LEASES (Tables)

3 Months Ended

Mar. 31, 2024

LEASES

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, 2024 are as follows (dollars in thousands):

	Ground Leases
2024	$	9,332
2025		12,442
2026		12,442
2027		12,442
2028		12,442
Thereafter		405,452
Total future minimum lease payments (undiscounted)		464,552
Difference between future undiscounted cash flows and discounted cash flows		(279,591)
Total operating lease liabilities (discounted)	$	184,961

Lessee - components of operating lease expenses

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

	Three Months Ended March 31,
	2024		2023
Lease expense:
Contractual lease expense	$	3,350	$	3,292
Variable lease expense (a)		40		28
Total operating lease expense (b)(c)	$	3,390	$	3,320

(a) Variable lease expense includes adjustments such as changes in the consumer price index and payments based on a percentage of a community’s revenue.

(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, 2024, Operating lease right-of-use assets and Operating lease liabilities amortized by $0.9 million and $0.9 million, respectively. For the three months ended March 31, 2023, Operating lease right-of-use assets and Operating lease liabilities amortized by $0.8 million and $0.8 million, respectively. Due to the net impact of the amortization, the Company recorded less than $0.1 million and less than $0.1 million of total operating lease expense during the three months ended March 31, 2024 and 2023, respectively. 

Lessor - Future minimum lease payments

Future minimum lease payments from our retail and commercial leases as of March 31, 2024 are as follows (dollars in thousands):

	Retail and Commercial Leases
2024	$	19,844
2025		24,675
2026		21,896
2027		18,252
2028		15,464
Thereafter		59,571
Total future minimum lease payments (a)	$	159,702

(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.