XML 44 R20.htm IDEA: XBRL DOCUMENT v3.20.4
Leases
 12 Months Ended
Dec. 31, 2020
Leases [Abstract]  
Leases Leases
Lessor
The Company is the lessor for its 3,831 retail, restaurant, office and industrial properties. The Company’s operating and direct financing leases have non-cancelable lease terms of 0.01 years to 24.1 years. Certain leases with tenants include options to extend or terminate the lease agreements or to purchase the underlying asset. Lease agreements may also contain rent increases that are based on an index or rate (e.g., the consumer price index (“CPI”) or LIBOR). The Company believes the residual value risk is not a primary risk because of the long-lived nature of the assets.
The components of rental revenue from the Company’s operating and direct financing leases were as follows (in thousands):
Year Ended December 31,
202020192018
Fixed:
Cash rent (1)
$1,036,422 $1,102,538 $1,121,482 
Straight-line rent (2)
25,161 28,032 39,772 
Lease intangible amortization
(3,357)(2,538)(4,178)
Property operating cost reimbursements
5,866 5,559 5,375 
Sub-lease (3)
20,141 21,496 16,178 
Total fixed
1,084,233 1,155,087 1,178,629 
Variable (4)
73,404 81,310 78,179 
Income from direct financing leases
648 837 1,059 
Total rental revenue
$1,158,285 $1,237,234 $1,257,867 
____________________________________
(1)For the year ended December 31, 2020, the Company had $17.9 million of rental revenue related to deferral agreements executed through February 16, 2021, which qualify for the COVID-19 Lease Concessions Relief. For the year ended December 31, 2020, cash rent was negatively impacted by (i) $18.3 million of abated rental revenue pursuant to lease amendments executed through December 31, 2020, which increased the weighted average lease term for the related properties and (ii) a reduction to rental revenue of $23.0 million that was related to the impact of the COVID-19 pandemic, of which $9.6 million represented an increase to the general allowance for rental revenue and $13.4 million represented amounts not probable of collection at December 31, 2020 and rental revenue will be recognized as cash is received.
(2)For the year ended December 31, 2020, straight-line rent was reduced by $3.5 million that was related to the impact of the COVID-19 pandemic, for straight-line rent receivables that were deemed not probable of collection.
(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.
The following table presents future minimum operating lease payments due to the Company over the next five years and thereafter as of December 31, 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)
2021$1,043,236 $2,000 
2022992,411 1,925 
2023927,738 1,565 
2024856,646 510 
2025752,049 169 
Thereafter4,728,485 655 
Total$9,300,565 $6,824 
____________________________________
(1)Related to 18 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.
Lessee
The Company is the lessee under ground lease arrangements and corporate office leases. All leases for which the Company is the lessee meet the criteria of an operating lease. The Company’s leases have remaining lease terms of 0.2 years to 78.6 years, some of which include options to extend. The weighted average remaining lease term for the Company’s operating leases was 15.9 years as of December 31, 2020. Under certain ground lease arrangements, the Company pays variable costs, including property operating expenses and common area maintenance, which are generally reimbursed by the ground lease sub-tenants. The weighted average discount rate for the Company’s operating leases was 4.91% as of December 31, 2020. As the Company’s leases do not provide an implicit rate, the Company used an estimated incremental borrowing rate based on the information available at the adoption date in determining the present value of lease payments.
The Company incorporated renewal periods in the calculation of the majority of ground lease right-of-use assets and lease liabilities. Pursuant to certain leases, the Company is required to execute renewal options available under the ground lease through the building lease term. No renewals were incorporated in the calculation of the corporate lease right-of-use assets and liabilities, as it is not reasonably certain that the Company will exercise the options. The Company’s lease agreements do not contain any material residual value guarantees or material restrictive covenants.
The following table presents the lease expense components for the years ended December 31, 2020 and 2019 (in thousands):
Year Ended December 31,
20202019
Operating lease cost (1)
$24,259 $24,392 
Sublease income (2)
$(20,141)$(21,496)
___________________________________
(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.
Subsequent to initial measurement of $233.3 million and $236.3 million, respectively, the Company reduced the right-of-use assets by $2.1 million and operating lease liabilities by $2.6 million, for non-cash activity related to dispositions and lease modifications during the year ended December 31, 2019. During the year ended December 31, 2020, the Company reduced the right-of-use assets and operating lease liabilities by $1.2 million and $1.3 million, respectively.
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 December 31, 2020 (in thousands).
Future Minimum Lease Payments
2021$22,420 
202221,709 
202321,300 
202420,656 
202520,213 
Thereafter206,752 
Total313,050 
Less: imputed interest103,946 
Total$209,104 

The following table reflects the future minimum lease payments due from the Company over the five years subsequent to December 31, 2019 (in thousands).
