Leases

3 Months Ended

Mar. 31, 2019

Leases [Abstract]

Leases

LEASES

As discussed in Note 1, we adopted the new lease accounting standard effective January 1, 2019.

As Lessee

We have entered into ground leases for portions of the land at Springfield Town Center and at Plymouth Meeting Mall. We have also entered into an office lease for our headquarters location, as well as into vehicle and equipment leases as a lessee. The initial terms of these agreements generally range from three to 40 years, with certain agreements containing extension options for up to an additional 60 years. As of March 31, 2019, we included only those renewal options we were reasonably certain of exercising. Upon lease execution, the Company measures a liability for the present value of future lease payments over the noncancellable period of the lease and any renewal option period we are reasonably certain of exercising. Certain agreements require that we pay a portion of reimbursable expenses such as CAM, utilities, insurance and real estate taxes. These payments are not included in the calculation of the lease liability and are presented as variable lease costs.

We applied judgments related to the determination of the discount rates used to calculate the lease liability upon adoption at January 1, 2019. In order to calculate our incremental borrowing rate under ASC 842, we utilized judgments and estimates regarding our implied credit rating using market data and made other adjustments to determine an appropriate incremental borrowing rate as of January 1, 2019.

The following table presents additional information pertaining to the Company’s leases:

	Three Months Ended March 31, 2019
(in thousands of dollars)	Solar Panel Leases		Ground Leases		Office, equipment, and vehicle leases		Total
Finance lease cost:
Amortization of right-of-use assets	$	188	$	—	$	—	$	188
Interest on lease liabilities	76		—		—		76
Operating lease costs	—		439		542		981
Variable lease costs	—		41		45		86
Total lease costs	$	264	$	480	$	587	$	1,331

Other information related to leases as of and for the three months ended March 31, 2019 is as follows:

(in thousands of dollars)
Cash paid for the amounts included in the measurement of lease liabilities
Operating cash flows from finance leases	$	76
Operating cash flows from operating leases	$	593
Financing cash flows from finance leases	$	155
Weighted average remaining lease term-finance leases (months)	108
Weighted average remaining lease term-operating leases (months)	342
Weighted average discount rate-finance leases	4.41		%
Weighted average discount rate-operating leases	6.63		%

Future payments against lease liabilities as of March 31, 2019 are as follows:

(in thousands of dollars)	Finance leases			Operating leases			Total
April 1 to December 31, 2019	$	694		$	2,346		$	3,040
2020	925			1,979			2,904
2021	925			1,906			2,831
2022	925			1,625			2,550
2023	925			1,587			2,512
Thereafter	3,923			48,437			52,360
Total undiscounted lease payments	8,317			57,880			66,197
Less imputed interest	(1,462		)	(33,773		)	(35,235		)
Total lease liabilities	$	6,855		$	24,107		$	30,962

Future minimum lease payments under these agreements as of December 31, 2018 were as follows:

Year Ending December 31,	Finance leases		Operating leases		Total
2019	$	925	$	3,007	$	3,932
2020	925		1,845		2,770
2021	925		1,856		2,781
2022	925		1,673		2,598
2023	925		1,593		2,518
Thereafter	3,923		33,959		37,882
	$	8,548	$	43,933	$	52,481

As Lessor

As of March 31, 2019, the fixed contractual lease payments, including minimum rents and fixed CAM amounts, to be received over the next five years pursuant to the terms of noncancellable operating leases with initial terms greater than one year are included in the table below. The amounts presented assume that no leases are renewed and no renewal options are exercised. Additionally, the table does not include variable lease payments that may be received under certain leases for percentage rents or the reimbursement of operating costs, such as common area expenses, utilities, insurance and real estate taxes. These variable lease payments are recognized in the period when the applicable expenditures are incurred or in the case of percentage rents when the sales data is made available.

