LEASES (UNITED DOMINION REALTY, L.P.) (Tables)

3 Months Ended

Mar. 31, 2020

Lease

Lessee - Future minimum lease payments and total operating lease liabilities

Future minimum lease payments and total operating lease liabilities from our ground leases as of March 31, 2020 are as follows (dollars in thousands):

	Ground Leases
2020	$	9,330
2021		12,442
2022		12,442
2023		12,442
2024		12,442
Thereafter		455,221
Total future minimum lease payments (undiscounted)		514,319
Difference between future undiscounted cash flows and discounted cash flows		(316,490)
Total operating lease liabilities (discounted)	$	197,829

Lessee - components of operating lease expenses

The components of operating lease expenses were as follows (dollars in thousands):

	Three Months Ended March 31,
	2020		2019
Lease expense:
Contractual lease expense	$	3,170	$	2,159
Variable lease expense (a)		43		139
Total operating lease expense (b)(c)	$	3,213	$	2,298

(a) Variable lease expense includes adjustments such as changes in the consumer price index and payments based on a percentage of income of the lessee.

(b) Lease expense is reported within the line item Other operating expenses on the Consolidated Statements of Operations.

(c) For the three months ended March 31, 2020, Operating lease right-of-use assets and Operating lease liabilities amortized by $0.8 million and $0.7 million, respectively, and for the three months ended March 31, 2019 Operating lease right-of-use assets and Operating lease liabilities amortized by $0.2 million and $0.1 million, respectively. The Company recorded $0.1 million and $0.1 million of total operating lease expense during the three months ended March 31, 2020 and 2019, respectively, due to the net impact of the amortization. 

Lessor - Future minimum lease payments

Future minimum lease payments from our retail and commercial leases as of March 31, 2020 are as follows (dollars in thousands):

	Retail and Commercial Leases
2020	$	16,849
2021		22,487
2022		20,781
2023		19,317
2024		17,594
Thereafter		81,662
Total future minimum lease payments (a)	$	178,690

(a) We have excluded our apartment home leases from this table as our apartment home leases generally have initial terms of 12 months or less.

United Dominion Realty L.P.

Lease

Lessee - Future minimum lease payments and total operating lease liabilities

Future minimum lease payments and total operating lease liabilities from our ground and equipment leases as of March 31, 2020 are as follows (dollars in thousands):

	Ground Leases		Equipment Leases		Total
2020	$	9,330	$	108	$	9,438
2021		12,442		147		12,589
2022		12,442		150		12,592
2023		12,442		153		12,595
2024		12,442		156		12,598
Thereafter		455,221		795		456,016
Total future minimum lease payments (undiscounted)		514,319		1,509		515,828
Difference between future undiscounted cash flows and discounted cash flows		(316,490)		(189)		(316,679)
Total operating lease liabilities (discounted)	$	197,829	$	1,320	$	199,149

Lessee - components of operating lease expenses

The components of operating lease expenses from our ground and equipment leases were as follows (dollars in thousands):

	Three Months Ended
	March 31,
	2020		2019
Ground lease expense:
Contractual ground lease rent expense	$	3,170	$	2,140
Variable ground lease expense (a)		43		139
Total ground lease expense (b)		3,213		2,279
Contractual equipment lease expense (b)		36		-
Total operating lease expense (c)	$	3,249	$	2,279

(a) Variable ground lease expense includes adjustments such as changes in the consumer price index and payments based on a percentage of income of the lessee.

(b) Ground lease and equipment lease expense are reported within the line item Other operating expenses on the Consolidated Statements of Operations.

(c) For the three months ended March 31, 2020, Operating lease right-of-use assets and Operating lease liabilities amortized by $0.9 million and $0.9 million, respectively. The Operating Partnership recorded $0.1 million and $0.1 million of total operating lease expense during the three months ended March 31, 2020 and 2019, respectively, due to the net impact of the amortization. 

Lessor - Future minimum lease payments

Future minimum lease payments from our retail and commercial leases as of March 31, 2020 are as follows (dollars in thousands):

	Retail and Commercial Leases
2020	$	5,678
2021		7,311
2022		6,688
2023		6,361
2024		5,693
Thereafter		14,807
Total future minimum lease payments (a)	$	46,538

(a) We have excluded our apartment home leases from this table as our apartment home leases generally have initial terms of 12 months of less.