Leases

12 Months Ended

Dec. 31, 2022

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 Topic 842:


(in thousands)	December 31, 2022		December 31, 2021		December 31, 2020
Operating lease income
Fixed and in-substance fixed lease income	$	851,409		797,502		807,603
Variable lease income		287,149		262,619		247,384
Other lease related income, net:
Above/below market rent and tenant rent inducement amortization, net		22,543		24,539		42,219
Uncollectible straight-line rent (1)		12,510		5,227		(34,673	)
Uncollectible amounts billable in lease income (1)		13,841		23,481		(82,367	)
Total lease income	$	1,187,452		1,113,368		980,166

(1)

During the years ended December 31, 2022 and 2021, the Company had improved rent collections following lifting of pandemic-related restrictions which resulted in more favorable income than 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, 2022
2023	$	850,211
2024		768,797
2025		657,870
2026		552,735
2027		440,844
Thereafter		1,579,740
Total	$	4,850,197

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 19 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, 2022		December 31, 2021		December 31, 2020
Fixed operating lease expense
Ground leases	$	13,759		13,862		13,716
Office leases		4,162		4,309		4,334
Total fixed operating lease expense		17,921		18,171		18,050
Variable lease expense
Ground leases		1,591		1,032		1,044
Office leases		611		615		585
Total variable lease expense		2,202		1,647		1,629
Total lease expense	$	20,123		19,818		19,679
Cash paid for amounts included in the measurement of operating lease liabilities
Operating cash flows for operating leases	$	14,656		15,165		15,003

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, 2022, 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
2023	$	10,750			4,046			14,796
2024		10,799			3,082			13,881
2025		10,801			2,880			13,681
2026		10,722			2,715			13,437
2027		10,722			1,517			12,239
Thereafter		516,564			741			517,305
Total undiscounted lease liabilities	$	570,358			14,981			585,339
Present value discount		(370,486	)		(1,131	)		(371,617	)
Lease liabilities	$	199,872			13,850			213,722
Weighted average discount rate		5.2	%		3.6	%
Weighted average remaining term (in years)		46.8			4.4