Leases

3 Months Ended

Mar. 31, 2024

Leases [Abstract]

Leases

Leases

Lessor Arrangements

We lease real estate properties, comprised primarily of office properties and data center shells, to third parties. These leases encompass all, or a portion, of properties, with various expiration dates. Our lease revenue is comprised of: fixed-lease revenue, including contractual rent billings under leases recognized on a straight-line basis over lease terms and amortization of lease incentives and above- and below-market lease intangibles; and variable-lease revenue, including tenant expense recoveries, lease termination revenue and other revenue from tenants that is not fixed under leases. The table below sets forth our composition of lease revenue recognized between fixed- and variable-lease revenue (in thousands):

	For the Three Months Ended March 31,
Lease revenue	2024		2023
Fixed	$	126,198	$	116,039
Variable	39,235		34,521
	$	165,433	$	150,560

Lessee Arrangements

As of March 31, 2024, our balance sheet included $42.9 million in right-of-use assets associated primarily with land leased from third parties underlying certain properties that we are operating with various expiration dates. Our property right-of-use assets and property lease liabilities on our consolidated balance sheets consisted of the following (in thousands):

Leases	Balance Sheet Location	March 31, 2024		December 31, 2023
Right-of-use assets
Operating leases - Property	Property - operating right-of-use assets	$	40,368	$	41,296
Finance leases - Property	Prepaid expenses and other assets, net	2,547		2,565
Total right-of-use assets		$	42,915	$	43,861
Lease liabilities
Operating leases - Property	Property - operating lease liabilities	$	33,141	$	33,931
Finance leases - Property	Other liabilities	409		415
Total lease liabilities		$	33,550	$	34,346

As of March 31, 2024, our operating leases had a weighted average remaining lease term of 51 years and a weighted average discount rate of 7.32%, while our finance leases had a weighted average remaining lease term of nine years and a weighted average discount rate of 9.14%. The table below presents our total property lease cost (in thousands):

	Statement of Operations Location	For the Three Months Ended March 31,
Lease cost		2024		2023
Operating lease cost
Property leases - fixed	Property operating expenses	$	1,859	$	1,535
Property leases - variable	Property operating expenses	34		17
Finance lease cost
Amortization of property right-of-use assets	Property operating expenses	19		20
Interest on lease liabilities	Interest expense	9		13
		$	1,921	$	1,585

The table below presents the effect of property lease payments on our consolidated statements of cash flows (in thousands):

	For the Three Months Ended March 31,
Supplemental cash flow information	2024		2023
Cash paid for amounts included in the measurement of lease liabilities:
Operating cash flows for operating leases	$	1,724	$	1,185
Operating cash flows for financing leases	$	9	$	13
Financing cash flows for financing leases	$	6	$	4

Payments on property leases were due as follows (in thousands):

	March 31, 2024
Year Ending December 31,	Operating Leases		Finance Leases
2024 (1)	$	5,099	$	46
2025	2,403		63
2026	1,815		65
2027	1,830		66
2028	1,847		69
Thereafter	139,906		297
Total lease payments	152,900		606
Less: Amount representing interest	(119,759)		(197)
Lease liability	$	33,141	$	409

(1)Represents the nine months ending December 31, 2024.

Leases

Leases

Lessor Arrangements

We lease real estate properties, comprised primarily of office properties and data center shells, to third parties. These leases encompass all, or a portion, of properties, with various expiration dates. Our lease revenue is comprised of: fixed-lease revenue, including contractual rent billings under leases recognized on a straight-line basis over lease terms and amortization of lease incentives and above- and below-market lease intangibles; and variable-lease revenue, including tenant expense recoveries, lease termination revenue and other revenue from tenants that is not fixed under leases. The table below sets forth our composition of lease revenue recognized between fixed- and variable-lease revenue (in thousands):

	For the Three Months Ended March 31,
Lease revenue	2024		2023
Fixed	$	126,198	$	116,039
Variable	39,235		34,521
	$	165,433	$	150,560

Lessee Arrangements

As of March 31, 2024, our balance sheet included $42.9 million in right-of-use assets associated primarily with land leased from third parties underlying certain properties that we are operating with various expiration dates. Our property right-of-use assets and property lease liabilities on our consolidated balance sheets consisted of the following (in thousands):

Leases	Balance Sheet Location	March 31, 2024		December 31, 2023
Right-of-use assets
Operating leases - Property	Property - operating right-of-use assets	$	40,368	$	41,296
Finance leases - Property	Prepaid expenses and other assets, net	2,547		2,565
Total right-of-use assets		$	42,915	$	43,861
Lease liabilities
Operating leases - Property	Property - operating lease liabilities	$	33,141	$	33,931
Finance leases - Property	Other liabilities	409		415
Total lease liabilities		$	33,550	$	34,346