Future Minimum Lease Payments
2020$22,287 
202122,284 
202222,122 
202321,695 
202421,132 
Thereafter225,457 
Total$334,977 
Less: imputed interest113,916 
Total$221,061 
Leases Leases
Lessor
The Company is the lessor for its 3,831 retail, restaurant, office and industrial properties. The Company’s operating and direct financing leases have non-cancelable lease terms of 0.01 years to 24.1 years. Certain leases with tenants include options to extend or terminate the lease agreements or to purchase the underlying asset. Lease agreements may also contain rent increases that are based on an index or rate (e.g., the consumer price index (“CPI”) or LIBOR). The Company believes the residual value risk is not a primary risk because of the long-lived nature of the assets.
The components of rental revenue from the Company’s operating and direct financing leases were as follows (in thousands):
Year Ended December 31,
202020192018
Fixed:
Cash rent (1)
$1,036,422 $1,102,538 $1,121,482 
Straight-line rent (2)
25,161 28,032 39,772 
Lease intangible amortization
(3,357)(2,538)(4,178)
Property operating cost reimbursements
5,866 5,559 5,375 
Sub-lease (3)
20,141 21,496 16,178 
Total fixed
1,084,233 1,155,087 1,178,629 
Variable (4)
73,404 81,310 78,179 
Income from direct financing leases
648 837 1,059 
Total rental revenue
$1,158,285 $1,237,234 $1,257,867 
____________________________________
(1)For the year ended December 31, 2020, the Company had $17.9 million of rental revenue related to deferral agreements executed through February 16, 2021, which qualify for the COVID-19 Lease Concessions Relief. For the year ended December 31, 2020, cash rent was negatively impacted by (i) $18.3 million of abated rental revenue pursuant to lease amendments executed through December 31, 2020, which increased the weighted average lease term for the related properties and (ii) a reduction to rental revenue of $23.0 million that was related to the impact of the COVID-19 pandemic, of which $9.6 million represented an increase to the general allowance for rental revenue and $13.4 million represented amounts not probable of collection at December 31, 2020 and rental revenue will be recognized as cash is received.
(2)For the year ended December 31, 2020, straight-line rent was reduced by $3.5 million that was related to the impact of the COVID-19 pandemic, for straight-line rent receivables that were deemed not probable of collection.
(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.
The following table presents future minimum operating lease payments due to the Company over the next five years and thereafter as of December 31, 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)
2021$1,043,236 $2,000 
2022992,411 1,925 
2023927,738 1,565 
2024856,646 510 
2025752,049 169 
Thereafter4,728,485 655 
Total$9,300,565 $6,824 
____________________________________
(1)Related to 18 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.
Lessee
The Company is the lessee under ground lease arrangements and corporate office leases. All leases for which the Company is the lessee meet the criteria of an operating lease. The Company’s leases have remaining lease terms of 0.2 years to 78.6 years, some of which include options to extend. The weighted average remaining lease term for the Company’s operating leases was 15.9 years as of December 31, 2020. Under certain ground lease arrangements, the Company pays variable costs, including property operating expenses and common area maintenance, which are generally reimbursed by the ground lease sub-tenants. The weighted average discount rate for the Company’s operating leases was 4.91% as of December 31, 2020. As the Company’s leases do not provide an implicit rate, the Company used an estimated incremental borrowing rate based on the information available at the adoption date in determining the present value of lease payments.
The Company incorporated renewal periods in the calculation of the majority of ground lease right-of-use assets and lease liabilities. Pursuant to certain leases, the Company is required to execute renewal options available under the ground lease through the building lease term. No renewals were incorporated in the calculation of the corporate lease right-of-use assets and liabilities, as it is not reasonably certain that the Company will exercise the options. The Company’s lease agreements do not contain any material residual value guarantees or material restrictive covenants.
The following table presents the lease expense components for the years ended December 31, 2020 and 2019 (in thousands):
Year Ended December 31,
20202019
Operating lease cost (1)
$24,259 $24,392 
Sublease income (2)
$(20,141)$(21,496)
___________________________________
(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.
Subsequent to initial measurement of $233.3 million and $236.3 million, respectively, the Company reduced the right-of-use assets by $2.1 million and operating lease liabilities by $2.6 million, for non-cash activity related to dispositions and lease modifications during the year ended December 31, 2019. During the year ended December 31, 2020, the Company reduced the right-of-use assets and operating lease liabilities by $1.2 million and $1.3 million, respectively.
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 December 31, 2020 (in thousands).
Future Minimum Lease Payments
2021$22,420 
202221,709 
202321,300 
202420,656 
202520,213 
Thereafter206,752 
Total313,050 
Less: imputed interest103,946 
Total$209,104 

The following table reflects the future minimum lease payments due from the Company over the five years subsequent to December 31, 2019 (in thousands).
