Leases

12 Months Ended

Dec. 31, 2023

Leases

Leases

8. Leases

Leases as a Lessee:

The Company entered into a noncancelable contract with a third party to obtain office space that commenced on September 1, 2010. The contract was amended on October 25, 2016 to extend the contract through September 30, 2024. As of December 31, 2023, the Company’s right-of-use asset was $0.3 million, which is included in prepaid and other assets on the consolidated balance sheet as of December 31, 2023. A discount rate equal to the Company’s incremental borrowing rate was applied to the future monthly contractual lease payments remaining as of December 31, 2023 to compute the lease liability. The incremental borrowing rate is the rate equal to the closest borrowing under the BofA Revolver at the time of the Company’s adoption of ASU 2016-02.

Lease Costs
		For the Year Ended December 31,
(in thousands)		2023		2022		2021
Operating lease cost	$	419	$	419	$	419
	$	419	$	419	$	419
Other information
Cash paid for amounts included in the measurement of lease liabilities	$	447	$	438	$	429
Weighted average remaining lease terms in years - operating leases		0.75		1.75		2.75
Weighted average discount rate - operating leases		3.86%		3.86%		3.86%
Maturity analysis for liabilities	Total
	Undiscounted
(in thousands)	Cash Flows
Discount rate at commencement		3.86%
2024	$	340
	$	340
Present value lease liability	$	334
Difference between undiscounted cash flows and discounted cash flows	$	6

Leases as a Lessor:

The Company is a lessor of commercial real estate with operations that include the leasing of office and industrial properties. Many of the leases with customers contain options to extend leases at a fair market rate and may also include options to terminate leases. The Company considers several inputs when evaluating the amount it expects to derive from its leased assets at the end of the lease terms, such as the remaining useful life, expected market conditions, fair value of lease payments, expected fair values of underlying assets, and expected deployment of the underlying assets. The Company’s strategy to address its risk for the residual value in its commercial real estate is to re-lease the commercial space.

The Company has elected to apply the practical expedient to not separate non-lease components from the related lease component of real estate leases. This combined component is primarily comprised of fixed lease payments, early termination fees, common area maintenance cost reimbursements, and parking lease payments. The Company applies ASC 842, Leases, to the combined lease and non-lease components.

For the years ended December 31, 2023, 2022 and 2021, the Company recognized the following amounts of income relating to lease payments:

Income relating to lease payments:
	For the Year Ended December 31,
(in thousands)	2023		2022		2021
Income from leases (1)	$	146,027	$	157,719	$	203,530
	$	146,027	$	157,719	$	203,530
Undiscounted Cash Flows	Year ending
(in thousands)	December 31,
2024		86,936
2025		78,662
2026		70,489
2027		60,660
2028		54,527
2029 and thereafter		162,594
	$	513,868
(1) Includes amounts recognized from variable lease payments of $42,311, $49,730 and $54,825 for the years ended December 31, 2023, 2022 and 2021, respectively.