Leases |
12 Months Ended | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
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Dec. 31, 2022 | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
| Leases [Abstract] | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
| Leases | Leases As Lessor Our properties are leased to single tenants on a long-term, triple-net basis, which obligates the tenant to be responsible for the ongoing expenses of a property, in addition to its rent obligations. Our tenants operate in the fast-growing cannabis industry. All of our leases generally contain annual increases in rent (typically between 2% and 3%) over the expiring rental rate at the time of expiration. Certain of our leases also contain a Tenant Improvement Allowance (“TIA”). TIA is generally available to be funded between 12 and 18 months. In some leases, the tenant becomes liable to pay rent as if the full TIA has been funded, even if there are still unfunded commitments. TIA also contains annual increases which generally increase at the same rate as base rent, per the lease agreement. Certain of our leases provide the lessee with a right of first refusal or right of first offer in the event we market the leased property for sale. Two of the Company’s leases that were entered into in December 2020 provide the lessee with a purchase option to purchase the leased property at the end of the initial lease term in December 2029, subject to the satisfaction of certain conditions. The purchase option provision allows the lessee to purchase the leased property for an amount based on the fair market value of our investment. As of December 31, 2022, our gross investment in these two properties was approximately $6.3 million. As Lessee As of December 31, 2022 the Company was the lessee under one office lease that qualifies under the right-of-use ("ROU") model. The Company record a ROU asset of $273,048 which is classified in “” on our consolidated balance sheet through a ROU model, in which we record a ROU asset and a lease liability. The ROU asset is amortized over the remaining lease term. The amortization is made up of the principal amortization under the lease liability plus or minus the straight-line adjustment of the operating lease rent. The lease liability is included in “” our consolidated balance sheet. The following table presents the future contractual rent obligations as lessee as December 31, 2022 (in thousands):
As of December 31, 2022, the weighted-average discount rate used to calculate the lease liability was 5.65% and remaining lease term was 3.7 years, inclusive of purchase options expected to be exercised.
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| Leases | Leases As Lessor Our properties are leased to single tenants on a long-term, triple-net basis, which obligates the tenant to be responsible for the ongoing expenses of a property, in addition to its rent obligations. Our tenants operate in the fast-growing cannabis industry. All of our leases generally contain annual increases in rent (typically between 2% and 3%) over the expiring rental rate at the time of expiration. Certain of our leases also contain a Tenant Improvement Allowance (“TIA”). TIA is generally available to be funded between 12 and 18 months. In some leases, the tenant becomes liable to pay rent as if the full TIA has been funded, even if there are still unfunded commitments. TIA also contains annual increases which generally increase at the same rate as base rent, per the lease agreement. Certain of our leases provide the lessee with a right of first refusal or right of first offer in the event we market the leased property for sale. Two of the Company’s leases that were entered into in December 2020 provide the lessee with a purchase option to purchase the leased property at the end of the initial lease term in December 2029, subject to the satisfaction of certain conditions. The purchase option provision allows the lessee to purchase the leased property for an amount based on the fair market value of our investment. As of December 31, 2022, our gross investment in these two properties was approximately $6.3 million. As Lessee As of December 31, 2022 the Company was the lessee under one office lease that qualifies under the right-of-use ("ROU") model. The Company record a ROU asset of $273,048 which is classified in “” on our consolidated balance sheet through a ROU model, in which we record a ROU asset and a lease liability. The ROU asset is amortized over the remaining lease term. The amortization is made up of the principal amortization under the lease liability plus or minus the straight-line adjustment of the operating lease rent. The lease liability is included in “” our consolidated balance sheet. The following table presents the future contractual rent obligations as lessee as December 31, 2022 (in thousands):
As of December 31, 2022, the weighted-average discount rate used to calculate the lease liability was 5.65% and remaining lease term was 3.7 years, inclusive of purchase options expected to be exercised.
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