XML 40 R17.htm IDEA: XBRL DOCUMENT

Note 9 - Leases

3 Months Ended

Mar. 31, 2024

9. Leases

Lessor Leases

The Company’s primary source of revenues is derived from lease agreements, which includes rental income and expense reimbursement. The Company’s lease income is comprised of minimum base rent, expense reimbursements, percentage rent, lease termination fee income, ancillary income, amortization of above-market and below-market rent adjustments and straight-line rent adjustments.

The disaggregation of the Company’s lease income, which is included in Revenues from rental properties, net on the Company’s Condensed Consolidated Statements of Operations, as either fixed or variable lease income based on the criteria specified in ASC 842, for the three months ended March 31, 2024 and 2023, were as follows (in thousands):

	Three Months Ended March 31,
	2024			2023
Lease income:
Fixed lease income (1)	$	397,695		$	348,338
Variable lease income (2)		98,281			90,071
Above-market and below-market leases amortization, net		5,901			2,989
Adjustments for potentially uncollectible revenues and disputed amounts (3)		(2,972	)		(3,060	)
Total lease income	$	498,905		$	438,338

(1)

Includes minimum base rents, expense reimbursements, ancillary income and straight-line rent adjustments.

(2)

Includes minimum base rents, expense reimbursements, percentage rent, lease termination fee income and ancillary income.

(3)

The amounts represent adjustments associated with potentially uncollectible revenues and disputed amounts.

Lessee Leases

The Company currently leases real estate space under non-cancelable operating lease agreements for ground leases and administrative office leases. The Company’s operating leases have remaining lease terms ranging from less than one to 81.1 years, some of which include options to extend the terms for up to an additional 75 years.

In connection with the RPT Merger, the Company obtained a $13.5 million operating right-of-use asset (excluding an intangible right-of-use asset of $7.4 million) in exchange for a new operating lease liability related to a property under an operating ground lease agreement. In addition, the Company obtained a finance intangible right-of-use asset of $6.8 million (which is included in Other assets on the Company’s Condensed Consolidated Balance Sheets).

The Company has three properties under finance leasing arrangements that consists of variable lease payments with a bargain purchase option. As of March 31, 2024, the finance right-of-use assets of $33.0 million are included in Other assets on the Company’s Condensed Consolidated Balance Sheets and finance lease liabilities of $24.4 million are included in Other liabilities on the Company’s Condensed Consolidated Balance Sheets.

The weighted-average remaining non-cancelable lease term and weighted-average discount rates for the Company’s operating and finance leases as of March 31, 2024 were as follows:

	Operating Leases			Finance Leases
Weighted-average remaining lease term (in years)		30.28			0.75
Weighted-average discount rate		6.78	%		6.00	%

The components of the Company’s lease expense, which are included in interest expense, rent expense and general and administrative expense on the Company’s Condensed Consolidated Statements of Operations for the three months ended March 31, 2024 and 2023, were as follows (in thousands):

	Three Months Ended March 31,
	2024		2023
Lease cost:
Finance lease cost	$	366	$	319
Operating lease cost		3,871		3,701
Variable lease cost		659		561
Total lease cost	$	4,896	$	4,581