Leases

12 Months Ended

Dec. 31, 2022

11. Leases

Operating Leases

As Lessor

The Company is engaged in the operation of shopping centers and other retail properties that are either owned or, with respect to certain shopping centers, operated under long-term ground leases (see below) that expire at various dates through June 20, 2066, with renewal options. Space in the shopping centers is leased to tenants pursuant to agreements that provide for terms ranging generally from one month to sixty years and generally provide for additional rents based on certain operating expenses as well as tenants’ sales volumes. During the years ended December 31, 2022 and 2021, the Company earned $59.3 million and $58.3 million, respectively, in variable lease revenues, primarily for real estate taxes and common area maintenance charges, which are included in rental income in the consolidated statements of operations.

Reserve Analysis

The activity for the reserves related to billed rents and straight-line rents (including those under specific operating leases where the collection of rents is assessed not to be probable) is as follows:


	Year Ended December 31, 2022
			Specific Allowance
	Balance at Beginning of Period		Provision (Recovery), Net			Write-Offs			General Allowance		Balance at End of Period

Allowance for credit loss - billed rents	$	23,586	$	(102	)	$	(4,656	)	$	-	$	18,828
Straight-line rent reserves		14,885		(1,742	)		(1,348	)		1,450		13,245
Total - credit losses and reserves	$	38,471	$	(1,844	)	$	(6,004	)	$	1,450	$	32,073


	Year Ended December 31, 2021
			Specific Allowance
	Balance at Beginning of Period		Provision (Recovery), Net			Write-Offs			General Allowance		Balance at End of Period

Allowance for credit loss - billed rents	$	30,170	$	(2,796	)	$	(3,788	)	$	—	$	23,586
Straight-line rent reserves		14,839		807			(2,636	)		1,875		14,885
Total - credit losses and reserves	$	45,009	$	(1,989	)	$	(6,424	)	$	1,875	$	38,471

Tenant Settlement

On September 24, 2021, the Company entered into a conditional settlement agreement with its former tenant ("Former Tenant") and lease guarantor at one of its Core properties for the payment by Former Tenant and guarantor of a minimum of $5.4 million in accordance with a payment schedule set forth and subject to the terms in the conditional settlement agreement. The payments relate to judgments entered in favor of the Company totaling $8.6 million, plus interest, for the Former Tenant’s default under the lease and its subsequent termination by the Company. Given the inherent uncertainties involving collectability, the Company has deferred any amounts not received in its consolidated financial statements and such amounts will be recognized when realized. Through December 31, 2022 the Company had received a total of $2.7 million, of which $2.4 million was recognized as Other revenues on the statement of operations for the year ended December 31, 2022.

As Lessee

During the year ended December 31, 2022, there were no leasing transactions where the Company acted as lessee.

During the year ended December 31, 2021, the Company:

•

modified its Rye, New York corporate office lease during the first quarter of 2021. As a result of the modification, the lease was remeasured, and the lease liability and right-of-use asset were each reduced by $0.4 million; and

•

terminated its Fund IV lease at 110 University Place in New York City during the second quarter of 2021 (which was previously impaired in 2020) for $3.6 million, and de-recognized the related right-of-use asset of $31.4 million, lease liability of $46.0 million and building improvements and other assets totaling $10.3 million, resulting in a gain on lease termination of $0.7 million, or $0.2 million at the Company's share, which is reflected within Gain on disposition of properties in the consolidated statements of operations.

Additional disclosures regarding the Company’s leases as lessee are as follows:


	Year Ended December 31,
	2022			2021
Lease Cost
Finance lease cost:
Amortization of right-of-use assets	$	903		$	903
Interest on lease liabilities		410			388
Subtotal		1,313			1,291
Operating lease cost		5,338			7,184
Variable lease cost		80			84
Total lease cost	$	6,731		$	8,559

Other Information
Weighted-average remaining lease term - finance leases (years)		31.9			32.6
Weighted-average remaining lease term - operating leases (years)		13.5			14.1
Weighted-average discount rate - finance leases		6.3	%		6.3	%
Weighted-average discount rate - operating leases		5.1	%		5.1	%

Right-of-use assets – finance leases are included in Operating real estate (Note 2) in the consolidated balance sheet. Lease liabilities – finance leases are included in Accounts payable and other liabilities in the consolidated balance sheet (Note 5). Operating lease cost comprises amortization of right-of-use assets for operating properties (related to ground rents) or amortization of right-of-use assets for office and corporate assets and is included in Property operating expense or General and administrative expense, respectively, in the consolidated statements of

operations. Finance lease cost comprises amortization of right-of-use assets for certain ground leases, which is included in Property operating expense, as well as interest on lease liabilities, which is included in Interest expense in the consolidated statements of operations.

Lease Obligations

The scheduled future minimum (i) rental revenues from rental properties under the terms of non-cancelable tenant leases greater than one year (assuming no new or renegotiated leases or option extensions for such premises) and (ii) rental payments under the terms of all non-cancelable operating and finance leases in which the Company is the lessee, principally for office space, land, and equipment, as of December 31, 2022, are summarized as follows (in thousands):


			Minimum Rental Payments
Year Ending December 31,	Minimum Rental Revenues (a)		Operating Leases (b)			Finance Leases (b)
2023	$	229,366	$	5,389		$	—
2024		223,138		5,414			—
2025		193,277		5,329			—
2026		166,582		5,173			—
2027		143,435		4,373			—
Thereafter		608,168		20,065			12,549
		1,563,966		45,743			12,549
Interest		—		(10,472	)		(5,527	)
Total	$	1,563,966	$	35,271		$	7,022

Amount represents contractual lease maturities at December 31, 2022 including any extension options that management determined were reasonably certain of exercise.

Minimum rental payments include $10.5 million of interest related to operating leases and $5.5 million related to finance leases and exclude options or renewals not reasonably certain of exercise.

During the years ended December 31, 2022, 2021 and 2020, no single tenant or property collectively comprised more than 10% of the Company’s consolidated total revenues.