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Leases

12 Months Ended

Dec. 31, 2023

We lease office space, office equipment and technology under various operating and financing leases. Our current leases have initial lease terms of one year to 15 years, some of which include options to extend the leases for up to seven years, and some of which include options to terminate the leases within one year.

Leases included in the consolidated statements of financial condition as of December 31, 2023 and 2022 were as follows:


	Classification	December 31, 2023			December 31, 2022
	(in thousands)
Operating Leases
Operating lease right-of-use assets	Right-of-use assets		$	312,588		$	360,092
Operating lease liabilities	Lease liabilities		357,623			415,539
Finance Leases
Property and equipment, gross	Right-of-use assets		18,975			18,116
Amortization of right-of-use assets	Right-of-use assets		(7,797)			(6,310)
Property and equipment, net			11,178			11,806
Finance lease liabilities	Lease liabilities		11,394			11,940

The components of lease expense included in the consolidated statements of income for the years ended December 31, 2023 and 2022 were as follows:


		Years Ended December 31
	Classification	2023			2022
		(in thousands)
Operating lease cost	General and administrative		$	94,784		$	97,198

Financing lease cost:
Amortization of right-of-use assets	General and administrative		4,779			3,860
Interest on lease liabilities	Interest expense		348			200
Total finance lease cost			5,127			4,060
Variable lease cost (1)	General and administrative		35,525			40,552
Sublease income	General and administrative		(33,577)			(34,420)
Net lease cost			$	101,859		$	107,390

(1)Variable lease expense includes operating expenses, real estate taxes and employee parking.

The sublease income represents all revenues received from sub-tenants. It is primarily fixed base rental payments combined with variable reimbursements such as operating expenses, real estate taxes and employee parking. The vast majority of sub-tenant income is derived from our New York metro sub-tenant agreements. Sub-tenant income related to base rent is recorded on a straight-line basis.

Maturities of lease liabilities are as follows:


	Operating Leases			Financing Leases			Total
Year ending December 31,	(in thousands)
2024		$	108,380		$	4,415		$	112,795
2025		42,695			3,985			46,680
2026		40,568			2,554			43,122
2027		37,973			881			38,854
2028		31,698			137			31,835
Thereafter		132,647			—			132,647
Total lease payments		393,961			11,972			$	405,933
Less interest		(36,338)			(578)
Present value of lease liabilities		$	357,623		$	11,394

We have signed a lease that commenced in 2024, relating to approximately 166,000 square feet of space in New York City. Our estimated total base rent obligation (excluding taxes, operating expenses and utilities) over the 20-year lease term is approximately $393.0 million.


Lease term and discount rate:
Weighted average remaining lease term (years):
Operating leases	7.34
Finance leases	2.97
Weighted average discount rate:
Operating leases	2.89	%
Finance leases	3.22	%

Supplemental non-cash activity related to leases are as follows:


	Years Ended December 31
	2023			2022
	(in thousands)




Right-of-use assets obtained in exchange for lease obligations(1):
Operating leases		$	32,407		$	38,875
Finance leases		4,106			7,791

(1)Represents

Leases