Land Rights

Land rights, net represent the Company's rights to land subject to long-term ground leases. The Company obtained ground lease rights through the acquisition of several of its rental properties and immediately subleased the land to its tenants. These land rights represent the below market value of the related ground leases. The Company assessed the acquired ground leases to determine if the lease terms were favorable or unfavorable, given market conditions at the acquisition date. Because the market rents to be received under the Company's triple-net tenant leases were greater than the rents to be paid under the acquired ground leases, the Company concluded that the ground leases were below market and were therefore required to be recorded as a definite lived asset (land rights) on its books.

The land rights are amortized over the individual lease term of each ground lease, including all renewal options, which ranged from 25 years to 92 years at their respective acquisition dates. Land rights net, consists of the following:



	September 30, 2018			December 31, 2017
	(in thousands)
Land rights	$	656,666		$	656,666
Less accumulated amortization	(24,700		)	(16,518		)
Land rights, net	$	631,966		$	640,148

Amortization expense related to the ground leases is recorded within land rights and ground lease expense in the condensed consolidated statements of income and totaled $2.7 million and $8.2 million for the three and nine months ended September 30, 2018, respectively. Amortization expense related to the ground leases totaled $2.7 million and $7.6 million for the three and nine months ended September 30, 2017, respectively.

As of September 30, 2018, estimated future amortization expense related to the Company’s ground leases by fiscal year is as follows (in thousands):



Year ending December 31,
2018	$	2,728
2019	10,910
2020	10,910
2021	10,910
2022	10,910
Thereafter	585,598
Total	$	631,966