Leases (Lessee)

12 Months Ended

Dec. 31, 2025

11. Leases (Lessee)

We lease the land underlying certain of our facilities (for which we typically sublease to our tenants), along with certain 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	2025			2024			2023
Operating lease cost (1)	(2)	$	9,254		$	10,725		$	11,653
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		(2,425	)		(3,259	)		(4,178	)
Total lease cost		$	7,008		$	7,645		$	7,654

(1)

Includes short-term leases.

(2)

$4.1 million, $5.1 million, and $6.0 million included in “Property-related”, with the remainder reflected in the “General and administrative” line of our consolidated statements of net income for 2025, 2024, and 2023, 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, 2025 are as follows (amounts in thousands):


	Operating Leases			Finance Leases			Amounts To Be Received From Subleases			Net Payments
2026	$	7,109		$	133		$	(2,877	)	$	4,365
2027		6,567			134			(2,515	)		4,186
2028		6,648			135			(2,516	)		4,267
2029		6,706			137			(2,518	)		4,325
2030		6,733			138			(2,525	)		4,346
Thereafter		160,583			4,106			(38,522	)		126,167	(1)
Total undiscounted minimum lease payments	$	194,346		$	4,783		$	(51,473	)	$	147,656
Less: interest		(122,351	)		(2,850	)
Present value of lease liabilities	$	71,995		$	1,933

(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 attempt to 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, 2025			December 31, 2024
Right of use assets:
Operating leases - real estate	Land	$	43,801		$	46,881
Finance leases - real estate	Land		1,581			1,632
Total real estate right of use assets		$	45,382		$	48,513
Operating leases - corporate	Other assets		17,641			20,701
Total right of use assets		$	63,023		$	69,214

Lease liabilities:
Operating leases	Obligations to tenants and other lease liabilities	$	71,995		$	78,585
Financing leases	Obligations to tenants and other lease liabilities		1,933			1,936
Total lease liabilities		$	73,928		$	80,521

Weighted-average remaining lease term:
Operating leases			33.4			32.6
Finance leases			30.9			31.9
Weighted-average discount rate:
Operating leases			6.1	%		6.1	%
Finance leases			6.6	%		6.6	%

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


	For the Years Ended December 31,
	2025		2024		2023
Cash paid for amounts included in the measurement of lease liabilities:
Operating cash flows used for operating leases	$	8,013	$	8,447	$	8,210
Operating cash flows used for finance leases		131		130		129