Commitments and Contingencies

6 Months Ended

Jun. 30, 2019

Commitments and Contingencies Disclosure [Abstract]

Legal Proceedings

As of June 30, 2019, the Company and the Operating Partnership were not involved in any material litigation nor, to management's knowledge, was any material litigation threatened against us or our portfolio which if adversely determined could have a material adverse impact on us.

Environmental Matters

Our management believes that the properties are in compliance in all material respects with applicable Federal, state and local ordinances and regulations regarding environmental issues. Management is not aware of any environmental liability that it believes would have a materially adverse impact on our financial position, results of operations or cash flows. Management is unaware of any instances in which it would incur significant environmental cost if any of our properties were sold.

Ground Lease Arrangements

We are a tenant under ground leases for certain properties. The leases range in term from three to 95 years, with certain leases offering extension options which we assess against relevant economic factors to determine whether we are reasonably certain of exercising or not exercising the option. Lease payments associated with renewal periods that we are reasonably certain will be exercised, if any, are included in the measurement of the corresponding lease liability and right of use asset.

The following is a schedule of future minimum lease payments under financing leases and operating leases with initial terms in excess of one year as of June 30, 2019 (in thousands):



	Financing leases			Operating leases ⁽¹⁾
Remaining 2019	$	1,218		$	15,576
2020	2,619			31,508
2021	2,794			31,702
2022	2,794			29,548
2023	2,794			27,243
2024	2,819			27,263
Thereafter	814,283			649,289
Total minimum lease payments	$	829,321		$	812,129
Amount representing interest	(785,287		)
Amount discounted using incremental borrowing rate				(424,527		)
Lease liabilities	$	44,034		$	387,602


(1)	As of June 30, 2019, the total minimum sublease rentals to be received in the future under non-cancelable subleases is $1.7 billion.

During the six months ended June 30, 2019, we recognized $2.2 million of financing lease costs, of which $1.6 million represented interest and $0.6 million represented amortization of the right-of-use assets. These amounts are included in interest expense, net of interest income and depreciation and amortization in our consolidated statements of operations, respectively. During the six months ended June 30, 2019, we recognized $16.6 million of operating lease costs, which is calculated on a straight-line basis over the remaining lease terms. This amount is included in operating lease rent in our consolidated statements of operations. As of June 30, 2019, the weighted-average discount rate used to calculate the lease liabilities was 8.46%. As of June 30, 2019, the weighted-average remaining lease term was 67 years.