As of March 31, 2024, our operating leases had a weighted average remaining lease term of 51 years and a weighted average discount rate of 7.32%, while our finance leases had a weighted average remaining lease term of nine years and a weighted average discount rate of 9.14%. The table below presents our total property lease cost (in thousands):

	Statement of Operations Location	For the Three Months Ended March 31,
Lease cost		2024		2023
Operating lease cost
Property leases - fixed	Property operating expenses	$	1,859	$	1,535
Property leases - variable	Property operating expenses	34		17
Finance lease cost
Amortization of property right-of-use assets	Property operating expenses	19		20
Interest on lease liabilities	Interest expense	9		13
		$	1,921	$	1,585

The table below presents the effect of property lease payments on our consolidated statements of cash flows (in thousands):

	For the Three Months Ended March 31,
Supplemental cash flow information	2024		2023
Cash paid for amounts included in the measurement of lease liabilities:
Operating cash flows for operating leases	$	1,724	$	1,185
Operating cash flows for financing leases	$	9	$	13
Financing cash flows for financing leases	$	6	$	4

Payments on property leases were due as follows (in thousands):

	March 31, 2024
Year Ending December 31,	Operating Leases		Finance Leases
2024 (1)	$	5,099	$	46
2025	2,403		63
2026	1,815		65
2027	1,830		66
2028	1,847		69
Thereafter	139,906		297
Total lease payments	152,900		606
Less: Amount representing interest	(119,759)		(197)
Lease liability	$	33,141	$	409

(1)Represents the nine months ending December 31, 2024.

Leases

Leases

Lessor Arrangements

We lease real estate properties, comprised primarily of office properties and data center shells, to third parties. These leases encompass all, or a portion, of properties, with various expiration dates. Our lease revenue is comprised of: fixed-lease revenue, including contractual rent billings under leases recognized on a straight-line basis over lease terms and amortization of lease incentives and above- and below-market lease intangibles; and variable-lease revenue, including tenant expense recoveries, lease termination revenue and other revenue from tenants that is not fixed under leases. The table below sets forth our composition of lease revenue recognized between fixed- and variable-lease revenue (in thousands):

	For the Three Months Ended March 31,
Lease revenue	2024		2023
Fixed	$	126,198	$	116,039
Variable	39,235		34,521
	$	165,433	$	150,560

Lessee Arrangements

As of March 31, 2024, our balance sheet included $42.9 million in right-of-use assets associated primarily with land leased from third parties underlying certain properties that we are operating with various expiration dates. Our property right-of-use assets and property lease liabilities on our consolidated balance sheets consisted of the following (in thousands):

Leases	Balance Sheet Location	March 31, 2024		December 31, 2023
Right-of-use assets
Operating leases - Property	Property - operating right-of-use assets	$	40,368	$	41,296
Finance leases - Property	Prepaid expenses and other assets, net	2,547		2,565
Total right-of-use assets		$	42,915	$	43,861
Lease liabilities
Operating leases - Property	Property - operating lease liabilities	$	33,141	$	33,931
Finance leases - Property	Other liabilities	409		415
Total lease liabilities		$	33,550	$	34,346

As of March 31, 2024, our operating leases had a weighted average remaining lease term of 51 years and a weighted average discount rate of 7.32%, while our finance leases had a weighted average remaining lease term of nine years and a weighted average discount rate of 9.14%. The table below presents our total property lease cost (in thousands):

	Statement of Operations Location	For the Three Months Ended March 31,
Lease cost		2024		2023
Operating lease cost
Property leases - fixed	Property operating expenses	$	1,859	$	1,535
Property leases - variable	Property operating expenses	34		17
Finance lease cost
Amortization of property right-of-use assets	Property operating expenses	19		20
Interest on lease liabilities	Interest expense	9		13
		$	1,921	$	1,585

The table below presents the effect of property lease payments on our consolidated statements of cash flows (in thousands):

	For the Three Months Ended March 31,
Supplemental cash flow information	2024		2023
Cash paid for amounts included in the measurement of lease liabilities:
Operating cash flows for operating leases	$	1,724	$	1,185
Operating cash flows for financing leases	$	9	$	13
Financing cash flows for financing leases	$	6	$	4

Payments on property leases were due as follows (in thousands):

	March 31, 2024
Year Ending December 31,	Operating Leases		Finance Leases
2024 (1)	$	5,099	$	46
2025	2,403		63
2026	1,815		65
2027	1,830		66
2028	1,847		69
Thereafter	139,906		297
Total lease payments	152,900		606
Less: Amount representing interest	(119,759)		(197)
Lease liability	$	33,141	$	409

(1)Represents the nine months ending December 31, 2024.