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Lease Obligaitons
 9 Months Ended
Sep. 30, 2019
Leases [Abstract]  
Lease Obligations Lease Obligations
We are engaged in the operation of shopping centers, which are either owned or, with respect to certain shopping centers, operated under operating ground leases. These ground leases expire at various dates through 2069 with renewal options ranging from five years to 20 years, which have been predominantly excluded from our lease liabilities, and in some cases, include options to purchase the underlying asset by either the lessor or lessee. Generally, our ground lease variable payments for real estate taxes, insurance and utilities are paid directly by us and are not a component of rental expense. Most of our leases have increasing minimum rental rates during the terms of the leases through escalation provisions and also may include an amount based on a percentage of operating revenues or sublease tenant revenue. Space in our shopping centers is leased to tenants pursuant to agreements that generally provide for terms of 10 years or less and may include multiple options to extend the lease term in increments up to five years, for annual rentals subject to upward adjustments based on operating expense levels, sales volume, or contractual increases as defined in the lease agreements.
Also, we have two properties under a finance lease that consists of variable lease payments with a purchase option. The right-of-use asset associated with this finance lease at September 30, 2019 was $8.9 million. At December 31, 2018, the related assets associated with a capital lease in buildings and improvements totaled $15.7 million, and the balance of accumulated depreciation was $14.1 million. Amortization of property under the finance lease is included in depreciation and amortization expense. Note that amounts prior to January 1, 2019 were accounted for under ASC No. 840.
A schedule of lease costs including weighted average lease terms and weighted-average discount rates is as follows (in thousands, except as noted):
 
Three Months Ended
September 30, 2019
 
Nine Months Ended
September 30, 2019
Lease cost:
 
 
 
Operating lease cost:
 
 
 
Included in Operating expense
$
761

 
$
2,283

Included in General and administrative expense
80

 
208

Finance cost:
 
 
 
Amortization of right-of-use asset (included in Depreciation and Amortization)
46

 
129

Interest on lease liability (included in Interest expense, net)
410

 
1,231

Short-term lease cost
—

 
44

Variable lease cost
72

 
206

Sublease income (included in Rentals, net)
(6,858
)
 
(20,392
)
Total lease cost
$
(5,489
)
 
$
(16,291
)
 
 
 
 
 
September 30, 2019
Weighted-average remaining lease term (in years):
 
 
 
Operating leases
 
 
41.7

Finance lease
 
 
4.3

 
 
 
 
Weighted-average discount rate (percentage):
 
 
 
Operating leases
 
 
4.9
%
Finance lease
 
 
7.5
%
A reconciliation of our lease liabilities on an undiscounted cash flow basis, which primarily represents shopping center ground leases, for the subsequent five years and thereafter ending December 31, as calculated as of September 30, 2019, is as follows (in thousands):
 
Operating
 
Finance
Lease payments:
 
 
 
2019 remaining
$
570

 
$
435

2020
2,696

 
1,744

2021
2,585

 
1,751

2022
2,576

 
1,759

2023
2,458

 
23,037

2024
2,158

 
 
Thereafter
97,187

 
 
Total
$
110,230

 
$
28,726

 
 
 
 
Lease liabilities(1)
43,100

 
21,828

Undiscounted excess amount
$
67,130

 
$
6,898

___________________
(1)
Operating lease liabilities are included in Other Liabilities, and finance lease liabilities are included in Debt, net in our Condensed Consolidated Balance Sheet.
Scheduled minimum rental payments as defined under ASC No. 840, under the terms of all non-cancelable operating leases in which we are the lessee, principally for shopping center ground leases, for the subsequent five years and thereafter ending December 31, as calculated as of December 31, 2018, were as follows (in thousands):
 
Operating
 
Finance
Lease payments:
 
 
 
2019
$
2,779

 
$
1,642

2020
2,536

 
1,635

2021
2,334

 
1,627

2022
2,318

 
1,618

2023
2,283

 
22,878

Thereafter
99,302

 
 
Total
$
111,552

 
$
29,400

Future undiscounted, sublease payments, applicable to the ground lease rentals, under the terms of all non-cancelable tenant leases, excluding estimated variable payments for the subsequent five years and thereafter ending December 31, as calculated as of September 30, 2019 and December 31, 2018, were as follows (in thousands):
 
September 30, 2019
 
December 31, 2018
Sublease payments:
 
 
 
Finance lease(1)
$
11,257

 
$
14,382

Operating leases:
 
 
 
2019 remaining
$
6,033

 
$
22,528

2020
23,454

 
20,903

2021
21,352

 
18,886

2022
19,579

 
17,245

2023
17,436

 
15,128

2024
12,255

 
 
