Leases

9 Months Ended

Sep. 30, 2023

Lessor Accounting

The Company is the lessor for its residential and non-residential leases and these leases are accounted for as operating leases under the lease standard.

The following table presents the lease income types relating to lease payments for residential and non-residential leases along with the total other rental income for the nine months ended September 30, 2023 and 2022 (amounts in thousands):


	Nine Months Ended September 30, 2023								Nine Months Ended September 30, 2022
Income Type	Residential Leases			Non-Residential Leases		Total			Residential Leases			Non-Residential Leases			Total
Residential and non-residential rent	$	1,926,869		$	46,642	$	1,973,511		$	1,816,435		$	48,279		$	1,864,714
Utility recoveries (RUBS income) (1)		64,007			662		64,669			59,826			596			60,422
Parking rent		32,955			354		33,309			32,546			322			32,868
Other lease revenue (2)		(19,172	)		330		(18,842	)		(4,016	)		(568	)		(4,584	)
Total lease revenue	$	2,004,659		$	47,988		2,052,647		$	1,904,791		$	48,629			1,953,420
Parking revenue							30,033									27,701
Other revenue							63,784									54,356
Total other rental income (3)							93,817									82,057
Rental income						$	2,146,464								$	2,035,477

(1)

RUBS income primarily consists of variable payments representing the recovery of utility costs from residents.

(2)

Other lease revenue consists of the revenue adjustment related to bad debt (see below for further discussion) and other miscellaneous lease revenue.

(3)

Other rental income is accounted for under the revenue recognition standard and primarily consists of third-party transient parking revenue, residential lease settlement income and ancillary income such as cable and laundry revenue.

The following table presents the lease income types relating to lease payments for residential and non-residential leases along with the total other rental income for the quarters ended September 30, 2023 and 2022 (amounts in thousands):


	Quarter Ended September 30, 2023									Quarter Ended September 30, 2022
Income Type	Residential Leases			Non-Residential Leases			Total			Residential Leases			Non-Residential Leases			Total
Residential and non-residential rent	$	650,531		$	14,669		$	665,200		$	622,348		$	16,184		$	638,532
Utility recoveries (RUBS income) (1)		21,221			243			21,464			20,243			227			20,470
Parking rent		11,062			129			11,191			10,840			120			10,960
Other lease revenue (2)		(5,752	)		(404	)		(6,156	)		(3,127	)		(371	)		(3,498	)
Total lease revenue	$	677,062		$	14,637			691,699		$	650,304		$	16,160			666,464
Parking revenue								9,638									9,270
Other revenue								22,730									19,365
Total other rental income (3)								32,368									28,635
Rental income							$	724,067								$	695,099

(1)

RUBS income primarily consists of variable payments representing the recovery of utility costs from residents.

(2)

Other lease revenue consists of the revenue adjustment related to bad debt (see below for further discussion) and other miscellaneous lease revenue.

(3)

The following table presents residential and non-residential accounts receivable and straight-line receivable balances for the Company’s properties as of September 30, 2023 and December 31, 2022 (amounts in thousands):


	Residential						Non-Residential
Balance Sheet (Other assets):	September 30, 2023			December 31, 2022			September 30, 2023				December 31, 2022
Resident/tenant accounts receivable balances	$	25,532		$	35,688		$	2,714			$	2,820
Allowance for doubtful accounts		(20,000	)		(31,405	)		(1,703	)			(2,152	)
Net receivable balances	$	5,532		$	4,283		$	1,011			$	668

Straight-line receivable balances	$	8,604		$	4,398		$	11,851		(1)	$	13,795

(1)

During the third quarter of 2023, the Company recorded a non-cash write-off of approximately $1.5 million in straight-line receivables due to the recent bankruptcy of Rite Aid.

The following table presents residential bad debt for the Company’s properties for the nine months and quarters ended September 30, 2023 and 2022 (amounts in thousands):


	Nine Months Ended September 30,						Quarter Ended September 30,
Income Statement (Rental income):	2023			2022			2023			2022
Bad debt, net (1)	$	28,862		$	14,854		$	9,042		$	6,707
% of rental income		1.4	%		0.8	%		1.3	%		1.0	%

(1)

Bad debt, net benefited from additional resident payments due to governmental rental assistance programs of approximately $2.4 million and $32.3 million for the nine months ended September 30, 2023 and 2022, respectively, and $0.5 million and $7.3 million for the quarters ended September 30, 2023 and 2022, respectively.