Leases (Tables)

6 Months Ended

Jun. 30, 2020

The components of rental revenue from the Company’s operating and direct financing leases were as follows (in thousands):



	Three Months Ended June 30,						Six Months Ended June 30,
	2020			2019			2020			2019
Fixed:
Cash rent⁽¹⁾	$	253,117		$	277,324		$	522,702		$	559,899
Straight-line rent⁽²⁾	3,404			8,043			5,458			15,455
Lease intangible amortization	(788		)	(611		)	(1,536		)	(1,342		)
Property operating cost reimbursements	1,363			1,422			2,791			2,886
Sub-lease ⁽³⁾	5,279			5,282			10,543			10,771
Total fixed	262,375			291,460			539,958			587,669

Variable ⁽⁴⁾	16,039			20,372			36,852			40,789
Income from direct financing leases	162			211			352			428
Total rental revenue	$	278,576		$	312,043		$	577,162		$	628,886

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(1)

For the three months ended June 30, 2020, includes rental revenue that represents deferred rent of $3.6 million related to deferral agreements executed through June 30, 2020, and $5.3 million related to deferral agreements executed from July 1, 2020 through July 27, 2020, which qualify for the COVID-19 Lease Concessions Relief. For the three months ended June 30, 2020, cash rent was negatively impacted by (i) $11.2 million of abated rental revenue pursuant to lease amendments executed through June 30, 2020, which increased the weighted average lease term for the related properties and (ii) a reduction to rental revenue of $4.7 million that was related to the impact of the COVID-19 pandemic, of which $0.9 million represented an increase to the general allowance for rental revenue that the Company believes it may abate as a result of lease amendments and $3.8 million represented amounts not probable of collection at June 30, 2020 and rental revenue will be recognized as cash is received.


(2)	For the three months ended June 30, 2020, was negatively impacted by a reduction to rental revenue that was related to the impact of the COVID-19 pandemic of $3.7 million of straight-line rent receivables.


(3)	The Company’s tenants are generally sub-tenants under certain ground leases and are responsible for paying the rent under these leases.

(4)

Includes costs reimbursed related to property operating expenses, common area maintenance and percentage rent, including these costs reimbursed by ground lease sub-tenants.

Lessor, Operating Lease Payments Receivable

The following table presents future minimum operating lease payments due to the Company over the next five years and thereafter as of June 30, 2020 (in thousands). These amounts exclude contingent rent payments, as applicable, that may be collected from certain tenants based on provisions related to sales thresholds and increases in annual rent based on exceeding certain economic indexes.



	Future Minimum Operating Lease Payments		Future Minimum Direct Financing Lease Payments ⁽¹⁾
July 1, 2020 - December 31, 2020	$	509,142	$	1,068
2021	1,046,102		2,014
2022	984,711		1,925
2023	920,421		1,565
2024	848,833		510
2025	743,217		169
Thereafter	4,556,368		655
Total	$	9,608,794	$	7,906

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(1)

Related to 19 properties which are subject to direct financing leases and, therefore, revenue is recognized as rental income on the discounted cash flows of the lease payments. Amounts reflect undiscounted cash flows to be received by the Company under the lease agreements on these respective properties.

Lessor, Direct Financing Leases Maturities



	Future Minimum Operating Lease Payments		Future Minimum Direct Financing Lease Payments ⁽¹⁾
July 1, 2020 - December 31, 2020	$	509,142	$	1,068
2021	1,046,102		2,014
2022	984,711		1,925
2023	920,421		1,565
2024	848,833		510
2025	743,217		169
Thereafter	4,556,368		655
Total	$	9,608,794	$	7,906

____________________________________

(1)

Lease Cost

The following table presents the lease expense components for the three and six months ended June 30, 2020 and 2019 (in thousands):



	Three Months Ended June 30,						Six Months Ended June 30,
	2020			2019			2020			2019
Operating lease cost ⁽¹⁾	$	6,135		$	5,418		$	13,710		$	12,396
Sublease income ⁽²⁾	$	(5,279	)	$	(5,282	)	$	(10,543	)	$	(10,771	)

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(1)	No cash paid for operating lease liabilities was capitalized.

(2)

The Company’s tenants are generally sub-tenants under certain ground leases and are responsible for paying the rent under these leases.

Lessee, Operating Lease Maturities

The following table reflects the future minimum lease payments due from the Company over the next five years and thereafter for ground lease obligations, which are substantially reimbursable by our tenants, and office lease obligations as of June 30, 2020 (in thousands).



	Future Minimum Lease Payments
July 1, 2020 - December 31, 2020	$	10,751
2021	22,092
2022	21,936
2023	21,590
2024	21,048
2025	20,569
Thereafter	206,547
Total	324,533
Less: imputed interest	109,211
Total	$	215,322