OPERATING LAND LEASES

12 Months Ended

Dec. 31, 2023

OPERATING LAND LEASES

OPERATING LAND LEASES

NOTE 9. OPERATING LAND LEASES

The Company is the lessee under operating land leases for certain of its properties. FASB ASC Topic 842, Leases, requires a lessee to recognize right-of-use assets and lease liabilities that arise from leases, whether qualifying as an operating or finance lease. As of December 31, 2023, the Company’s right-of-use assets totaled $1.4 million and the corresponding lease liabilities totaled $1.5 million, which balances are reflected within other assets and accounts payable, accrued expenses, and other liabilities, respectively, on the consolidated balance sheets. The right-of-use assets and lease liabilities are measured based on the present value of the lease payments utilizing discount rates estimated to be equal to that which the Company would pay to borrow on a collateralized basis over a similar term, for an amount equal to the lease payments, in a similar economic environment.

The Company’s operating land leases do not include variable lease payments and generally provide renewal options, at the Company’s election, to extend the terms of the respective leases. Renewal option periods are included in the calculation of the right-of-use assets and corresponding lease liabilities when it is reasonably certain that the Company, as lessee, will exercise the option to extend the lease.

Amortization of right-of-use assets for operating land leases is recognized on a straight-line basis over the term of the lease and is included within real estate expenses in the consolidated statements of operations. Amortization totaled $0.3 million and $0.1 million during the years ended December 31, 2023 and 2022, respectively, with no such expense recognized during the year ended December 31, 2021.

The following table reflects a summary of operating land leases, under which the Company is the lessee, for the years ended December 31, 2023, 2022, and 2021 (in thousands):

	Year Ended
	December 31, 2023		December 31, 2022		December 31, 2021
Operating Cash Outflows	$	257	$	197	$	—
Weighted Average Remaining Lease Term		7.1		7.9		—
Weighted Average Discount Rate		2.0		2.0		—

Minimum future lease payments under non-cancelable operating land leases, having remaining terms in excess of one year subsequent to December 31, 2023, are summarized as follows (in thousands):

Year Ending December 31,
2024	$	251
2025		192
2026		202
2027		202
2028		202
2029 and Thereafter		490
Total Lease Payments	$	1,539
Imputed Interest		(85)
Operating Leases – Liability	$	1,454