Leases

9 Months Ended

Sep. 30, 2022

Leases

Leases

9. Leases

As of both September 30, 2022 and December 31, 2021, the Company had operating leases for ground, office, equipment and airspace leases with maturity dates ranging from 2024 through 2097, excluding renewal options. Including renewal options available to the Company, the lease maturity date extends to 2147.

Operating leases were included on the Company’s consolidated balance sheets as follows (in thousands):

	September 30,			December 31,
	2022			2021
	(unaudited)
Right-of-use assets, net	$	17,866		$	23,161
Accounts payable and accrued expenses	$	5,678		$	5,586
Lease obligations, less current portion		18,349			25,120
Total lease obligations	$	24,027		$	30,706
Weighted average remaining lease term		33 years
Weighted average discount rate		5.0	%

As of December 31, 2021, the Company had an operating lease related to certain office and parking space at the Hilton Garden Inn Chicago Downtown/Magnificent Mile. Upon the hotel’s sale in March 2022 (see Note 4), the Company was no longer obligated under the operating lease and the related $2.3 million right-of-use asset, net and $2.6 million lease obligation were removed from the Company’s consolidated balance sheet.

As of December 31, 2021, the Company also had a finance lease related to the building occupied by the Hyatt Centric Chicago Magnificent Mile. The related lease obligation and right-of-use asset, net were classified as held for sale on the accompanying consolidated balance sheet as of December 31, 2021. Upon the hotel’s sale in February 2022 (see Note 4), the Company was no longer

obligated under the building lease and the related $44.7 million right-of-use asset, net and $15.6 million finance lease obligation were removed from the Company’s consolidated balance sheet.

The components of lease expense were as follows (unaudited and in thousands):

	Three Months Ended September 30,				Nine Months Ended September 30,
	2022		2021		2022		2021
Finance lease cost (1):
Amortization of right-of-use asset	$	—	$	368	$	—	$	1,103
Interest on lease obligation		—		351		117		1,053
Operating lease cost		1,325		1,382		4,041		4,068
Variable lease cost (2)		2,241		—		5,100		13
Total lease cost	$	3,566	$	2,101	$	9,258	$	6,237

(1) Finance lease cost for the nine months ended September 30, 2022 and the three and nine months ended September 30, 2021 included expenses for the Hyatt Centric Chicago Magnificent Mile’s finance lease obligation before the hotel’s sale in February 2022 (see Note 4).

(2) Several of the Company’s hotels pay percentage rent, which is calculated on operating revenues above certain thresholds.