Leases

9 Months Ended

Sep. 30, 2020

LEASES

Leases as Lessor

Lease income related to the Company’s operating leases is comprised of the following:


	Three Months Ended September 30,				Nine Months Ended September 30,
	2020		2019		2020		2019
Lease income related to fixed and variable lease payments
Base rent (a) (b)	$	83,871	$	89,754	$	264,974	$	267,823
Percentage and specialty rent (c)	488		610		1,812		2,612
Tenant recoveries (b) (c)	26,429		26,323		75,994		79,029
Lease termination fee income (c)	223		331		599		1,751
Other lease-related income (c)	1,232		1,560		3,781		4,446
Straight-line rental income, net (d)	(269)		581		(1,212)		2,697
Other
Uncollectible lease income, net (e)	(5,039)		(569)		(25,415)		(1,046)
Amortization of above and below market lease intangibles and lease inducements	423		1,127		2,323		3,557
Lease income	$	107,358	$	119,717	$	322,856	$	360,869

(a)Base rent primarily consists of fixed lease payments; however, it is partially offset by adjustments of $6,051 and $6,102 for the three and nine months ended September 30, 2020, respectively, related to executed lease concessions granted as relief due to COVID-19 and treated as negative variable lease adjustments to base rent in accordance with the Company’s policy elections related to the accounting treatment of such lease concessions.

(b)Base rent and tenant recoveries for the three and nine months ended September 30, 2020 are presented gross of any uncollected amounts related to cash-basis tenants. Such uncollected amounts are reflected within “Uncollectible lease income, net.”

(c)Represents lease income related to variable lease payments.

(d)Represents lease income related to fixed lease payments. Straight-line rental income, net includes changes in allowances for doubtful straight-line receivables of $(3,089) and $(710) for the three months ended September 30, 2020 and 2019, respectively, and $(5,760) and $(1,524) for the nine months ended September 30, 2020 and 2019, respectively.

(e)Uncollectible lease income, net is comprised of (i) uncollected amounts related to tenants being accounted for on the cash basis of accounting of $3,869 and $11,938 for the three and nine months ended September 30, 2020, respectively, (ii) a reserve, which includes the estimated impact for lease concession agreements that have not yet been executed of $4,517 for the three and nine months ended September 30, 2020, and other general reserve amounts, and (iii) the reclassification of amounts related to lease concession agreements that were executed during the current period and treated as negative variable lease adjustments, however were agreed in principle in the prior quarter of $(4,381) for the three months ended September 30, 2020.

During the second and third quarters of 2020, the Company agreed in principle, and, in certain circumstances, executed agreements, with tenants regarding lease concessions. The majority of these concessions are for the deferral of amounts billed, without an extension of the lease term and, as such, meet deferral accounting treatment. However, certain of these lease concessions do not meet deferral accounting treatment as they include abatement, a combination of deferral and abatement, are deferrals with a modest extension of the lease term, or provide a concession with the extension of the existing lease term. The majority of the amounts addressed by the lease concessions are base rent, although certain concessions also address tenant recoveries and other charges. As of September 30, 2020, the Company agreed in principle and, in certain circumstances, executed lease concessions to defer, without an extension of the lease term, $7,965 and $4,878 of previously uncollected base rent charges related to the second and third quarters of 2020, respectively, and to address an additional $6,965 and $3,028 of previously uncollected base rent charges related to the second and third quarters of 2020, respectively, through abatement, a combination of deferral and abatement or a concession with the extension of the lease term. As of September 30, 2020, the amounts that have been deferred to future periods under executed lease concessions, on a weighted average basis, are expected to be received starting approximately four months from September 30, 2020 and will be received over a period of approximately 11 months once started.

Subsequent to September 30, 2020, the Company agreed in principle and, in certain circumstances, executed agreements with additional tenants whereby it expects to address an additional $765 and $190 of previously uncollected base rent charges related to the second and third quarters of 2020, respectively. Furthermore, the Company agreed in principle and, in certain circumstances, executed agreements with tenants whereby it expects to address through lease concessions approximately $937 of base rent charges pertaining to future periods. The Company can make no assurances that the in-process lease amendments will ultimately be executed in the lease concession type being actively negotiated, or at all. Refer to Note 2 to the condensed consolidated financial statements for a discussion of the accounting treatment for lease concessions as a result of the COVID-19 pandemic.

The Company has not yet reached agreements, and in some cases does not anticipate reaching agreements, to defer or abate rent with certain tenants regarding concession requests, as discussions are ongoing. During the nine months ended September 30, 2020, the Company applied $2,999 of security deposits to previously uncollected accounts receivable.

Leases as Lessee

During the nine months ended September 30, 2020, the Company extended the term of one office lease resulting in an additional lease liability and right-of-use lease asset of $383.