Operating Leases (Tables)

6 Months Ended

Jun. 30, 2020

Lessee, Lease, Description [Line Items]

Lease, Cost [Table Text Block]

The following table summarizes rental revenue, including sublease arrangements, and lease costs, including impairment charges on operating lease right-of-use assets, for the three and six months ended June 30, 2020 and 2019 (in thousands):

		Three Months Ended June 30,				Six Months Ended June 30,
	Classification	2020		2019		2020		2019
Rental revenue
Operating leases (1)	Rental revenue	$	92,017	$	141,168	$	229,106	$	275,737
Sublease income - operating ground leases (2)	Rental revenue	$	5,514	$	5,835	$	3,468	$	11,558
Lease costs
Operating ground lease cost	Property operating expense	$	6,283	$	6,065	$	12,500	$	12,003
Operating office lease cost	General and administrative expense	$	226	$	226	$	452	$	456
Operating lease right-of-use asset impairment charges (3)	Impairment charges	$	15,009	$	—	$	15,009	$	—

Lessee, Operating Lease, Disclosure [Table Text Block]

Operating Leases

The Company’s real estate investments are leased under operating leases. As described in Note 2, the Company adopted Topic 842 on January 1, 2019 and elected to not reassess its prior conclusions about lease classification. Accordingly, these lease arrangements continue to be classified as operating leases. In addition to its lessor arrangements on its real estate investments, as of June 30, 2020 and December 31, 2019, the Company was lessee in 58 operating ground leases, as well as lessee in an operating lease of its executive office. The Company's tenants, who are generally sub-tenants under these ground leases, are responsible for paying the rent under these ground leases. In the event the tenant fails to pay the ground lease rent, the Company would be primarily responsible for the payment, assuming the Company does not sell or re-tenant the property.

The following table summarizes rental revenue, including sublease arrangements, and lease costs, including impairment charges on operating lease right-of-use assets, for the three and six months ended June 30, 2020 and 2019 (in thousands):

		Three Months Ended June 30,				Six Months Ended June 30,
	Classification	2020		2019		2020		2019
Rental revenue
Operating leases (1)	Rental revenue	$	92,017	$	141,168	$	229,106	$	275,737
Sublease income - operating ground leases (2)	Rental revenue	$	5,514	$	5,835	$	3,468	$	11,558
Lease costs
Operating ground lease cost	Property operating expense	$	6,283	$	6,065	$	12,500	$	12,003
Operating office lease cost	General and administrative expense	$	226	$	226	$	452	$	456
Operating lease right-of-use asset impairment charges (3)	Impairment charges	$	15,009	$	—	$	15,009	$	—

(1) During the three and six months ended June 30, 2020, the Company wrote-off straight-line receivables of $0.5 million and $5.0 million, respectively, to straight-line rental revenue classified in rental revenue in the accompanying consolidated statements of (loss) income and comprehensive (loss) income.

(2) During the six months ended June 30, 2020, the Company wrote-off sub-lessor ground lease straight-line receivables of $8.0 million to straight-line rental revenue classified in rental revenue in the accompanying consolidated statements of (loss) income and comprehensive (loss) income.

(3) During the three and six months ended June 30, 2020, the Company recognized impairment charges of $15.0 million related to the operating lease right-of-use assets at two of its properties. See Note 4 for the details on these impairments.

Substantially all the Company's customers' operations were temporarily closed for a portion of or all of the three months ended June 30, 2020 as a result of the COVID-19 pandemic. Certain of these customers' operations remain closed, while others have implemented re-opening plans. In response, the Company has agreed to defer rent for a substantial portion of its customers. In reliance upon a FASB Staff Q&A, the Company intends to not treat qualifying deferrals or rent concessions during the period effected by the COVID-19 pandemic as lease modifications. While deferments for this and future periods delay rent payments, these deferments generally do not release customers from the obligation to pay the deferred amounts in the future. Deferred rent amounts will be reflected in the Company's financial statements as accounts receivable if collection is determined to be probable or will be recognized when received as variable lease payments if collection is determined to not be probable. In limited cases, customers may be entitled to the abatement of rent during governmentally imposed prohibitions on business operations which is recognized in the period to which it relates, or the Company may provide rent concessions to tenants. In cases where the Company provides concessions to tenants to which they are not otherwise entitled, those amounts will be recognized in the period in which the concession is granted unless the changes are accounted for as lease modifications. The Company will continue to evaluate the impacts of COVID-19 on the Company's lease receivables and related accounting processes.