Leases

9 Months Ended

Sep. 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 September 30, 2024 and December 31, 2023 were as follows:

	Classification	September 30, 2024		December 31, 2023
		(in thousands)
Operating Leases
Operating lease right-of-use assets	Right-of-use assets	$	458,785	$	312,588
Operating lease liabilities	Lease liabilities	529,513		357,623
Finance Leases
Property and equipment, gross	Right-of-use assets	18,503		18,975
Amortization of right-of-use assets	Right-of-use assets	(10,243)		(7,797)
Property and equipment, net		8,260		11,178
Finance lease liabilities	Lease liabilities	8,343		11,394

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

		Three Months Ended September 30,				Nine Months Ended September 30,
	Classification	2024		2023		2024		2023
		(in thousands)
Operating lease cost	General and administrative	$	32,154	$	23,611	$	87,674	$	70,895
Financing lease cost:
Amortization of right-of-use assets	General and administrative	1,141		1,248		3,240		3,527
Interest on lease liabilities	Interest expense	85		96		245		249
Total finance lease cost		1,226		1,344		3,485		3,776
Variable lease cost (1)	General and administrative	12,563		9,445		32,453		25,744
Sublease income	General and administrative	(7,938)		(8,300)		(24,407)		(25,301)
Net lease cost		$	38,005	$	26,100	$	99,205	$	75,114

(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 nine months ended September 30, 2024)	$	24,944	$	958	$	25,902
2025	63,080		4,056		67,136
2026	61,726		2,623		64,349
2027	58,975		926		59,901
2028	52,564		142		52,706
Thereafter	465,098		—		465,098
Total lease payments	726,387		8,705		735,092
Less interest	(196,874)		(362)
Present value of lease liabilities	$	529,513	$	8,343

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. During the three months ended September 30, 2024, due to our early exit from our previous New York office location, we recorded approximately $12.3 million of expense in general and administrative expense in the condensed consolidated statements of income.

Lease term and discount rate:
Weighted average remaining lease term (years):
Operating leases	13.25
Finance leases	2.37
Weighted average discount rate:
Operating leases	4.4	%
Finance leases	3.4	%

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

	Nine Months Ended September 30,
	2024	2023
	(in thousands)
Right-of-use assets obtained in exchange for lease obligations(1):
Operating leases	214,349	32,867
Finance leases	—	3,516

(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 September 30, 2024 and December 31, 2023 were as follows:

	Classification	September 30, 2024		December 31, 2023
		(in thousands)
Operating Leases
Operating lease right-of-use assets	Right-of-use assets	$	458,785	$	312,588
Operating lease liabilities	Lease liabilities	529,513		357,623
Finance Leases
Property and equipment, gross	Right-of-use assets	18,503		18,975
Amortization of right-of-use assets	Right-of-use assets	(10,243)		(7,797)
Property and equipment, net		8,260		11,178
Finance lease liabilities	Lease liabilities	8,343		11,394

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

		Three Months Ended September 30,				Nine Months Ended September 30,
	Classification	2024		2023		2024		2023
		(in thousands)
Operating lease cost	General and administrative	$	32,154	$	23,611	$	87,674	$	70,895
Financing lease cost:
Amortization of right-of-use assets	General and administrative	1,141		1,248		3,240		3,527
Interest on lease liabilities	Interest expense	85		96		245		249
Total finance lease cost		1,226		1,344		3,485		3,776
Variable lease cost (1)	General and administrative	12,563		9,445		32,453		25,744
Sublease income	General and administrative	(7,938)		(8,300)		(24,407)		(25,301)
Net lease cost		$	38,005	$	26,100	$	99,205	$	75,114

(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 nine months ended September 30, 2024)	$	24,944	$	958	$	25,902
2025	63,080		4,056		67,136
2026	61,726		2,623		64,349
2027	58,975		926		59,901
2028	52,564		142		52,706
Thereafter	465,098		—		465,098
Total lease payments	726,387		8,705		735,092
Less interest	(196,874)		(362)
Present value of lease liabilities	$	529,513	$	8,343

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. During the three months ended September 30, 2024, due to our early exit from our previous New York office location, we recorded approximately $12.3 million of expense in general and administrative expense in the condensed consolidated statements of income.

Lease term and discount rate:
Weighted average remaining lease term (years):
Operating leases	13.25
Finance leases	2.37
Weighted average discount rate:
Operating leases	4.4	%
Finance leases	3.4	%

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

	Nine Months Ended September 30,
	2024	2023
	(in thousands)
Right-of-use assets obtained in exchange for lease obligations(1):
Operating leases	214,349	32,867
Finance leases	—	3,516

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