(in thousands of dollars)
April 1 to December 31, 2019	$	166,726
2020	207,390
2021	190,026
2022	170,143
2023	150,672
Thereafter	523,579
	$	1,408,536

Leases

LEASES

As discussed in Note 1, we adopted the new lease accounting standard effective January 1, 2019.

As Lessee

We have entered into ground leases for portions of the land at Springfield Town Center and at Plymouth Meeting Mall. We have also entered into an office lease for our headquarters location, as well as into vehicle and equipment leases as a lessee. The initial terms of these agreements generally range from three to 40 years, with certain agreements containing extension options for up to an additional 60 years. As of March 31, 2019, we included only those renewal options we were reasonably certain of exercising. Upon lease execution, the Company measures a liability for the present value of future lease payments over the noncancellable period of the lease and any renewal option period we are reasonably certain of exercising. Certain agreements require that we pay a portion of reimbursable expenses such as CAM, utilities, insurance and real estate taxes. These payments are not included in the calculation of the lease liability and are presented as variable lease costs.

We applied judgments related to the determination of the discount rates used to calculate the lease liability upon adoption at January 1, 2019. In order to calculate our incremental borrowing rate under ASC 842, we utilized judgments and estimates regarding our implied credit rating using market data and made other adjustments to determine an appropriate incremental borrowing rate as of January 1, 2019.

The following table presents additional information pertaining to the Company’s leases:

	Three Months Ended March 31, 2019
(in thousands of dollars)	Solar Panel Leases		Ground Leases		Office, equipment, and vehicle leases		Total
Finance lease cost:
Amortization of right-of-use assets	$	188	$	—	$	—	$	188
Interest on lease liabilities	76		—		—		76
Operating lease costs	—		439		542		981
Variable lease costs	—		41		45		86
Total lease costs	$	264	$	480	$	587	$	1,331

Other information related to leases as of and for the three months ended March 31, 2019 is as follows:

(in thousands of dollars)
Cash paid for the amounts included in the measurement of lease liabilities
Operating cash flows from finance leases	$	76
Operating cash flows from operating leases	$	593
Financing cash flows from finance leases	$	155
Weighted average remaining lease term-finance leases (months)	108
Weighted average remaining lease term-operating leases (months)	342
Weighted average discount rate-finance leases	4.41		%
Weighted average discount rate-operating leases	6.63		%

Future payments against lease liabilities as of March 31, 2019 are as follows:

(in thousands of dollars)	Finance leases			Operating leases			Total
April 1 to December 31, 2019	$	694		$	2,346		$	3,040
2020	925			1,979			2,904
2021	925			1,906			2,831
2022	925			1,625			2,550
2023	925			1,587			2,512
Thereafter	3,923			48,437			52,360
Total undiscounted lease payments	8,317			57,880			66,197
Less imputed interest	(1,462		)	(33,773		)	(35,235		)
Total lease liabilities	$	6,855		$	24,107		$	30,962

Future minimum lease payments under these agreements as of December 31, 2018 were as follows:

Year Ending December 31,	Finance leases		Operating leases		Total
2019	$	925	$	3,007	$	3,932
2020	925		1,845		2,770
2021	925		1,856		2,781
2022	925		1,673		2,598
2023	925		1,593		2,518
Thereafter	3,923		33,959		37,882
	$	8,548	$	43,933	$	52,481

As Lessor

As of March 31, 2019, the fixed contractual lease payments, including minimum rents and fixed CAM amounts, to be received over the next five years pursuant to the terms of noncancellable operating leases with initial terms greater than one year are included in the table below. The amounts presented assume that no leases are renewed and no renewal options are exercised. Additionally, the table does not include variable lease payments that may be received under certain leases for percentage rents or the reimbursement of operating costs, such as common area expenses, utilities, insurance and real estate taxes. These variable lease payments are recognized in the period when the applicable expenditures are incurred or in the case of percentage rents when the sales data is made available.

(in thousands of dollars)
April 1 to December 31, 2019	$	166,726
2020	207,390
2021	190,026
2022	170,143
2023	150,672
Thereafter	523,579
	$	1,408,536

Leases

LEASES

As discussed in Note 1, we adopted the new lease accounting standard effective January 1, 2019.

