Leases

12 Months Ended

Dec. 31, 2019

Leases [Abstract]

Leases

LEASES

At December 31, 2019, the Company had five properties subject to operating ground leases with a weighted average remaining term of 72 years and two finance ground leases with a weighted average remaining term of four years. At December 31, 2019, the Company had right-of-use assets from operating ground leases of $57.3 million included in operating properties, projects under development, or land on the consolidated balance sheet and right-of-use assets from finance ground leases of $11.9 million included in land on the consolidated balance sheet. At December 31, 2019, the Company had lease liabilities for operating and finance ground leases of $59.4 million and $9.7 million, respectively, included in other liabilities on the consolidated balance sheet. The weighted average discount rate on these ground leases at December 31, 2019 was 4.5%.

Rental payments on these ground leases are adjusted periodically based on either the Consumer Price Index, changes in developed square feet on the underlying leased asset, or on a pre-determined schedule. The monthly payments on a pre-determined schedule are recognized on a straight-line basis over the terms of the respective leases while payments resulting from changes in the Consumer Price Index or future development are reflected in the statement of operations at the time of the change.

For the years ended December 31, 2019, 2018, and 2017, the Company recognized operating ground lease expense of $3.9 million, $3.5 million, and $3.2 million, respectively. For the year ended December 31, 2019 the Company had no variable lease expenses related to ground lease expense, and recognized interest expense related to finance ground leases of $462,000. For the year ended December 31, 2019, the Company paid $2.6 million in cash related to operating ground leases and made $462,000 in cash payments related to financing ground leases.

The following table represents the undiscounted cash flows of our scheduled obligations for future minimum payments for ground leases as of December 31, 2019, with a reconciliation of these cash flows to the related ground lease liabilities in accordance with ASC 842 (in thousands):

	Operating Ground Leases			Finance Ground Leases
2020	$	3,175		$	462
2021	2,959			6,562
2022	2,672			162
2023	2,614			162
2024	2,497			162
Thereafter	200,107			3,676
	$	214,024		$	11,186
Discount	(154,645		)	(1,456		)
Lease liability	$	59,379		$	9,730

The following table represents undiscounted cash flows of our scheduled obligations for future minimum payments on ground leases as of December 31, 2018, in accordance with ASC 840 (in thousands):

	Operating Ground Leases		Finance Ground Leases
2019	$	2,441	$	462
2020	2,460		462
2021	2,497		6,562
2022	2,497		162
2023	2,497		162
Thereafter	202,603		3,838
	$	214,995	$	11,648

Leases

LEASES

At December 31, 2019, the Company had five properties subject to operating ground leases with a weighted average remaining term of 72 years and two finance ground leases with a weighted average remaining term of four years. At December 31, 2019, the Company had right-of-use assets from operating ground leases of $57.3 million included in operating properties, projects under development, or land on the consolidated balance sheet and right-of-use assets from finance ground leases of $11.9 million included in land on the consolidated balance sheet. At December 31, 2019, the Company had lease liabilities for operating and finance ground leases of $59.4 million and $9.7 million, respectively, included in other liabilities on the consolidated balance sheet. The weighted average discount rate on these ground leases at December 31, 2019 was 4.5%.

Rental payments on these ground leases are adjusted periodically based on either the Consumer Price Index, changes in developed square feet on the underlying leased asset, or on a pre-determined schedule. The monthly payments on a pre-determined schedule are recognized on a straight-line basis over the terms of the respective leases while payments resulting from changes in the Consumer Price Index or future development are reflected in the statement of operations at the time of the change.

For the years ended December 31, 2019, 2018, and 2017, the Company recognized operating ground lease expense of $3.9 million, $3.5 million, and $3.2 million, respectively. For the year ended December 31, 2019 the Company had no variable lease expenses related to ground lease expense, and recognized interest expense related to finance ground leases of $462,000. For the year ended December 31, 2019, the Company paid $2.6 million in cash related to operating ground leases and made $462,000 in cash payments related to financing ground leases.

The following table represents the undiscounted cash flows of our scheduled obligations for future minimum payments for ground leases as of December 31, 2019, with a reconciliation of these cash flows to the related ground lease liabilities in accordance with ASC 842 (in thousands):

	Operating Ground Leases			Finance Ground Leases
2020	$	3,175		$	462
2021	2,959			6,562
2022	2,672			162
2023	2,614			162
2024	2,497			162
Thereafter	200,107			3,676
	$	214,024		$	11,186
Discount	(154,645		)	(1,456		)
Lease liability	$	59,379		$	9,730

The following table represents undiscounted cash flows of our scheduled obligations for future minimum payments on ground leases as of December 31, 2018, in accordance with ASC 840 (in thousands):

	Operating Ground Leases		Finance Ground Leases
2019	$	2,441	$	462
2020	2,460		462
2021	2,497		6,562
2022	2,497		162
2023	2,497		162
Thereafter	202,603		3,838
	$	214,995	$	11,648