Leases

6 Months Ended

Jun. 30, 2024

Leases [Abstract]

Leases

Leases

We lease office space, furniture and office equipment under various operating and financing leases. Our current leases have initial lease terms of one year to 20 years, some of which include options to extend the leases for up to five years, and some of which include options to terminate the leases within one year.

Leases included in the condensed consolidated statement of financial condition as of June 30, 2024 and December 31, 2023 were as follows:

	Classification	June 30, 2024		December 31, 2023
		(in thousands)
Operating Leases
Operating lease right-of-use assets	Right-of-use assets	$	481,336	$	312,588
Operating lease liabilities	Lease liabilities	546,961		357,623
Finance Leases
Property and equipment, gross	Right-of-use assets	18,725		18,975
Amortization of right-of-use assets	Right-of-use assets	(9,651)		(7,797)
Property and equipment, net		9,074		11,178
Finance lease liabilities	Lease liabilities	9,031		11,394

The components of lease expense included in the condensed consolidated statement of income as of June 30, 2024 and June 30, 2023 were as follows:

		Three Months Ended June 30,				Six Months Ended June 30,
	Classification	2024		2023		2024		2023
		(in thousands)
Operating lease cost	General and administrative	$	27,584	$	24,120	$	55,520	$	47,284
Financing lease cost:
Amortization of right-of-use assets	General and administrative	1,047		1,203		2,099		2,279
Interest on lease liabilities	Interest expense	76		88		160		153
Total finance lease cost		1,123		1,291		2,259		2,432
Variable lease cost (1)	General and administrative	10,280		7,432		19,890		16,299
Sublease income	General and administrative	(8,746)		(8,741)		(16,469)		(17,001)
Net lease cost		$	30,241	$	24,102	$	61,200	$	49,014

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

The sub-lease 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 were as follows:

	Operating Leases		Financing Leases		Total
Year ending December 31,	(in thousands)
2024 (excluding the six months ended June 30, 2024)	$	52,076	$	1,927	$	54,003
2025	61,864		4,050		65,914
2026	60,648		2,617		63,265
2027	58,144		922		59,066
2028	52,050		142		52,192
Thereafter	464,114		—		464,114
Total lease payments	748,896		9,658		758,554
Less interest	(201,935)		(627)
Present value of lease liabilities	$	546,961	$	9,031

We have signed a lease that commenced during the first quarter of 2024, relating to approximately 166,000 square feet of space in New York City.

Lease term and discount rate:
Weighted average remaining lease term (years):
Operating leases	13.03
Finance leases	2.55
Weighted average discount rate:
Operating leases	4.3	%
Finance leases	3.4	%

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

	Six Months Ended June 30,
	2024	2023
	(in thousands)
Right-of-use assets obtained in exchange for lease obligations(1):
Operating leases	213,235	28,827
Finance leases	—	2,096

(1) Represents non-cash activity and, accordingly, is not reflected in the condensed consolidated statement of cash flows.

Leases

Leases

We lease office space, furniture and office equipment under various operating and financing leases. Our current leases have initial lease terms of one year to 20 years, some of which include options to extend the leases for up to five years, and some of which include options to terminate the leases within one year.

Leases included in the condensed consolidated statement of financial condition as of June 30, 2024 and December 31, 2023 were as follows:

	Classification	June 30, 2024		December 31, 2023
		(in thousands)
Operating Leases
Operating lease right-of-use assets	Right-of-use assets	$	481,336	$	312,588
Operating lease liabilities	Lease liabilities	546,961		357,623
Finance Leases
Property and equipment, gross	Right-of-use assets	18,725		18,975
Amortization of right-of-use assets	Right-of-use assets	(9,651)		(7,797)
Property and equipment, net		9,074		11,178
Finance lease liabilities	Lease liabilities	9,031		11,394

The components of lease expense included in the condensed consolidated statement of income as of June 30, 2024 and June 30, 2023 were as follows:

		Three Months Ended June 30,				Six Months Ended June 30,
	Classification	2024		2023		2024		2023
		(in thousands)
Operating lease cost	General and administrative	$	27,584	$	24,120	$	55,520	$	47,284
Financing lease cost:
Amortization of right-of-use assets	General and administrative	1,047		1,203		2,099		2,279
Interest on lease liabilities	Interest expense	76		88		160		153
Total finance lease cost		1,123		1,291		2,259		2,432
Variable lease cost (1)	General and administrative	10,280		7,432		19,890		16,299
Sublease income	General and administrative	(8,746)		(8,741)		(16,469)		(17,001)
Net lease cost		$	30,241	$	24,102	$	61,200	$	49,014

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

The sub-lease 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 were as follows:

	Operating Leases		Financing Leases		Total
Year ending December 31,	(in thousands)
2024 (excluding the six months ended June 30, 2024)	$	52,076	$	1,927	$	54,003
2025	61,864		4,050		65,914
2026	60,648		2,617		63,265
2027	58,144		922		59,066
2028	52,050		142		52,192
Thereafter	464,114		—		464,114
Total lease payments	748,896		9,658		758,554
Less interest	(201,935)		(627)
Present value of lease liabilities	$	546,961	$	9,031

We have signed a lease that commenced during the first quarter of 2024, relating to approximately 166,000 square feet of space in New York City.

Lease term and discount rate:
Weighted average remaining lease term (years):
Operating leases	13.03
Finance leases	2.55
Weighted average discount rate:
Operating leases	4.3	%
Finance leases	3.4	%

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

	Six Months Ended June 30,
	2024	2023
	(in thousands)
Right-of-use assets obtained in exchange for lease obligations(1):
Operating leases	213,235	28,827
Finance leases	—	2,096

(1) Represents non-cash activity and, accordingly, is not reflected in the condensed consolidated statement of cash flows.