Leases

Capital Leases

The Company leases the land and building for one of its data centers from an entity in which a member of its Board of Directors has a beneficial ownership interest, under which the building portion of the lease has been capitalized. Pursuant to GAAP, the lease attributable to the land is accounted for as an operating lease. The lease expires in 2033 with two subsequent 10-year and one five-year renewal option periods.

As of December 31, 2017, minimum payment obligations for this capital lease are as follows:



	Related Party Building Lease⁽¹⁾ (in thousands)
2018	$	1,952
2019	2,064
2020	2,124
2021	2,243
2022	2,306
Thereafter	31,330
	42,019
Less: amount representing interest	(22,553		)
Present value of minimum capital lease payments	$	19,466

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(1)	Until 2023, capital lease payments are applied only to accrued interest, thus, there is no current portion.

In February 2016, a wholly-owned subsidiary of Switch, Ltd. acquired rights and interests to manage, construct and use the Nevada Broadband Telemedicine Initiative ("NBTI") fiber network. The right to use the NBTI fiber network is accounted for as a capital lease. As of December 31, 2017 and 2016, capital lease assets related to the NBTI fiber network were $16.1 million and $15.9 million, respectively, and related future minimum payment obligations are $2.3 million, which are expected to be paid during the year ending December 31, 2018. The capital lease will expire 25 years from the date the network is accepted by the Nevada Hospital Association, the entity that holds title to the network, and has a 25-year renewal option. Acceptance occurred in September 2017.

The Company is the sole consumer of output from four feeders related to a substation owned by NV Energy (Note 4). The Company accounts for this arrangement as a capital lease. As of December 31, 2017 and 2016, capital lease assets related to the feeders were $515,000 and $930,000, respectively. There are no future minimum payment obligations related to this capital lease. The capital lease will expire 39 years from the date the substation was placed into service, which was April 2016.

Operating Lease Commitments

The Company leases land, warehouse storage space and data center buildings under operating leases (including the land portion of the capitalized building lease) that have non-cancellable terms expiring through 2066 with entities in which a member of its Board of Directors has a beneficial ownership interest.

In addition, the Company leases warehouse storage space, storage yards for fiber and construction materials and equipment under operating leases in Nevada that have non-cancellable terms expiring through 2055.

As of December 31, 2017, future minimum lease payments for all operating leases with remaining terms in excess of one year are as follows:



	Related Parties		Other		Total
	(in thousands)
2018	$	4,706	$	2,358	$	7,064
2019	4,798		2,369		7,167
2020	4,860		2,372		7,232
2021	4,256		506		4,762
2022	2,863		179		3,042
Thereafter	56,653		643		57,296
	$	78,136	$	8,427	$	86,563

During the years ended December 31, 2017, 2016, and 2015, rent expense related to operating leases was approximately $7.4 million, $8.7 million, and $3.8 million, respectively. Related party rent included in these amounts was approximately $4.8 million, $4.2 million, and $3.8 million for the years ended December 31, 2017, 2016, and 2015, respectively.