Leases

12 Months Ended

Dec. 31, 2021

Leases

Lessor Accounting

All of the Company’s leases are classified as operating leases. The Company's Lease income is comprised of both fixed and variable income. Fixed and in-substance fixed lease income includes stated amounts per the lease contract, which are primarily related to base rent, and in some cases stated amounts for CAM, real estate taxes, and insurance (“Recoverable Costs”). Income for these amounts is recognized on a straight-line basis.

Variable lease income includes the following two main items in the lease contracts:

(i)

Recoveries from tenants represents the tenants' contractual obligations to reimburse the Company for their portion of Recoverable Costs incurred. Generally the Company’s leases provide for the tenants to reimburse the Company based on the tenants’ share of the actual costs incurred in proportion to the tenants’ share of leased space in the property.

(ii)

Percentage rent represents amounts billable to tenants based on the tenants' actual sales volume in excess of levels specified in the lease contract.

The following table provides a disaggregation of lease income recognized as either fixed or variable lease income based on the criteria specified in ASC Topic 842:


(in thousands)	December 31, 2021		December 31, 2020			December 31, 2019
Operating lease income
Fixed and in-substance fixed lease income	$	797,502		807,603			813,444
Variable lease income		262,619		247,384			247,861
Other lease related income, net:
Above/below market rent and tenant rent inducement amortization, net		24,539		42,219			45,392
Uncollectible straight line rent (1)		5,227		(34,673	)		(7,002	)
Uncollectible amounts billable in lease income (1)		23,481		(82,367	)		(5,394	)
Total lease income	$	1,113,368		980,166			1,094,301

(1)

During the year ended December 31, 2021, the Company had improved rent collections following decreases in governmental operating restrictions on certain businesses which resulted in more favorable income than we experienced in 2020 during the height of the pandemic.

Future minimum rents under non-cancelable operating leases, excluding variable lease payments, are as follows:


(in thousands)
For the year ended December 31,	December 31, 2021
2022	$	793,177
2023		710,472
2024		609,200
2025		501,333
2026		398,196
Thereafter		1,409,012
Total	$	4,421,390

Lessee Accounting

The Company has shopping centers that are subject to non-cancelable, long-term ground leases where a third party owns the underlying land and has leased the land to the Company to construct and/or operate a shopping center.

The Company has 20 properties within its consolidated real estate portfolio that are either partially or completely on land subject to ground leases with third parties. Accordingly, the Company owns only a long-term leasehold or similar interest in these properties. These ground leases expire through the year 2101, and in most cases, provide for renewal options.

In addition, the Company has non-cancelable operating leases pertaining to office space from which it conducts its business. Office leases expire through the year 2029, and in many cases, provide for renewal options.

The ground and office lease expense is recognized on a straight-line basis over the term of the leases, including management's estimate of expected option renewal periods. Operating lease expense under the Company's ground and office leases was as follows, including straight-line rent expense and variable lease expenses such as CPI increases, percentage rent and reimbursements of landlord costs:


(in thousands)	December 31, 2021		December 31, 2020		December 31, 2019
Fixed operating lease expense
Ground leases	$	13,862		13,716		13,982
Office leases		4,309		4,334		4,229
Total fixed operating lease expense		18,171		18,050		18,211
Variable lease expense
Ground leases		1,032		1,044		1,693
Office leases		615		585		552
Total variable lease expense		1,647		1,629		2,245
Total lease expense	$	19,818		19,679		20,456
Cash paid for amounts included in the measurement of operating lease liabilities
Operating cash flows for operating leases	$	15,165		15,003		14,815

The following table summarizes the undiscounted future cash flows by year attributable to the operating lease liabilities for ground and office leases as of December 31, 2021, and provides a reconciliation to the Lease liability included in the accompanying Consolidated Balance Sheets:


(in thousands)	Lease Liabilities
For the year ended December 31,	Ground Leases			Office Leases			Total
2022	$	10,562			4,002			14,564
2023		10,775			3,323			14,098
2024		10,824			2,732			13,556
2025		10,827			2,561			13,388
2026		10,748			2,388			13,136
Thereafter		527,860			1,576			529,436
Total undiscounted lease liabilities	$	581,596			16,582			598,178
Present value discount		(381,062	)		(1,328	)		(382,390	)
Lease liabilities	$	200,534			15,254			215,788
Weighted average discount rate		5.2	%		3.4	%
Weighted average remaining term (in years)		47.7			4.8