Leases (Lessee)

12 Months Ended

Dec. 31, 2023

11. Leases (Lessee)

We lease the land underlying certain of our facilities (for which we sublease to our tenants), along with corporate offices and equipment. Our leases have remaining lease terms that vary in years, and some of the leases have initial fixed terms (or renewal options available) that extend the leases up to, or just beyond, the depreciable life of the properties that occupy the leased land. Renewal options that we are reasonably certain to exercise are recognized in our right-of-use assets and lease liabilities. As most of our leases do not provide an implicit rate, we use our incremental borrowing rate based on the information available at lease commencement date in determining the present value of future payments.

The following is a summary of our lease expense (in thousands):


	Income Statement	For the Years Ended December 31,
	Classification	2023			2022			2021
Operating lease cost (1)	(2)	$	11,653		$	12,175		$	10,694
Finance lease cost:
Amortization of right-of-use assets	Real estate depreciation and amortization		51			51			51
Interest on lease liabilities	Interest		128			128			128
Sublease income	Other		(4,178	)		(4,485	)		(4,466	)
Total lease cost		$	7,654		$	7,869		$	6,407

(1)

Includes short-term leases.

(2)

$6.0 million, $5.7 million, and $6.3 million included in “Property-related”, with the remainder reflected in the “General and administrative” line of our consolidated statements of net income for 2023, 2022, and 2021, respectively.

Fixed minimum payments due over the remaining lease term under non-cancelable leases of more than one year and amounts to be received in the future from non-cancelable subleases over their remaining lease term at December 31, 2023 are as follows (amounts in thousands):


	Operating Leases			Finance Leases			Amounts To Be Received From Subleases			Net Payments
2024	$	9,292		$	130		$	(4,509	)	$	4,913
2025		9,279			131			(4,389	)		5,021
2026		8,522			133			(4,083	)		4,572
2027		7,985			134			(3,796	)		4,323
2028		8,073			135			(3,804	)		4,404
Thereafter		232,286			4,382			(62,455	)		174,213	(1)
Total undiscounted minimum lease payments	$	275,437		$	5,045		$	(83,036	)	$	197,446
Less: interest		(173,625	)		(3,107	)
Present value of lease liabilities	$	101,812		$	1,938

(1)

Reflects certain ground leases, in which we are the lessee, that have longer initial fixed terms than our existing sublease to our tenants. However, we would expect to either renew the related sublease, enter into a lease with a new tenant, or early terminate the ground lease to reduce or avoid any significant impact from such ground leases.

Supplemental balance sheet information is as follows (in thousands, except lease terms and discount rate):


	Balance Sheet Classification	December 31, 2023			December 31, 2022
Right of use assets:
Operating leases - real estate	Land	$	63,675		$	63,553
Finance leases - real estate	Land		1,683			1,734
Total real estate right of use assets		$	65,358		$	65,287
Operating leases - corporate	Other assets		24,243			26,225
Total right of use assets		$	89,601		$	91,512

Lease liabilities:
Operating leases	Obligations to tenants and other lease liabilities	$	101,812		$	101,592
Financing leases	Obligations to tenants and other lease liabilities		1,938			1,938
Total lease liabilities		$	103,750		$	103,530

Weighted-average remaining lease term:
Operating leases			32.9			33.2
Finance leases			32.9			33.9
Weighted-average discount rate:
Operating leases			6.2	%		6.1	%
Finance leases			6.6	%		6.6	%

The following is supplemental cash flow information (in thousands):


	For the Years Ended December 31,
	2023		2022		2021
Cash paid for amounts included in the measurement of lease liabilities:
Operating cash flows used for operating leases	$	8,210	$	7,169	$	7,330
Operating cash flows used for finance leases		129		128		126
Non-cash activities - Right-of-use assets obtained in exchange for lease obligations:
Operating leases		—		23,066		1,120