LEASES (Tables)

12 Months Ended

Dec. 31, 2025

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 December 31, 2025 are as follows (dollars in thousands):

	Ground Leases
2026	$	12,695
2027		12,695
2028		12,695
2029		12,695
2030		12,695
Thereafter		389,340
Total future minimum lease payments (undiscounted)		452,815
Difference between future undiscounted cash flows and discounted cash flows		(269,852)
Total operating lease liabilities (discounted)	$	182,963

Lessee - Components of operating lease expenses

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

	Year Ended December 31,
	2025		2024		2023
Lease expense:
Contractual lease expense	$	13,562	$	13,322	$	13,173
Variable lease expense (a)		234		189		155
Total operating lease expense (b)(c)	$	13,796	$	13,511	$	13,328

(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 year ended December 31, 2025, Operating lease right-of-use assets and Operating lease liabilities amortized by $3.8 million and $3.7 million, respectively, for the year ended December 31, 2024, Operating lease right-of-use assets and Operating lease liabilities amortized by $3.6 million and $3.5 million, respectively, and for the year ended December 31, 2023, Operating lease right-of-use assets and Operating lease liabilities amortized by $3.5 million and $3.4 million, respectively. Due to the net impact of the amortization, the Company recorded $0.1 million, $0.1 million and $0.1 million of total operating lease expense during the years ended December 31, 2025, 2024 and 2023, respectively.

Lessor - Future minimum lease payments

Future minimum lease payments from our retail and commercial leases as of December 31, 2025 are as follows (dollars in thousands):

	Retail and Commercial Leases
2026	$	28,234
2027		26,442
2028		23,636
2029		19,317
2030		14,657
Thereafter		87,610
Total future minimum lease payments (a)	$	199,896

(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.