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LEASES

12 Months Ended

Dec. 31, 2019

5. LEASES

Lessor Accounting

The Company leases properties to tenants under operating leases with various expiration dates. Lease payments on noncancellable leases at December 31, 2019 are as follows (in thousands):



Year	Minimum Rent
2020	$	389,956
2021	369,375
2022	338,435
2023	311,729
2024	280,631
Thereafter	1,234,006

Lease payments on noncancellable leases at December 31, 2018, which were determined under under ASC 840 and are therefore not adjusted for increases based on CPI, are as follows (in thousands):



Year		Minimum Rent
2019		392,058
2020		372,619
2021		349,160
2022		304,445
2023		277,388
Thereafter		1,265,810

Lessee Accounting

As of December 31, 2019, the Company is the lessee under six long-term ground leases classified as operating leases. Certain of the Company’s ground leases contain extension options and the Company considered all relevant factors in determining if it was reasonably certain that it would exercise such extension options. The Company concluded that it was not reasonably certain that it would exercise the extension options and, therefore, has not included the extension period in the remaining lease terms. With the exception of certain ground leases that are subject to rent increases periodically based on the CPI index, all lease payments under the ground lease are fixed.

The table below summarizes the Company’s operating lease cost (in thousands) recognized through “Property operating expenses” on the consolidated statements of operations:



	Twelve Months Ended December 31,
Lease Cost	2019
Fixed lease cost	$	2,100
Variable lease cost	54
Total	$	2,154

Weighted-average remaining lease term (years)	52.7
Weighted-average discount rate	6.3		%

Lease payments by the Company under the terms of all noncancellable ground leases of land are expensed on a straight-line basis regardless of when payments are due. The Company’s ground leases, excluding prepaid ground leases, have remaining lease terms ranging from 9 to 65 years. Lease payments on noncancellable leases at December 31, 2019 are as follows (in thousands):



Year	Minimum Rent
2020	$	1,217
2021	1,232
2022	1,248
2023	1,263
2024	1,305
Thereafter	110,452
Total lease payments	$	116,717
Less: Imputed interest	94,163
Present value of operating lease liabilities	$	22,554

The Company obtained ground tenancy rights related to three properties in Philadelphia, Pennsylvania, which provide for contingent rent participation by the lessor in certain capital transactions and net operating cash flows of the properties after certain returns are achieved by the Company. Such amounts, if any, will be reflected as contingent rent when incurred. The leases also provide for payment by the Company of certain operating costs relating to the land, primarily real estate taxes. The above schedule of future minimum rental payments does not include any contingent rent amounts or any reimbursed expenses.

Lease payments on noncancellable leases at December 31, 2018, which were determined under ASC 840 and are therefore not adjusted for increases based on CPI, are as follows (in thousands):



Year	Minimum Rent
2019	$	1,222
2020	1,222
2021	1,222
2022	1,222
2023	1,222
Thereafter	55,689
Total	$	61,799

LEASES