Leases

9 Months Ended

Aug. 31, 2020

Leases

Leases

8.     Leases

As lessor, all of Griffin’s leases with its tenants were classified as operating leases under previous guidance and remained operating leases upon the adoption of ASC 842, therefore, as a lessor there was no significant impact upon adoption. Griffin’s rental revenue reflects the leasing of industrial/warehouse and, to a lesser extent, office/flex space and certain land parcels. Griffin does not have any variable payment leases with its tenants.

The following is a schedule of minimum future cash rentals on tenant operating leases in effect as of August 31, 2020. The schedule does not reflect future rental revenues from the renewal or replacement of existing leases and excludes property operating expense reimbursements:

Balance of fiscal 2020	$	6,793
2021		26,925
2022		21,355
2023		17,990
2024		15,495
Later years		35,364
	$	123,922

In fiscal 2016, Griffin entered into a ten-year sublease (the “New York Office Lease”) for approximately 1,920 square feet in New York City for its executive offices. The sublease is with Bloomingdale Properties, Inc., an entity that is controlled by certain members of the Cullman and Ernst Group, which is considered a related party to Griffin.

Upon adoption of ASC 842 on December 1, 2019, Griffin, as lessee, recognized two ROU assets aggregating $858 and lease liabilities aggregating $858 for operating leases it had previously entered into, the New York Office Lease and a lease for office equipment. Griffin adopted the practical expedient for not separating lease components from non-lease components. ROU assets and lease liabilities are included in other assets and other liabilities, respectively, on Griffin’s consolidated balance sheet. ROU assets are evaluated for impairment in a manner consistent with the treatment of other long-lived assets. These lease agreements do not provide a readily determinable implicit rate nor is it available to Griffin from its lessors, therefore, Griffin utilized its incremental borrowing rate of 3.5% at the time of adoption in order to discount lease payments to present value. These lease agreements do not contain any significant residual value guarantees or restrictive covenants. The lease costs are allocated over the remaining lease terms on a straight-line basis. Expense related to operating leases was $104 in the 2020 nine month period. The weighted average remaining lease term for Griffin’s operating leases as of August 31, 2020, was 6.1 years.

Maturities of lease liabilities as of August 31, 2020 are as follows:

Balance of Fiscal 2020	$	34
Fiscal 2021		136
Fiscal 2022		143
Fiscal 2023		141
Fiscal 2024		140
Thereafter		269
Total undiscounted payments		863
Less: imputed interest		(88)
Present value of minimum lease payments	$	775