Lease Agreements - Company as Lessee

12 Months Ended

Dec. 31, 2020

As of December 31, 2020, the Company is a lessee of corporate office space, ground leases and a parking lease associated with various consolidated properties, and equipment. Lease terms for the Company's office leases, in general, range between 5 to 10 years while ground leases and the parking lease have terms typically ranging from 20 to 85 years. The corporate office leases occasionally contain renewal options of approximately five years while certain ground leases contain renewal options that can extend the lease term from approximately 10 to 39 years.

A majority of the Company’s ground leases and the parking lease are subject to changes in the Consumer Price Index ("CPI"). Furthermore, certain of the Company’s ground leases include rental payments based on a percentage of gross or net income. While lease liabilities are not remeasured as a result of changes in the CPI or percentage of gross or net income, such changes are treated as variable lease payments and recognized in the period in which the obligation for those payments was incurred.

The Company’s lease agreements do not contain any residual value guarantees or restrictive covenants.

Operating lease right-of-use assets and operating lease liabilities are recognized based on the present value of lease payments over the lease term at commencement date. Because most of the Company’s leases do not provide an implicit rate, the Company uses its incremental borrowing rate based on the information available at commencement date in determining the present value of lease payments.

As of December 31, 2020 and 2019, the Company had no material finance leases.

Supplemental consolidated balance sheet information related to leases as of December 31, 2020 and 2019 is as follows ($ in thousands):


	Classification	December 31, 2020		December 31, 2019
Assets
Operating lease right-of-use assets	Operating lease right-of-use assets	$	72,143	$	74,744

Total leased assets		$	72,143	$	74,744

Liabilities
Operating lease liabilities	Operating lease liabilities	74,037		76,740

Total lease liabilities		$	74,037	$	76,740

The components of lease expense for the years ended December 31, 2020 and 2019 were as follows ($ in thousands):


	December 31, 2020		December 31, 2019
Operating lease cost	$	6,749	$	6,745
Variable lease cost	1,436		783



Short-term lease cost	432		610
Sublease income	(438)		(436)
Total lease cost	$	8,179	$	7,702

A maturity analysis of lease liabilities as of December 31, 2020 is as follows ($ in thousands):


	Operating Leases
2021	$	6,963
2022	6,987
2023	6,962
2024	6,690
2025	6,310
Thereafter	140,417
Total lease payments	$	174,329
Less: Imputed interest	(100,292)
Present value of lease liabilities	$	74,037

Lease term and discount rate information for leases at December 31, 2020 and 2019 are as follows:


	December 31, 2020		December 31, 2019
Weighted-average of remaining lease terms (years)
Operating Leases	39		39

Weighted-average of discount rates
Operating Leases	5.00	%	4.99	%

Practical Expedients

As part of the transition to ASC Topic 842, the Company elected to use the modified retrospective transition method with the new standard being applied as of the January 1, 2019 adoption date. Additionally, the Company has elected, as of the adoption date, not to reassess whether expired or existing contracts contain leases under the new definition of a lease, not to reassess the lease classification for expired or existing leases, not to reassess whether previously capitalized initial direct costs would qualify for capitalization under ASC Topic 842, and not to reassess whether existing or expired land easements meet the definition of a lease.

Leases with an initial term of 12 months or less are not recorded on the balance sheet. The Company recognizes the lease expense for such leases on a straight-line basis over the lease term.

The Company has elected to account for lease components (e.g., fixed payments including rent) and non-lease components (e.g., common-area maintenance costs) as a single combined lease component as the lease components are the predominant elements of the combined components.