As Lessee

We have entered into ground leases for portions of the land at Springfield Town Center and at Plymouth Meeting Mall. We have also entered into an office lease for our headquarters location, as well as into vehicle and equipment leases as a lessee. The initial terms of these agreements generally range from three to 40 years, with certain agreements containing extension options for up to an additional 60 years. As of March 31, 2019, we included only those renewal options we were reasonably certain of exercising. Upon lease execution, the Company measures a liability for the present value of future lease payments over the noncancellable period of the lease and any renewal option period we are reasonably certain of exercising. Certain agreements require that we pay a portion of reimbursable expenses such as CAM, utilities, insurance and real estate taxes. These payments are not included in the calculation of the lease liability and are presented as variable lease costs.

We applied judgments related to the determination of the discount rates used to calculate the lease liability upon adoption at January 1, 2019. In order to calculate our incremental borrowing rate under ASC 842, we utilized judgments and estimates regarding our implied credit rating using market data and made other adjustments to determine an appropriate incremental borrowing rate as of January 1, 2019.

The following table presents additional information pertaining to the Company’s leases:

	Three Months Ended March 31, 2019
(in thousands of dollars)	Solar Panel Leases		Ground Leases		Office, equipment, and vehicle leases		Total
Finance lease cost:
Amortization of right-of-use assets	$	188	$	—	$	—	$	188
Interest on lease liabilities	76		—		—		76
Operating lease costs	—		439		542		981
Variable lease costs	—		41		45		86
Total lease costs	$	264	$	480	$	587	$	1,331

Other information related to leases as of and for the three months ended March 31, 2019 is as follows:

(in thousands of dollars)
Cash paid for the amounts included in the measurement of lease liabilities
Operating cash flows from finance leases	$	76
Operating cash flows from operating leases	$	593
Financing cash flows from finance leases	$	155
Weighted average remaining lease term-finance leases (months)	108
Weighted average remaining lease term-operating leases (months)	342
Weighted average discount rate-finance leases	4.41		%
Weighted average discount rate-operating leases	6.63		%

Future payments against lease liabilities as of March 31, 2019 are as follows:

(in thousands of dollars)	Finance leases			Operating leases			Total
April 1 to December 31, 2019	$	694		$	2,346		$	3,040
2020	925			1,979			2,904
2021	925			1,906			2,831
2022	925			1,625			2,550
2023	925			1,587			2,512
Thereafter	3,923			48,437			52,360
Total undiscounted lease payments	8,317			57,880			66,197
Less imputed interest	(1,462		)	(33,773		)	(35,235		)
Total lease liabilities	$	6,855		$	24,107		$	30,962

Future minimum lease payments under these agreements as of December 31, 2018 were as follows:

Year Ending December 31,	Finance leases		Operating leases		Total
2019	$	925	$	3,007	$	3,932
2020	925		1,845		2,770
2021	925		1,856		2,781
2022	925		1,673		2,598
2023	925		1,593		2,518
Thereafter	3,923		33,959		37,882
	$	8,548	$	43,933	$	52,481

As Lessor

As of March 31, 2019, the fixed contractual lease payments, including minimum rents and fixed CAM amounts, to be received over the next five years pursuant to the terms of noncancellable operating leases with initial terms greater than one year are included in the table below. The amounts presented assume that no leases are renewed and no renewal options are exercised. Additionally, the table does not include variable lease payments that may be received under certain leases for percentage rents or the reimbursement of operating costs, such as common area expenses, utilities, insurance and real estate taxes. These variable lease payments are recognized in the period when the applicable expenditures are incurred or in the case of percentage rents when the sales data is made available.

(in thousands of dollars)
April 1 to December 31, 2019	$	166,726
2020	207,390
2021	190,026
2022	170,143
2023	150,672
Thereafter	523,579
	$	1,408,536