LEASE REVENUE LEASE REVENUE

6 Months Ended

Jun. 30, 2020

Operating Lease, Lease Income [Text Block]

LEASE REVENUE

The Company’s primary revenue is rental income from business distribution space. The table below presents the components of Income from real estate operations for the three and six months ended June 30, 2020 and 2019:



	Three Months Ended			Six Months Ended
	2020		2019	2020	2019
	(In thousands)
Lease income — operating leases	$	66,793	61,478	132,756	120,370
Variable lease income ⁽¹⁾	22,707		20,305	45,321	40,050
Income from real estate operations	$	89,500	81,783	178,077	160,420


(1)	Primarily includes tenant reimbursements for real estate taxes, insurance and common area maintenance.

In April 2020, the Financial Accounting Standards Board (“FASB”) issued FASB Staff Question-and-Answer (“Q&A”)-Topic 842 and Topic 840: Accounting for Lease Concessions Related to the Effects of the COVID-19 Pandemic to clarify whether lease concessions related to the effects of the COVID-19 pandemic require the application of lease modification guidance under FASB Accounting Standards Codification (“ASC”) 842, Leases. Under ASC 842, an entity must determine, on a lease by lease basis, if a lease concession was the result of a new arrangement reached with the tenant, which would be accounted for under the lease modification framework, or if the lease concession was under the enforceable rights and obligations that existed in the original lease, which would be accounted for outside the lease modification framework. The Q&A provides a practical expedient for entities to make an election to account for certain lease concessions consistent with how those concessions would be accounted for outside of the lease modification framework. This election is available for concessions related to the effects of the COVID-19 pandemic that do not result in a substantial increase in the rights of the lessor or the obligations of the lessee. The FASB staff provided two possible methods to account for deferral of payments with no substantive changes to the consideration in the original contract: (a) account for the concessions as if no changes to the lease contract were made and, (b) account for the deferred payments as variable lease payments. The Company has elected the practical expedient provided by the FASB staff and is accounting for lease concessions meeting the criterion as if no changes to the lease contract were made. For the three and six months ended June

30, 2020, the Company recognized approximately $791,000 in Income from real estate operations from lease concessions under this election.