Leasing Agreements

12 Months Ended

Dec. 31, 2025

Lessor

As a lessor, substantially all of our revenues are earned from arrangements that are within the scope of ASC 842. We account for lease and non-lease components as a single component, which resulted in all of our revenues associated with leases being recorded as rental revenues in the consolidated statements of operations. For the years ended December 31, 2025, 2024 and 2023 we recorded a straight-line rent adjustment of $3.4 million, $607,000 and $2.2 million, respectively, as an increase to rental revenues in our consolidated statements of operations to record revenues from executory costs on a straight-line basis. In addition, direct internal leasing costs are capitalized; however, indirect internal leasing costs are expensed. We only capitalize the portion of these types of costs incurred that are a direct result of an executed lease.

As of December 31, 2025, we were the lessor to over 2,600 stores in our 34 consolidated centers, under operating leases with initial terms that expire from 2026 to 2039, with certain agreements containing extension options. We also have certain agreements which require tenants to pay their portion of reimbursable expenses such as common area expenses, utilities, insurance and real estate taxes.

For the years ended December 31, 2025, 2024 and 2023, the components of rental revenues are as follows (in thousands):


	2025		2024		2023
Rental revenues - fixed	$	437,255	$	397,090	$	343,433
Rental revenues - variable (1)	113,641		100,426		95,456
Rental revenues	$	550,896	$	497,516	$	438,889

(1)Primarily includes rents based on a percentage of tenant sales volume and reimbursable expenses such as common area expenses, utilities, insurance and real estate taxes.

Future minimum lease receipts under non-cancelable operating leases as of December 31, 2025, excluding the effect of straight-line rent and variable rentals, are as follows (in thousands):



2026	$	386,535
2027	318,447
2028	241,761
2029	191,029
2029	136,286
Thereafter	424,353
	$	1,698,411

Lessee

As of December 31, 2025 and 2024 we have operating lease right-of-use assets $83.5 million and $76.1 million, respectively, and operating lease liabilities of $91.6 million, and $84.5 million, respectively.

Our non-cancelable operating leases, with terms in excess of one year, have terms, including certain extension options, that expire from 2026 to 2101. Certain extension options, which are reasonably certain at inception, are used in the calculation of our operating lease right-of-use assets based on the economic life of the asset. Leases with an initial term of 12 months or less (short-term leases) are not recorded on the balance sheet; we recognize lease expense for these leases on a straight-line basis over the lease term. The majority of our operating lease expense is related to ground leases at the following centers: Myrtle Beach Hwy 17, Atlantic City, Sevierville, Riverhead, Foxwoods and Rehoboth Beach and the lease of our corporate office in Greensboro, North Carolina.

For the years ended December 31, 2025, 2024 and 2023, the components of lease costs are as follows (in thousands):


	2025		2024		2023
Operating lease costs	$	5,614	$	5,490	$	5,493
Short-term lease costs	992		890		1,221
Variable lease costs (1)	964		708		738
Total lease costs	$	7,570	$	7,088	$	7,452

(1)Our variable lease costs relate to our ground leases where increases in payments are based on center financial performance.

The discount rate applied to measure each operating lease right-of-use asset and operating lease liability is based on our incremental borrowing rate (“IBR”). We consider the general economic environment and our credit rating and factor in various financing and asset specific adjustments to ensure the IBR is appropriate based on the intended use of the underlying lease. The lease term and discount rates are as follows:


	2025
Weighted - average remaining lease term (years)	48.45
Weighted - average discount rate	5.0	%

Cash flow information related to leases for the years ended December 31, 2025, 2024 and 2023 was as follows (in thousands):


	2025		2024		2023
Operating cash outflows related to operating leases	$	5,943	$	5,765	$	5,709

Maturities of lease liabilities as of December 31, 2025 for the next five years and thereafter are as follows (in thousands):


2026	$	6,323
2027	6,361
2028	5,414
2029	5,128
2030	5,149

Thereafter	221,249
Total lease payments	$	249,624
Less imputed interest	158,055
Present value of lease liabilities	$	91,569