Future Minimum Lease Payments
2020$22,287 
202122,284 
202222,122 
202321,695 
202421,132 
Thereafter225,457 
Total$334,977 
Less: imputed interest113,916 
Total$221,061 
Leases Leases
Lessor
The Company is the lessor for its 3,831 retail, restaurant, office and industrial properties. The Company’s operating and direct financing leases have non-cancelable lease terms of 0.01 years to 24.1 years. Certain leases with tenants include options to extend or terminate the lease agreements or to purchase the underlying asset. Lease agreements may also contain rent increases that are based on an index or rate (e.g., the consumer price index (“CPI”) or LIBOR). The Company believes the residual value risk is not a primary risk because of the long-lived nature of the assets.
The components of rental revenue from the Company’s operating and direct financing leases were as follows (in thousands):
Year Ended December 31,
202020192018
Fixed:
Cash rent (1)
$1,036,422 $1,102,538 $1,121,482 
Straight-line rent (2)
25,161 28,032 39,772 
Lease intangible amortization
(3,357)(2,538)(4,178)
Property operating cost reimbursements
5,866 5,559 5,375 
Sub-lease (3)
20,141 21,496 16,178 
Total fixed
1,084,233 1,155,087 1,178,629 
Variable (4)
73,404 81,310 78,179 
Income from direct financing leases
648 837 1,059 
Total rental revenue
$1,158,285 $1,237,234 $1,257,867 
____________________________________
(1)For the year ended December 31, 2020, the Company had $17.9 million of rental revenue related to deferral agreements executed through February 16, 2021, which qualify for the COVID-19 Lease Concessions Relief. For the year ended December 31, 2020, cash rent was negatively impacted by (i) $18.3 million of abated rental revenue pursuant to lease amendments executed through December 31, 2020, which increased the weighted average lease term for the related properties and (ii) a reduction to rental revenue of $23.0 million that was related to the impact of the COVID-19 pandemic, of which $9.6 million represented an increase to the general allowance for rental revenue and $13.4 million represented amounts not probable of collection at December 31, 2020 and rental revenue will be recognized as cash is received.
(2)For the year ended December 31, 2020, straight-line rent was reduced by $3.5 million that was related to the impact of the COVID-19 pandemic, for straight-line rent receivables that were deemed not probable of collection.
(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.
The following table presents future minimum operating lease payments due to the Company over the next five years and thereafter as of December 31, 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)
2021$1,043,236 $2,000 
2022992,411 1,925 
2023927,738 1,565 
2024856,646 510 
2025752,049 169 
Thereafter4,728,485 655 
Total$9,300,565 $6,824 
____________________________________
(1)Related to 18 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.
Lessee
The Company is the lessee under ground lease arrangements and corporate office leases. All leases for which the Company is the lessee meet the criteria of an operating lease. The Company’s leases have remaining lease terms of 0.2 years to 78.6 years, some of which include options to extend. The weighted average remaining lease term for the Company’s operating leases was 15.9 years as of December 31, 2020. Under certain ground lease arrangements, the Company pays variable costs, including property operating expenses and common area maintenance, which are generally reimbursed by the ground lease sub-tenants. The weighted average discount rate for the Company’s operating leases was 4.91% as of December 31, 2020. As the Company’s leases do not provide an implicit rate, the Company used an estimated incremental borrowing rate based on the information available at the adoption date in determining the present value of lease payments.
The Company incorporated renewal periods in the calculation of the majority of ground lease right-of-use assets and lease liabilities. Pursuant to certain leases, the Company is required to execute renewal options available under the ground lease through the building lease term. No renewals were incorporated in the calculation of the corporate lease right-of-use assets and liabilities, as it is not reasonably certain that the Company will exercise the options. The Company’s lease agreements do not contain any material residual value guarantees or material restrictive covenants.
The following table presents the lease expense components for the years ended December 31, 2020 and 2019 (in thousands):
Year Ended December 31,
20202019
Operating lease cost (1)
$24,259 $24,392 
Sublease income (2)
$(20,141)$(21,496)
___________________________________
(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.
Subsequent to initial measurement of $233.3 million and $236.3 million, respectively, the Company reduced the right-of-use assets by $2.1 million and operating lease liabilities by $2.6 million, for non-cash activity related to dispositions and lease modifications during the year ended December 31, 2019. During the year ended December 31, 2020, the Company reduced the right-of-use assets and operating lease liabilities by $1.2 million and $1.3 million, respectively.
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 December 31, 2020 (in thousands).
Future Minimum Lease Payments
2021$22,420 
202221,709 
202321,300 
202420,656 
202520,213 
Thereafter206,752 
Total313,050 
Less: imputed interest103,946 
Total$209,104 

The following table reflects the future minimum lease payments due from the Company over the five years subsequent to December 31, 2019 (in thousands).
Future Minimum Lease Payments
2020$22,287 
202122,284 
202222,122 
202321,695 
202421,132 
Thereafter225,457 
Total$334,977 
Less: imputed interest113,916 
Total$221,061