Leases

Shopping center space is leased to tenants and certain anchors pursuant to lease agreements. Tenant leases typically provide for minimum rent, percentage rent, and other charges to cover certain operating costs. Future minimum rent under operating leases in effect at December 31, 2012 for operating centers assuming no new or renegotiated leases or option extensions on anchor agreements, is summarized as follows:



2013	$	385,251
2014	355,941
2015	320,254
2016	283,431
2017	241,726
Thereafter	781,082

Certain shopping centers, as lessees, have ground and building leases expiring at various dates through the year 2107-05-01. In addition, one center has the option to extend the lease term for five 10-year periods and another center has an option to extend the term for three 10-year periods. Ground rent expense is recognized on a straight-line basis over the lease terms.

The Company also leases its office facilities and certain equipment. Office facility and equipment leases expire at various dates through the year 2018. Additionally, one of the leases has a 1-year extension option and one lease has a 5-year extension option. The Company’s U.S. headquarters is rented from an affiliate of the Taubman family under a 10-year lease, with a 5-year extension option.

Rental expense on a straight-line basis under operating leases was $12.0 million in 2012, $9.8 million in 2011, and $10.2 million in 2010. Included in these amounts are related party office rental expense of $2.2 million in 2012 through 2010. Contingent rent expense under operating leases was $0.9 million in 2012. Payables representing straight-line rent adjustments under lease agreements were $40.0 million and $38.8 million as of December 31, 2012 and 2011, respectively.

The following is a schedule of future minimum rental payments required under operating leases:



2013	$	12,306
2014	11,111
2015	7,731
2016	7,028
2017	6,963
Thereafter	390,225

The table above includes $2.8 million in both 2013 and 2014 and $0.7 million in 2015 of related party amounts.

City Creek Center, a mixed-use project in Salt Lake City, Utah, opened in March 2012. The Company owns the retail space subject to a long-term participating lease. City Creek Reserve, Inc. (CCRI), an affiliate of the LDS Church is the participating lessor. The Company owns 100% of the leasehold interest in the retail buildings and property. CCRI has an option to purchase the Company’s interest at fair value at various points in time over the term of the lease. In addition to the minimum rent included in the table above, the Company pays contingent rent based on the performance of the center.