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Leases
 3 Months Ended
Mar. 31, 2025
Leases [Abstract]  
Leases Leases
Lessor Accounting
The Company’s properties generally are leased pursuant to non-cancelable, fixed-term operating leases with expiration dates through 2052. Some leases provide tenants with fixed rent renewal terms while others have market rent renewal terms. Some leases provide the lessee, during the term of the lease, with an option or right of first refusal to purchase the leased property. The Company’s single-tenant net leases generally require the lessee to pay minimum rent and all taxes (including property tax), insurance, maintenance and other operating costs associated with the leased property.
The Company's leases typically have escalators that are either based on a stated percentage or an index such as the Consumer Price Index ("CPI"). In addition, most of the Company's leases include non-lease components, such as reimbursement of operating expenses as additional rent, or include the reimbursement of expected operating expenses as part of the lease payment. The Company adopted an accounting policy to combine lease and non-lease components. Rent escalators based on indices and reimbursements of operating expenses that are not included in the lease rate are considered variable lease payments. Variable payments are recognized in the period earned. Lease income for the Company's operating leases, recognized for the three months ended March 31, 2025 and 2024, was $288.9 million and $318.1 million, respectively.
Future lease payments under the non-cancelable operating leases, excluding any reimbursements and one sales-type lease, as of March 31, 2025, were as follows:
Dollars in thousandsOPERATING
2025$616,105 
2026765,801 
2027652,094 
2028539,161 
2029433,875 
2030 and thereafter1,592,445 
$4,599,481 
Lessee Accounting
The Company has obligations, as the lessee, under operating lease agreements consisting primarily of the Company’s ground leases. As of March 31, 2025, the Company had 215 ground leases associated with properties covering 16.1 million square feet. Some of the Company's ground lease renewal terms are based on fixed rent renewal terms, and others have market rent renewal terms. These ground leases typically have initial terms of 40 to 99 years with expiration dates through 2119. Any rental increases related to the Company’s ground leases are generally stated in the lease or based on CPI. The Company had 73 prepaid ground leases as of March 31, 2025. The amortization of the prepaid rent, included in the operating lease right-of-use asset, represented approximately $0.3 million of the Company's rental expense for each of the three months ended March 31, 2025 and 2024.
The Company’s future lease payments (primarily for its 142 non-prepaid ground leases) as of March 31, 2025, were as follows:
Dollars in thousandsOPERATINGFINANCING
2025$8,886 $1,440 
202612,540 2,106 
202712,743 2,145 
202812,879 2,177 
202912,944 2,209 
2030 and thereafter657,744 383,172 
Total undiscounted lease payments717,736 393,249 
Discount(493,619)(320,664)
Lease liabilities$224,117 $72,585 
The following table provides details of the Company's total lease expense for the three months ended March 31, 2025 and 2024:
THREE MONTHS ENDED
March 31,
Dollars in thousands20252024
Operating lease cost
Operating lease expense$4,358 $4,465 
Variable lease expense1,328 1,228 
Finance lease cost
Amortization of right-of-use assets370 387 
Interest on lease liabilities916 937 
Total lease expense$6,972 $7,017 
Other information
Operating cash flows outflows related to operating leases$4,492 $4,040 
Operating cash flows outflows related to financing leases$543 $563 
Financing cash flows outflows related to financing leases$134 $110 
Weighted-average years remaining lease term (excluding renewal options) - operating leases44.045.8
Weighted-average years remaining lease term (excluding renewal options) - finance leases57.557.7
Weighted-average discount rate - operating leases5.7 %5.7 %
Weighted-average discount rate - finance leases5.0 %5.0 %
Leases Leases
Lessor Accounting
The Company’s properties generally are leased pursuant to non-cancelable, fixed-term operating leases with expiration dates through 2052. Some leases provide tenants with fixed rent renewal terms while others have market rent renewal terms. Some leases provide the lessee, during the term of the lease, with an option or right of first refusal to purchase the leased property. The Company’s single-tenant net leases generally require the lessee to pay minimum rent and all taxes (including property tax), insurance, maintenance and other operating costs associated with the leased property.
The Company's leases typically have escalators that are either based on a stated percentage or an index such as the Consumer Price Index ("CPI"). In addition, most of the Company's leases include non-lease components, such as reimbursement of operating expenses as additional rent, or include the reimbursement of expected operating expenses as part of the lease payment. The Company adopted an accounting policy to combine lease and non-lease components. Rent escalators based on indices and reimbursements of operating expenses that are not included in the lease rate are considered variable lease payments. Variable payments are recognized in the period earned. Lease income for the Company's operating leases, recognized for the three months ended March 31, 2025 and 2024, was $288.9 million and $318.1 million, respectively.
Future lease payments under the non-cancelable operating leases, excluding any reimbursements and one sales-type lease, as of March 31, 2025, were as follows:
Dollars in thousandsOPERATING
2025$616,105 
2026765,801 
2027652,094 
2028539,161 
2029433,875 
2030 and thereafter1,592,445 
$4,599,481 
Lessee Accounting
The Company has obligations, as the lessee, under operating lease agreements consisting primarily of the Company’s ground leases. As of March 31, 2025, the Company had 215 ground leases associated with properties covering 16.1 million square feet. Some of the Company's ground lease renewal terms are based on fixed rent renewal terms, and others have market rent renewal terms. These ground leases typically have initial terms of 40 to 99 years with expiration dates through 2119. Any rental increases related to the Company’s ground leases are generally stated in the lease or based on CPI. The Company had 73 prepaid ground leases as of March 31, 2025. The amortization of the prepaid rent, included in the operating lease right-of-use asset, represented approximately $0.3 million of the Company's rental expense for each of the three months ended March 31, 2025 and 2024.
The Company’s future lease payments (primarily for its 142 non-prepaid ground leases) as of March 31, 2025, were as follows:
Dollars in thousandsOPERATINGFINANCING
2025$8,886 $1,440 
202612,540 2,106 
202712,743 2,145 
202812,879 2,177 
202912,944 2,209 
2030 and thereafter657,744 383,172 
Total undiscounted lease payments717,736 393,249 
Discount(493,619)(320,664)
Lease liabilities$224,117 $72,585 
The following table provides details of the Company's total lease expense for the three months ended March 31, 2025 and 2024:
THREE MONTHS ENDED
March 31,
Dollars in thousands20252024
Operating lease cost
Operating lease expense$4,358 $4,465 
Variable lease expense1,328 1,228 
Finance lease cost
Amortization of right-of-use assets370 387 
Interest on lease liabilities916 937 
Total lease expense$6,972 $7,017 
Other information
Operating cash flows outflows related to operating leases$4,492 $4,040 
Operating cash flows outflows related to financing leases$543 $563 
Financing cash flows outflows related to financing leases$134 $110 
Weighted-average years remaining lease term (excluding renewal options) - operating leases44.045.8
Weighted-average years remaining lease term (excluding renewal options) - finance leases57.557.7
Weighted-average discount rate - operating leases5.7 %5.7 %
Weighted-average discount rate - finance leases5.0 %5.0 %