As a lessee we record right-of-use assets and lease liabilities for the two ground leases at our Kerrow Restaurant Operating Business and our corporate office space. The two ground leases have extension options, which we believe will be exercised and are included in the calculation of our lease liabilities and right-of-use assets. In calculating the lease obligations under both the ground leases and office lease, we used discount rates estimated to be equal to what the Company would have to pay to borrow on a collateralized basis over a similar term, for an amount equal to the lease payments, in a similar economic environment.

Maturities of operating lease liabilities were as follows:


(In thousands)	March 31,
2025 (Nine Months)	$	290
2026		310
2027		319
2028		319
2029		319
Thereafter		4,112
Total Payments		5,669
Less: Interest		(1,691	)
Operating Lease Liability	$	3,978

The weighted-average discount rate for operating leases at March 31, 2025 was 4.49%. The weighted-average remaining lease term was 15.9 years.

Rental expense was $231 thousand and $227 thousand for the three months ended March 31, 2025 and 2024, respectively.

Our leases consist primarily of single-tenant, net leases, in which the tenants are responsible for making payments to third parties for operating expenses such as property taxes, insurance, and other costs associated with the properties leased to them. In leases where costs are paid by the Company and reimbursed by lessees, such payments are considered variable lease payments and recognized in rental revenue.

The following table shows the components of rental revenue.


	Three Months Ended March 31,
(In thousands)	2025		2024
Lease revenue - operating leases	$	60,742	$	55,888
Variable lease revenue (tenant reimbursements)		2,740		2,685
Total Rental Revenue	$	63,482	$	58,573

The following table presents the scheduled minimum future contractual rent to be received under the remaining non-cancelable term of the operating leases. The table presents future minimum lease payments due during the initial lease term only as lease renewal periods are exercisable at the option of the lessee.


(In thousands)	March 31,
2025 (Nine Months)	$	183,278
2026		244,960
2027		237,446
2028		211,358
2029		185,021
Thereafter		865,914
Total Future Minimum Lease Payments	$	1,927,977

As of both March 31, 2025 and December 31, 2024, the Company had finance ground lease assets aggregating $13.9 million. These assets are included in intangible real estate assets, net in the Consolidated Balance Sheets. The Company did not recognize a lease liability as no payments are due in the future under the leases. The Company’s ground lease assets have remaining terms ranging from 58.7 years to 93.8 years. All but two of these leases have options to extend certain of the lease terms for additional ninety-nine year terms, and all have the option to purchase the assets once certain conditions and contingencies are met. The weighted average remaining non-cancelable lease term for the ground leases was 88.8 years at March 31, 2025.