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LEASES
 12 Months Ended
Dec. 31, 2022
Leases [Abstract]  
LEASES LEASES
Operating Leases as Lessee
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.
Operating Lease Liability
As of December 31, 2022, maturities of operating lease liabilities were as follows:
(In thousands)
December 31, 2022
2023$705 
2024718 
2025470 
2026310 
2027319 
Thereafter4,752 
Total Payments7,274 
Less: Interest(2,133)
Operating Lease Liability$5,141 
The weighted-average discount rate for operating leases at December 31, 2022 was 4.23%. The weighted-average remaining lease term was 16.1 years.
Rent expense was $890 thousand, $885 thousand, and $765 thousand for the years ended December 31, 2022, 2021, and 2020, respectively.
Operating Leases as Lessor
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 for the year ended December 31, 2022.
Year Ended December 31,
(In thousands)202220212020
Lease revenue - operating leases$187,026 $169,005 $152,393 
Variable lease revenue (tenant reimbursements)6,585 3,807 2,328 
Total Rental Revenue$193,611 $172,812 $154,721 
Future Minimum Lease Payments to be Received
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)
December 31, 2022
2023$195,254 
2024195,254 
2025193,201 
2026191,693 
2027184,498 
Thereafter
801,043 
Total Future Minimum Lease Payments
$1,760,943 
Ground Leases as LesseeAs of December 31, 2022, the Company had finance ground lease assets aggregating $16.2 million. These assets are included in intangible real estate assets, net on 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 of sixty-one years to ninety-seven years. All but two of these leases have options to extend the lease terms for additional ninety-nine years 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 ninety-two years at December 31, 2022.
LEASES LEASES
Operating Leases as Lessee
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.
Operating Lease Liability
As of December 31, 2022, maturities of operating lease liabilities were as follows:
(In thousands)
December 31, 2022
2023$705 
2024718 
2025470 
2026310 
2027319 
Thereafter4,752 
Total Payments7,274 
Less: Interest(2,133)
Operating Lease Liability$5,141 
The weighted-average discount rate for operating leases at December 31, 2022 was 4.23%. The weighted-average remaining lease term was 16.1 years.
Rent expense was $890 thousand, $885 thousand, and $765 thousand for the years ended December 31, 2022, 2021, and 2020, respectively.
Operating Leases as Lessor
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 for the year ended December 31, 2022.
Year Ended December 31,
(In thousands)202220212020
Lease revenue - operating leases$187,026 $169,005 $152,393 
Variable lease revenue (tenant reimbursements)6,585 3,807 2,328 
Total Rental Revenue$193,611 $172,812 $154,721 
Future Minimum Lease Payments to be Received
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)
December 31, 2022
2023$195,254 
2024195,254 
2025193,201 
2026191,693 
2027184,498 
Thereafter
801,043 
Total Future Minimum Lease Payments
$1,760,943 
Ground Leases as LesseeAs of December 31, 2022, the Company had finance ground lease assets aggregating $16.2 million. These assets are included in intangible real estate assets, net on 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 of sixty-one years to ninety-seven years. All but two of these leases have options to extend the lease terms for additional ninety-nine years 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 ninety-two years at December 31, 2022.