Leases

6 Months Ended

Jun. 30, 2024

Leases [Abstract]

Leases

Leases

Lessor

The Company, as Lessor, leases industrial and office space to tenants primarily under leases classified as non-cancelable operating leases that generally contain provisions for contractual base rents plus reimbursement for certain recoverable operating expenses including, without limitation, real estate taxes, insurance, common area maintenance (“Recoverable Operating Expenses”). Total contractual base rent payments are recognized in rental income on a straight-line basis over the term of the related lease. Estimated reimbursements from tenants for Recoverable Operating Expenses are recognized in rental income in the period that the expenses are incurred.

The Company recognized $100.8 million and $112.9 million of lease income related to operating lease payments for the six months ended June 30, 2024 and June 30, 2023, respectively.

The Company's current third-party tenant leases have expirations ranging from 2024 to 2044. The following table (i) sets forth undiscounted cash flows for future contractual base rents to be received under operating leases as of June 30, 2024, and (ii) excludes estimated reimbursements of Recoverable Operating Expenses:

	As of June 30, 2024
Remaining 2024	$	92,268
2025	185,409
2026	183,202
2027	170,299
2028	155,609
Thereafter	596,178
Total	$	1,382,965

Lessee - Ground Leases

As of June 30, 2024, the Company is the tenant (lessee) under (i) three ground leases classified as operating leases, and (ii) two ground leases classified as financing leases. Each of these ground leases were assigned to the Company as part of its acquisition of the applicable assets and no incremental costs were incurred for such ground leases. These ground leases are classified as non-cancelable and contain no renewal options.

Lessee - Office Leases

As of June 30, 2024, the Company is the tenant (lessee) under the following two office space leases, each of which is classified as a non-cancelable operating lease: (i) the El Segundo Sublease described in Note 11, Related Party Transactions, above, and (ii) a lease for its office space in Chicago, Illinois, which expires on June 29, 2025.

Lessee Summary - Ground Leases and Office Leases

For ground leases and office leases in which the Company is a lessee, the Company incurred costs of approximately $1.9 million for the six months ended June 30, 2024 and $1.9 million for the six months ended June 30, 2023, which are included in “Property Operating Expense” in the accompanying consolidated statement of operations. Total cash paid for amounts included in the measurement of operating lease liabilities was $1.1 million for the six months ended June 30, 2024 and $1.1 million for the six months ended June 30, 2023.

The following table sets forth the weighted-average for the lease term and the discount rate for the ground leases and office leases in which the Company is a lessee as of June 30, 2024:

	As of June 30, 2024
Lease Term and Discount Rate	Operating	Financing
Weighted-average remaining lease term in years	75.3	15.5
Weighted-average discount rate (1)	4.98%	3.43%

(1)Because the rate implicit in each of the Company's leases was not readily determinable, the Company used an incremental borrowing rate. In determining the Company's incremental borrowing rate for each lease, the Company considered recent rates on secured borrowings, observable risk-free interest rates and credit spreads correlating to the Company's creditworthiness, the impact of collateralization and the term of each of the Company's lease agreements.

Maturities of lease liabilities as of June 30, 2024 were as follows:

	As of June 30, 2024
	Operating		Financing
2024	$	1,054	$	303
2025	2,051		365
2026	1,748		375
2027	1,527		381
2028	1,595		386
Thereafter	248,691		3,070
Total undiscounted lease payments	256,666		4,880
Less: imputed interest	(212,742)		(1,870)
Total lease liabilities	$	43,924	$	3,010

Leases

Leases

Lessor

The Company, as Lessor, leases industrial and office space to tenants primarily under leases classified as non-cancelable operating leases that generally contain provisions for contractual base rents plus reimbursement for certain recoverable operating expenses including, without limitation, real estate taxes, insurance, common area maintenance (“Recoverable Operating Expenses”). Total contractual base rent payments are recognized in rental income on a straight-line basis over the term of the related lease. Estimated reimbursements from tenants for Recoverable Operating Expenses are recognized in rental income in the period that the expenses are incurred.

The Company recognized $100.8 million and $112.9 million of lease income related to operating lease payments for the six months ended June 30, 2024 and June 30, 2023, respectively.

The Company's current third-party tenant leases have expirations ranging from 2024 to 2044. The following table (i) sets forth undiscounted cash flows for future contractual base rents to be received under operating leases as of June 30, 2024, and (ii) excludes estimated reimbursements of Recoverable Operating Expenses:

	As of June 30, 2024
Remaining 2024	$	92,268
2025	185,409
2026	183,202
2027	170,299
2028	155,609
Thereafter	596,178
Total	$	1,382,965

Lessee - Ground Leases

As of June 30, 2024, the Company is the tenant (lessee) under (i) three ground leases classified as operating leases, and (ii) two ground leases classified as financing leases. Each of these ground leases were assigned to the Company as part of its acquisition of the applicable assets and no incremental costs were incurred for such ground leases. These ground leases are classified as non-cancelable and contain no renewal options.

Lessee - Office Leases

As of June 30, 2024, the Company is the tenant (lessee) under the following two office space leases, each of which is classified as a non-cancelable operating lease: (i) the El Segundo Sublease described in Note 11, Related Party Transactions, above, and (ii) a lease for its office space in Chicago, Illinois, which expires on June 29, 2025.

Lessee Summary - Ground Leases and Office Leases

For ground leases and office leases in which the Company is a lessee, the Company incurred costs of approximately $1.9 million for the six months ended June 30, 2024 and $1.9 million for the six months ended June 30, 2023, which are included in “Property Operating Expense” in the accompanying consolidated statement of operations. Total cash paid for amounts included in the measurement of operating lease liabilities was $1.1 million for the six months ended June 30, 2024 and $1.1 million for the six months ended June 30, 2023.

The following table sets forth the weighted-average for the lease term and the discount rate for the ground leases and office leases in which the Company is a lessee as of June 30, 2024:

	As of June 30, 2024
Lease Term and Discount Rate	Operating	Financing
Weighted-average remaining lease term in years	75.3	15.5
Weighted-average discount rate (1)	4.98%	3.43%

(1)Because the rate implicit in each of the Company's leases was not readily determinable, the Company used an incremental borrowing rate. In determining the Company's incremental borrowing rate for each lease, the Company considered recent rates on secured borrowings, observable risk-free interest rates and credit spreads correlating to the Company's creditworthiness, the impact of collateralization and the term of each of the Company's lease agreements.

Maturities of lease liabilities as of June 30, 2024 were as follows:

	As of June 30, 2024
	Operating		Financing
2024	$	1,054	$	303
2025	2,051		365
2026	1,748		375
2027	1,527		381
2028	1,595		386
Thereafter	248,691		3,070
Total undiscounted lease payments	256,666		4,880
Less: imputed interest	(212,742)		(1,870)
Total lease liabilities	$	43,924	$	3,010