Leases

3 Months Ended

Mar. 31, 2025

Lessor

The Company’s rental revenue primarily consists of rent earned from operating leases at the Company’s rental housing, industrial, net lease, data centers, self storage, retail, and office properties. Leases at the Company’s industrial, data centers, retail, and office properties generally include a fixed base rent, and certain leases also contain a variable rent component. The variable component of the Company’s operating leases at its industrial, data centers, retail, and office properties primarily consist of the reimbursement of operating expenses such as real estate taxes, insurance, and common area maintenance costs. Rental revenue earned from leases at the Company’s rental housing properties primarily consist of a fixed base rent, and certain leases contain a variable component that allows for the pass-through of certain operating expenses such as utilities. Rental revenue earned from leases at the Company’s self storage properties primarily consist of a fixed base rent only.

Rental revenue from leases at the Company’s net lease properties consists of a fixed annual rent that escalates annually throughout the term of the applicable leases, and the tenant is generally responsible for all property-related expenses, including taxes, insurance, and maintenance. The Company’s net lease properties are leased to a single tenant. The Company assessed the lease classification of the net lease properties and determined the leases were each operating leases. The Company’s assessment included the consideration of the present value of the applicable lease payments over the lease terms and the residual value of the leased assets.

Leases at the Company’s industrial, net lease, data centers, retail, and office properties are generally longer term (greater than 12 months in length), and may contain extension and termination options at the lessee’s election. Often, these leases have annual escalations that are tied to the consumer price index. Leases at the Company’s rental housing and self storage properties are short term, generally not greater than 12 months in length.

The following table details the components of operating lease income from leases in which the Company is the lessor ($ in thousands):


	Three Months Ended March 31,
		2025		2024
Fixed lease payments		$	1,688,180	$	1,814,604
Variable lease payments		144,209		148,461
Rental revenue		$	1,832,389	$	1,963,065

The following table presents the undiscounted future minimum rents the Company expects to receive for its industrial, net lease, data centers, retail, and office properties as of March 31, 2025 ($ in thousands). Leases at the Company’s rental housing and self storage properties are short term, generally 12 months or less, and are therefore not included.


Year	Future Minimum Rents

2025 (remaining)	$	1,320,441
2026	1,685,818
2027	1,498,317
2028	1,296,381
2029	1,104,577
2030	915,965
Thereafter	14,140,717
Total	$	21,962,216

Lessee

Certain of the Company’s investments in real estate are subject to ground leases. The Company’s ground leases are classified as either operating leases or financing leases based on the characteristics of each lease. As of March 31, 2025, the Company had 89 ground leases classified as operating and three ground leases classified as financing. Each of the Company’s ground leases was acquired as part of the acquisition of real estate, and no incremental costs were incurred for such ground leases. The Company’s ground leases are non-cancelable and certain operating leases contain renewal options.

The following table details the future lease payments due under the Company’s ground leases as of March 31, 2025 ($ in thousands):


	Operating Leases		Financing Leases

2025 (remaining)	$	27,990	$	3,303
2026	36,101		4,507
2027	36,454		4,633
2028	36,739		4,763
2029	36,861		4,896
2030	37,037		5,033
Thereafter	2,034,889		549,465
Total undiscounted future lease payments	2,246,071		576,600
Difference between undiscounted cash flows and discounted cash flows	(1,639,080)		(496,803)
Total lease liability	$	606,991	$	79,797

The Company utilized its incremental borrowing rate at the time of entering such leases, which was between 5% and 7%, to determine its lease liabilities. As of March 31, 2025, the weighted average remaining lease term of the Company’s operating leases and financing leases were 59 years and 76 years, respectively.

Payments under the Company’s ground leases primarily contain fixed payment components that may include periodic increases based on an index or periodic fixed percentage escalations. Three of the Company’s ground leases contains a variable component based on a percentage of revenue.

The following table details the fixed and variable components of the Company’s operating leases ($ in thousands):`


	Three Months Ended March 31,
		2025		2024
Fixed ground rent expense		$	3,634	$	3,948
Variable ground rent expense		9,005		8,235
Total cash portion of ground rent expense		12,639		12,183
Straight-line ground rent expense		4,870		5,334
Total operating lease costs		$	17,509	$	17,517

The following table details the fixed and variable components of the Company’s financing leases ($ in thousands):


	Three Months Ended March 31,
		2025		2024
Interest on lease liabilities		$	1,087	$	1,091
Amortization of right-of-use assets		304		299
Total financing lease costs		$	1,391	$	1,390