Leases

3 Months Ended

Mar. 31, 2023

11. Leases

As Lessor

The Company is engaged in the operation of shopping centers and other retail properties that are either owned or, with respect to certain shopping centers, operated under long-term ground leases (see below) that expire at various dates through June 20, 2066, with renewal options. Space in the shopping centers is leased to tenants pursuant to agreements that provide for terms ranging generally from one month to sixty years and generally provide for additional rents based on certain operating expenses as well as tenants’ sales volumes. During the three months ended March 31, 2023 and 2022, the Company earned $15.9 million and $14.7 million, respectively in variable lease revenues, primarily for real estate taxes and common area maintenance charges, which are included in rental income in the consolidated statements of income.

Reserve Analysis

The activity for the reserves related to billed rents and straight-line rents (including those under specific operating leases where the collection of rents is assessed to be not probable) is as follows:


	Three Months Ended March 31, 2023
			Specific Allowance
	Balance at Beginning of Period		Provision (Recovery), Net		Write-Offs			General Allowance			Balance at End of Period

Allowance for credit loss - billed rents	$	18,828	$	326	$	(327	)	$	—		$	18,827
Straight-line rent reserves		13,245		1,373		—			(900	)		13,718
Total - credit losses and reserves	$	32,073	$	1,699	$	(327	)	$	(900	)	$	32,545

As Lessee

During the three months ended March 31, 2023 and year ended December 31, 2022, there were no leasing transactions where the Company acted as lessee.

Additional disclosures regarding the Company’s leases as lessee are as follows:


	Three Months Ended March 31,
	2023			2022
Lease Cost
Finance lease cost:
Amortization of right-of-use assets	$	226		$	226
Interest on lease liabilities		106			100
Subtotal		332			326
Operating lease cost		1,337			1,375
Variable lease cost		20			208
Total lease cost	$	1,689		$	1,909

Other Information
Weighted-average remaining lease term - finance leases (years)		31.8			32.5
Weighted-average remaining lease term - operating leases (years)		13.4			13.9
Weighted-average discount rate - finance leases		6.3	%		6.3	%
Weighted-average discount rate - operating leases		5.1	%		5.1	%

Right-of-use assets – finance leases are included in Operating real estate (Note 2) in the consolidated balance sheets. Lease liabilities – finance leases are included in Accounts payable and other liabilities in the consolidated balance sheets (Note 5). Operating lease cost comprises amortization of right-of-use assets for operating properties (related to ground rents) or amortization of right-of-use assets for office and corporate assets and is included in Property operating expense or General and administrative expense, respectively, in the consolidated statements of income. Finance lease cost comprises amortization of right-of-use assets for certain ground leases, which is included in Property operating expense, as well as interest on lease liabilities, which is included in Interest expense in the consolidated statements of income.

Lease Obligations

The scheduled future minimum (i) rental revenues from rental properties under the terms of non-cancelable tenant leases greater than one year (assuming no new or renegotiated leases or option extensions for such premises) and (ii) rental payments under the terms of all non-cancelable operating and finance leases in which the Company is the lessee, principally for office space, land and equipment, as of March 31, 2023, are summarized as follows (in thousands):


			Minimum Rental Payments
Year Ending December 31,	Minimum Rental Revenues (a)		Operating Leases (b)			Finance Leases (b)
2023 (Remainder)	$	172,208	$	4,043		$	—
2024		232,169		5,414			—
2025		203,078		5,329			—
2026		176,212		5,173			—
2027		152,308		4,373			—
Thereafter		633,427		20,066			12,549
		1,569,402		44,398			12,549
Interest		—		(10,037	)		(5,421	)
Total	$	1,569,402	$	34,361		$	7,128

Amount represents contractual lease maturities at March 31, 2023 including any extension options that management determined were reasonably certain of exercise.

Minimum rental payments include $10.0 million of interest related to operating leases and $5.4 million related to finance leases and exclude options or renewals not reasonably certain of exercise.

During the three months ended March 31, 2023 and 2022, no single tenant or property collectively comprised more than 10% of the Company’s consolidated total revenues.