75% of the cumulative increases in consumer price index (“CPI”) from October 1989. Thereafter, minimum annual rent, which resets annually, is the lesser of 10% of FMV of the land or the minimum annual rent as calculated as of November 1, 2017 plus 75% of subsequent cumulative CPI changes. In no event can rent be less then the specific amount prescribed in the ground lease agreement. Percentage annual rent is gross income multiplied by 24.125%.

Clocktower Square

9/26/2056

The ground rent is minimum annual rent (adjusted every 10 years) plus 25% of adjusted gross income (“AGI”). Minimum rent adjustments adds 60% of the average annual participation rent payable over five years. Annual participation is the excess of 25% of AGI over the minimum annual rent for a given lease year.

Del Amo

6/30/2049

Rent under the ground sublease is $1.00 per year, with the sublessee being responsible for all impositions, insurance premiums, operating charges, maintenance charges, construction costs and other charges, costs and expenses that arise or may be contemplated under any provisions of the ground sublease.

Ferry Building

Various

The land on which the building is situated is subject to a ground lease agreement that expires on April 1, 2067. The minimum annual rent (adjusted every 5 years) is the prior year’s minimum annual rent plus cumulative increase in CPI with a floor of 10% and a cap of 20%.

Additionally, the parking lot is subject to a separate ground lease agreement that expires on April 1, 2023. The minimum annual rent adjusts each year for changes in CPI with a floor of 2% and a cap of 4%. The parking lot is subject to automatic renewals for 10-year periods at market.

Foothill Research Center

6/30/2039

The ground rent is the greater of the minimum annual rent or percentage annual rent. The minimum annual rent, which resets annually, is the lesser of 10% of FMV of the land or the previous year’s minimum annual rent plus 75% of CPI increase. In no event rent can be less then the specific amount prescribed in the ground lease agreement. Percentage annual rent is gross income multiplied by 24.125%.

3176 Porter

7/31/2040

The ground rent is the greater of the minimum annual rent or percentage annual rent. The minimum annual rent, which resets annually, is the lesser of 10% of FMV of the land or the previous year’s minimum annual rent plus 75% of CPI increase. Percentage annual rent is Lockheed’s base rent multiplied by 24.125%. In no event rent can be less then the specific amount prescribed in the ground lease agreement.

Metro Center

4/29/2054

Every 10 years rent adjusts to 7.233% of FMV of the land (since 2008) and adjusts to reflect the change in CPI from the preceding FMV adjustment date (since 2013). The CPI adjustment has a floor of the previous minimum rent. The Company has an option to extend the ground lease for four additional periods of 11 years each.

Page Mill Center

11/30/2041

The ground rent is minimum annual rent (adjusted on January 1, 2019 and January 1, 2029) plus 25% of AGI, less minimum annual rent. Minimum rent adjustments adds 60% of the average annual participation rent payable over five years. Annual participation is the excess of 25% of AGI over the minimum annual rent for a given lease year.

Property

Expiration Date

Notes

Page Mill Hill

11/17/2049

The ground rent is minimum annual rent (adjusted every 10 years) plus 60% of the average of the percentage annual rent for the previous 7 lease years. Minimum rent adjustments add 60% of the average annual percentage rent for the previous 7 years.

Palo Alto Square

11/30/2045

The ground rent is minimum annual rent (adjusted every 10 years starting January 1, 2022) plus 25% of AGI less minimum annual rent. The minimum annual rent adjustments add 50% of the average annual percentage rent from the previous 5 years.

Sunset Gower Studios

3/31/2060

Every 7 years rent adjusts to 7.5% of FMV of the land.

Techmart

5/31/2053

Rent subject to a 10% increase every 5 years. The Company has an option to extend the ground lease for two additional periods of 10 years each.

Rental Expense

The following table summarizes rental expense for ground leases and a corporate office lease:


	For the Year Ended December 31,
	2020		2019		2018
Contingent rental expense	$	8,944	$	9,193	$	10,740
Minimum rental expense	$	19,964	$	19,900	$	15,906

Future Minimum Lease Payments Due

The following table provides information regarding the Company’s future minimum lease payments for its ground leases (before the impact of extension options, if applicable) as of December 31, 2020:


For the Year Ended December 31,	Ground Leases(1)
2021	$	18,622
2022	18,663
2023	18,438
2024	18,392
2025	18,392
Thereafter	515,961
Total ground lease payments	608,468
Less: interest portion	(338,454)
Present value of lease liability	$	270,014

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1.In situations where ground lease obligation adjustments are based on third-party appraisals of fair market land value, CPI adjustments and/or percentage of gross income that exceeds the minimum annual rent, the future minimum lease amounts above include the lease rental obligations in effect as of December 31, 2020.