Thereafter
36,572

 
43,439

Total
$
136,681

 
$
138,129

___________________
(1)
The sublease payments related to our finance lease represents cumulative payments through the lease term ending in 2023.
Lease Obligations Lease Obligations
We are engaged in the operation of shopping centers, which are either owned or, with respect to certain shopping centers, operated under operating ground leases. These ground leases expire at various dates through 2069 with renewal options ranging from five years to 20 years, which have been predominantly excluded from our lease liabilities, and in some cases, include options to purchase the underlying asset by either the lessor or lessee. Generally, our ground lease variable payments for real estate taxes, insurance and utilities are paid directly by us and are not a component of rental expense. Most of our leases have increasing minimum rental rates during the terms of the leases through escalation provisions and also may include an amount based on a percentage of operating revenues or sublease tenant revenue. Space in our shopping centers is leased to tenants pursuant to agreements that generally provide for terms of 10 years or less and may include multiple options to extend the lease term in increments up to five years, for annual rentals subject to upward adjustments based on operating expense levels, sales volume, or contractual increases as defined in the lease agreements.
Also, we have two properties under a finance lease that consists of variable lease payments with a purchase option. The right-of-use asset associated with this finance lease at September 30, 2019 was $8.9 million. At December 31, 2018, the related assets associated with a capital lease in buildings and improvements totaled $15.7 million, and the balance of accumulated depreciation was $14.1 million. Amortization of property under the finance lease is included in depreciation and amortization expense. Note that amounts prior to January 1, 2019 were accounted for under ASC No. 840.
A schedule of lease costs including weighted average lease terms and weighted-average discount rates is as follows (in thousands, except as noted):
 
Three Months Ended
September 30, 2019
 
Nine Months Ended
September 30, 2019
Lease cost:
 
 
 
Operating lease cost:
 
 
 
Included in Operating expense
$
761

 
$
2,283

Included in General and administrative expense
80

 
208

Finance cost:
 
 
 
Amortization of right-of-use asset (included in Depreciation and Amortization)
46

 
129

Interest on lease liability (included in Interest expense, net)
410

 
1,231

Short-term lease cost
—

 
44

Variable lease cost
72

 
206

Sublease income (included in Rentals, net)
(6,858
)
 
(20,392
)
Total lease cost
$
(5,489
)
 
$
(16,291
)
 
 
 
 
 
September 30, 2019
Weighted-average remaining lease term (in years):
 
 
 
Operating leases
 
 
41.7

Finance lease
 
 
4.3

 
 
 
 
Weighted-average discount rate (percentage):
 
 
 
Operating leases
 
 
4.9
%
Finance lease
 
 
7.5
%
A reconciliation of our lease liabilities on an undiscounted cash flow basis, which primarily represents shopping center ground leases, for the subsequent five years and thereafter ending December 31, as calculated as of September 30, 2019, is as follows (in thousands):
 
Operating
 
Finance
Lease payments:
 
 
 
2019 remaining
$
570

 
$
435

2020
2,696

 
1,744

2021
2,585

 
1,751

2022
2,576

 
1,759

2023
2,458

 
23,037

2024
2,158

 
 
Thereafter
97,187

 
 
Total
$
110,230

 
$
28,726

 
 
 
 
Lease liabilities(1)
43,100

 
21,828

Undiscounted excess amount
$
67,130

 
$
6,898

___________________
(1)
Operating lease liabilities are included in Other Liabilities, and finance lease liabilities are included in Debt, net in our Condensed Consolidated Balance Sheet.
Scheduled minimum rental payments as defined under ASC No. 840, under the terms of all non-cancelable operating leases in which we are the lessee, principally for shopping center ground leases, for the subsequent five years and thereafter ending December 31, as calculated as of December 31, 2018, were as follows (in thousands):
 
Operating
 
Finance
Lease payments:
 
 
 
2019
$
2,779

 
$
1,642

2020
2,536

 
1,635

2021
2,334

 
1,627

2022
2,318

 
1,618

2023
2,283

 
22,878

Thereafter
99,302

 
 
Total
$
111,552

 
$
29,400

Future undiscounted, sublease payments, applicable to the ground lease rentals, under the terms of all non-cancelable tenant leases, excluding estimated variable payments for the subsequent five years and thereafter ending December 31, as calculated as of September 30, 2019 and December 31, 2018, were as follows (in thousands):
 
September 30, 2019
 
December 31, 2018
Sublease payments:
 
 
 
Finance lease(1)
$
11,257

 
$
14,382

Operating leases:
 
 
 
2019 remaining
$
6,033

 
$
22,528

2020
23,454

 
20,903

2021
21,352

 
18,886

2022
19,579

 
17,245

2023
17,436

 
15,128

2024
12,255

 
 
Thereafter
36,572

 
43,439

Total
$
136,681

 
$
138,129

___________________
(1)
The sublease payments related to our finance lease represents cumulative payments through the lease term ending in 2023.