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Operating Leases

9 Months Ended

Apr. 30, 2024

6.	Operating Leases:

Lessor

The Company leases office and retail space to tenants under operating leases in commercial buildings. Most rental terms range from approximately 5 to 49 years. The leases provide for the payment of fixed base rent payable monthly in advance as well as reimbursements of real estate taxes and common area costs. The Company has elected to account for lease revenues and the reimbursements of common area costs as a single component included as rental income in our consolidated statements of operations.

The following table disaggregates the Company’s revenues by lease and non-lease components:


	Three Months Ended April 30				Nine Months Ended April 30
	2024		2023		2024		2023
Base rent - fixed	$	4,897,366	$	5,011,464	$	14,773,886	$	15,674,292
Reimbursements of common area costs		201,494		271,433		548,048		674,759
Non-lease components (real estate taxes)		265,464		280,499		781,034		821,898
Rental income	$	5,364,324	$	5,563,396	$	16,102,968	$	17,170,949

Future minimum non-cancelable rental income for leases with initial or remaining terms of one year or more is as follows:


	As of April 30, 2024
Fiscal Year	Company Owned Property		Leased Property		Total
For the remainder of 2024	$	3,249,942	$	1,636,452	$	4,886,394
2025		10,002,345		4,703,972		14,706,317
2026		8,412,873		4,258,525		12,671,398
2027		7,264,152		4,114,812		11,378,964
2028		6,426,581		4,068,938		10,495,519
2029		5,833,371		3,243,914		9,077,285
After 2029		22,485,794		6,420,696		28,906,490
Total	$	63,675,058	$	28,447,309	$	92,122,367

Lessee

The Company’s real estate operations include leased properties under long-term, non-cancelable operating lease agreements. The leases expire at various dates through 2073, including options to extend or terminate the lease when it is reasonably certain the Company will exercise that option. Certain leases provide for increases in future minimum annual rental payments as defined in the lease agreements.

In July 2022, the Company entered into lease agreements with its landlord for two of its properties as follows:

Jamaica Avenue at 169th Street, Jamaica, New York - Giving the Company four five-year option periods to extend its lease beyond May 31, 2030 for a total of twenty years through May 31, 2050. In April 2023, the Company exercised the first five-year option period, extending the lease expiration date to May 31, 2035. The effect of the lease extension on the measurement of operating right-of-use assets, liabilities, and monthly rent expense follows:


	Jamaica Avenue at 169th Street
	Increase in Operating Lease Right- of-Use Asset		Increase in Operating Lease Liability		Decrease in Monthly Rent Expense
Remeasurement change resulting from April 2023 lease extension	$	1,201,952	$	1,201,952	$	(30,563	)

As of April 30, 2024, it is not reasonably certain the remaining three options to extend the lease will be exercised by the Company.

504-506 Fulton Street, Brooklyn, New York – In July, 2022 the lease agreement was modified to increase monthly lease payments from $30,188 per month to $34,716 per month commencing on May 1, 2026 through April 30, 2031. The effect of the lease modification on the measurement of operating right-of-use assets, liabilities, and monthly rent expense follows:


	504-506 Fulton Street
	Increase in Operating Lease Right- of-Use Asset		Increase in Operating Lease Liability		Increase in Monthly Rent Expense
Remeasurement change resulting from July 2022 lease modification	$	94,412	$	94,412	$	2,563

The landlord is Weinstein Enterprises, Inc., an affiliated company principally owned by the Chairman of the Board of Directors who also principally owns the Company.

Operating lease costs for leased real property was exceeded by sublease rental income from the Company’s real estate operations as follows:

Schedule of rental expense
	Three Months Ended April 30						Nine Months Ended April 30
	2024			2023			2024			2023
Sublease income	$	1,813,879		$	1,821,446		$	5,485,078		$	5,511,702
Operating lease cost		(749,180	)		(809,837	)		(2,246,875	)		(2,490,637	)
Excess of sublease income over lease cost	$	1,064,699		$	1,011,609		$	3,238,203		$	3,021,065


	Three Months Ended April 30				Nine Months Ended April 30
Other information:	2024		2023		2024		2023
Operating cash flows from operating leases	$	538,294	$	533,965	$	1,610,243	$	1,597,434

The following is a maturity analysis of the annual undiscounted cash flows of the operating lease liabilities as of April 30, 2024:


Period Ended April 30,	Operating Leases
2025	$	2,163,029
2026		2,201,559
2027		2,323,725
2028		2,343,903
2029		2,364,753
Thereafter		22,258,190
Total undiscounted cash flows		33,655,159
Less: present value discount		(8,037,399	)
Total Lease Liabilities	$	25,617,760

As of April 30, 2024, our operating leases had a weighted average remaining lease term of 16.05 years and a weighted average discount rate of 3.68%.