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Leases

9 Months Ended

Sep. 30, 2023

Revenues

Approximate future minimum revenues from rentals under non-cancelable operating leases in effect at September 30, 2023, assuming no new or renegotiated leases or option extensions on lease agreements and no early lease terminations were as follows:


Year Ending December 31,
	(In thousands)
2023 (remaining)	$	37,516
2024	147,155
2025	129,513
2026	111,377
2027	88,810
Thereafter	235,321
Total	$	749,692

We recognized rental income related to variable lease payments of $33.2 million and $34.7 million for the nine months ended September 30, 2023 and 2022, respectively.

Substantially all of the assets included as income producing properties, net on the condensed consolidated balance sheets, relate to our portfolio of wholly-owned shopping centers, in which we are the lessor under operating leases with our tenants. As of September 30, 2023, the Company’s wholly-owned portfolio was 93.5% leased.

Expenses

We have operating leases for our two corporate offices in New York, New York and Southfield, Michigan, that expire in January 2024 and December 2024, respectively. Our operating lease in Southfield includes two additional five year renewals which are all exercisable at our option. We also have an operating ground lease at Centennial Shops located in Edina, Minnesota which includes rent escalations throughout the lease period and expires in April 2105. In addition, we have a finance ground lease at our Buttermilk Towne Center with the City of Crescent Springs that expires in December 2032. Leases with an initial term of 12 months or less are not recorded on the balance sheet; we recognize lease expenses for these leases on a straight-line basis over the lease term.

The components of lease expense were as follows:


		Three Months Ended September 30,				Nine Months Ended September 30,
Statements of Operations	Classification	2023		2022		2023		2022
		(In thousands)
Operating ground lease cost	Non-recoverable operating expense	$	291	$	291	$	872	$	872
Operating administrative lease cost	General and administrative expense	149		164		459		490
Finance lease cost	Interest Expense	10		11		30		32

Supplemental balance sheet information related to leases is as follows:


Balance Sheet	Classification	September 30, 2023			December 31, 2022
		(In thousands)
ASSETS
Operating lease assets	Operating lease right-of-use assets	$	16,759		$	17,269
Finance lease asset	Land	10,095			10,095
Total leased assets		$	26,854		$	27,364

LIABILITIES
Operating lease liabilities	Operating lease liabilities	$	16,684		$	17,016
Finance lease liability	Finance lease obligation	763			763
Total lease liabilities		$	17,447		$	17,779

Weighted Average Remaining Lease Terms
Operating leases		74 years			73 years
Finance lease		9 years			10 years
Weighted Average Incremental Borrowing Rate
Operating leases		6.27		%	6.22		%
Finance lease		5.23		%	5.23		%

Supplemental cash flow information related to leases is as follows:


	Nine Months Ended September 30,
	2023		2022
	(In thousands)
Cash paid for amounts included in the measurement of lease liabilities:
Operating cash flows from operating leases	$	1,153	$	1,174
Operating cash flows from finance lease	—		—
Financing cash flows from finance lease	—		—

Maturities of lease liabilities as of September 30, 2023 were as follows:


Maturity of Lease Liabilities	Operating Leases		Finance Lease
	(In thousands)
2023 (remaining)	$	374	$	100
2024	1,118		100
2025	1,048		100
2026	1,093		100
2027	1,108		100
Thereafter	92,228		500
Total lease payments	$	96,969	$	1,000
Less imputed interest	(80,285)		(237)
Total	$	16,684	$	763

Leases