Leases

6 Months Ended

Jun. 30, 2023

Leases

Leases

8. Leases

As of both June 30, 2023 and December 31, 2022, 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):

	June 30,			December 31,
	2023			2022
	(unaudited)
Right-of-use assets, net	$	14,999		$	15,025
Accounts payable and accrued expenses	$	4,745		$	4,652
Lease obligations, less current portion		14,267			14,360
Total lease obligations	$	19,012		$	19,012
Weighted average remaining lease term		33 years
Weighted average discount rate		5.3	%

In January 2023, the Company relocated its corporate headquarters and recognized a $2.2 million operating lease right-of-use asset and related lease obligation.

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

	Three Months Ended June 30,				Six Months Ended June 30,
	2023		2022		2023		2022
Finance lease cost (1):
Interest on lease obligation	$	—	$	—	$	—	$	117
Operating lease cost		1,349		1,327		2,708		2,716
Variable lease cost (2)		2,197		1,978		4,283		2,859
Sublease income (3)		(297)		—		(594)		—
Total lease cost	$	3,249	$	3,305	$	6,397	$	5,692

(1) Finance lease cost for the three months ended June 30, 2022 included expenses for the Hyatt Centric Chicago Magnificent Mile’s finance lease obligation before the hotel’s sale in February 2022.

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

(3) During the fourth quarter of 2022, the Company entered into a sublease agreement on its previous corporate headquarters, which became effective in January 2023. Sublease income is included in corporate overhead in the accompanying consolidated statement of operations for the three and six months ended June 30, 2023.