Note 10 — Commitments and Contingencies

Future Minimum Lease Payments

The Company entered into operating and capital lease agreements primarily related to certain acquisitions under leasehold interest arrangements. The following table reflects the minimum base cash payments due from the Company over the next five years and thereafter under these arrangements, including the present value of the net minimum payments due under capital leases. These amounts exclude contingent rent payments, as applicable, that may be payable based on provisions related to increases in annual rent based on exceeding certain economic indexes among other items.



	Future Minimum Base Rent Payments
(In thousands)	Operating Leases		Capital Leases
April 1, 2016 - December 31, 2016	$	3,716	$	65
2017	4,905		86
2018	5,089		86
2019	5,346		86
2020	5,346		86
Thereafter	246,281		3,404
Total minimum lease payments	$	270,683	$	3,813
Less: amounts representing interest			(1,706		)
Total present value of minimum lease payments			$	2,107

Total rental expense related to operating leases was $1.9 million for the three months ended March 31, 2016 and 2015. During the three months ended March 31, 2016 and 2015, interest expense related to capital leases was approximately $16,000. The following table discloses assets recorded under capital leases and the accumulated amortization thereon as of March 31, 2016 and December 31, 2015.



(In thousands)	March 31, 2016			December 31, 2015
Buildings, fixtures and improvements	$	11,783		$	11,783
Less accumulated depreciation and amortization	(1,847		)	(1,705		)
Total real estate investments, net	$	9,936		$	10,078

Litigation and Regulatory Matters

In the ordinary course of business, the Company may become subject to litigation, claims and regulatory matters. There are no legal or regulatory proceedings pending or known to be contemplated against the Company from which the Company expects to incur a material loss.

RXR Realty (“RXR”) initiated a suit against the Company alleging that it suffered “lost profits” in connection with the Company’s purchase of its 48.9% interest in Worldwide Plaza in October 2013. On August 12, 2014, the Supreme Court of the State of New York dismissed all of RXR’s claims against the seller of Worldwide Plaza and dismissed RXR’s disgorgement claims against the Company, permitting only a limited, immaterial claim against the Company for RXR’s cost of producing due diligence-related material to proceed. RXR appealed the ruling and, on October 13, 2015, the appellate court upheld the previous decisions; however, the appellate court held that the trial court's exclusion of lost profit damages was premature and would have to be considered through a motion for summary judgment. The Company moved for partial summary judgment to reinstate the damages limitation, and the trial court granted the motion at oral argument on March 24, 2016. RXR is expected to appeal. The Company has not recognized a liability with respect to RXR's claim because the Company does not believe that it is probable that it will incur a related material loss.

Environmental Matters

In connection with the ownership and operation of real estate, the Company may potentially be liable for costs and damages related to environmental matters. The Company maintains environmental insurance for its properties that provides coverage for potential environmental liabilities, subject to the policy's coverage conditions and limitations. The Company has not been notified by any governmental authority of any non-compliance, liability or other claim, and is not aware of any other environmental condition that it believes will have a material adverse effect on the consolidated results of operations.