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Leases
 6 Months Ended
Jun. 30, 2021
Leases [Abstract]  
Leases Leases
Lessor Accounting
The Company’s properties generally are leased pursuant to non-cancelable, fixed-term operating leases with expiration dates through 2040. Some leases provide for fixed rent renewal terms in addition to market rent renewal terms. Some leases provide the lessee, during the term of the lease, with an option or right of first refusal to purchase the leased property. The Company’s single-tenant net leases generally require the lessee to pay minimum rent and all taxes (including property tax), insurance, maintenance and other operating costs associated with the leased property.
The Company's leases typically have escalators that are either based on a stated percentage or an index such as consumer price index ("CPI"). In addition, most of the Company's leases include nonlease components, such as reimbursement of operating expenses as additional rent, or include the reimbursement of expected operating expenses as part of the lease payment. The Company adopted an accounting policy to combine lease and nonlease components. Rent escalators based on indices and reimbursements of operating expenses that are not included in the lease rate are considered variable lease payments. Variable payments are recognized in the period earned. Lease income for the Company's operating leases recognized for the three and six months ended June 30, 2021 was $128.5 million and $256.9 million, respectively.
Future lease payments under the non-cancelable operating leases, excluding any reimbursements, as of June 30, 2021 were as follows:
In thousandsOPERATING
2021$197,162 
2022364,748 
2023316,864 
2024249,638 
2025199,827 
2026 and thereafter553,214 
$1,881,453 
Lessee Accounting
As of June 30, 2021, the Company was obligated, as the lessee, under operating lease agreements consisting primarily of the Company’s ground leases. As of June 30, 2021, the Company had 105 properties totaling 8.8 million square feet that were held under ground leases. Some of the ground lease renewal terms are based on fixed rent renewal terms and others have market rent renewal terms. These ground leases typically have initial terms of 40 to 99 years with expiration dates through 2119. Any rental increases related to the Company’s ground leases are generally either stated or based on CPI. The Company had 43 prepaid ground leases as of June 30, 2021. The amortization of the prepaid rent, included in the operating lease right-of-use asset, represented approximately $0.1 million and $0.2 million of the Company’s rental expense for the three months ended June 30, 2021 and 2020, respectively, and $0.3 million for the six months ended June 30, 2021 and 2020, respectively.
The Company’s future lease payments (primarily for its 62 non-prepaid ground leases) as of June 30, 2021 were as follows:
In thousandsOPERATINGFINANCING
2021$2,049 $290 
20224,932 783 
20234,971 793 
20245,027 815 
20255,068 826 
2026 and thereafter303,574 87,983 
Total undiscounted lease payments325,621 91,490 
Discount(233,511)(72,842)
Lease liabilities$92,110 $18,648 
The following table provides details of the Company's total lease expense for the three and six months ended June 30, 2021 and 2020:
THREE MONTHS ENDED
June 30,		SIX MONTHS ENDED
June 30,
In thousands2021202020212020
Operating lease cost
Operating lease expense$1,182 $1,175 $2,360 $2,349 
Variable lease expense972 804 1,868 1,604 
Finance lease cost
Amortization of right-of-use assets88 78 176 148 
Interest on lease liabilities247 240 493 477 
Total lease expense$2,489 $2,297 $4,897 $4,578 
Other information
Operating cash flows outflows related to operating leases$2,587 $1,416 $4,431 $3,972 
Financing cash flows outflows related to financing leases$321 $2,847 $683 $3,168 
Right-of-use assets obtained in exchange for new finance lease liabilities$— $7,212 $— $7,212 
Weighted-average remaining lease term (excluding renewal options) - operating leases48.149.1
Weighted-average remaining lease term (excluding renewal options) - finance leases64.565.0
Weighted-average discount rate - operating leases5.7 %5.7 %
Weighted-average discount rate - finance leases5.4 %5.4 %
Leases Leases
Lessor Accounting
The Company’s properties generally are leased pursuant to non-cancelable, fixed-term operating leases with expiration dates through 2040. Some leases provide for fixed rent renewal terms in addition to market rent renewal terms. Some leases provide the lessee, during the term of the lease, with an option or right of first refusal to purchase the leased property. The Company’s single-tenant net leases generally require the lessee to pay minimum rent and all taxes (including property tax), insurance, maintenance and other operating costs associated with the leased property.
The Company's leases typically have escalators that are either based on a stated percentage or an index such as consumer price index ("CPI"). In addition, most of the Company's leases include nonlease components, such as reimbursement of operating expenses as additional rent, or include the reimbursement of expected operating expenses as part of the lease payment. The Company adopted an accounting policy to combine lease and nonlease components. Rent escalators based on indices and reimbursements of operating expenses that are not included in the lease rate are considered variable lease payments. Variable payments are recognized in the period earned. Lease income for the Company's operating leases recognized for the three and six months ended June 30, 2021 was $128.5 million and $256.9 million, respectively.
Future lease payments under the non-cancelable operating leases, excluding any reimbursements, as of June 30, 2021 were as follows:
In thousandsOPERATING
2021$197,162 
2022364,748 
2023316,864 
2024249,638 
2025199,827 
2026 and thereafter553,214 
$1,881,453 
Lessee Accounting
As of June 30, 2021, the Company was obligated, as the lessee, under operating lease agreements consisting primarily of the Company’s ground leases. As of June 30, 2021, the Company had 105 properties totaling 8.8 million square feet that were held under ground leases. Some of the ground lease renewal terms are based on fixed rent renewal terms and others have market rent renewal terms. These ground leases typically have initial terms of 40 to 99 years with expiration dates through 2119. Any rental increases related to the Company’s ground leases are generally either stated or based on CPI. The Company had 43 prepaid ground leases as of June 30, 2021. The amortization of the prepaid rent, included in the operating lease right-of-use asset, represented approximately $0.1 million and $0.2 million of the Company’s rental expense for the three months ended June 30, 2021 and 2020, respectively, and $0.3 million for the six months ended June 30, 2021 and 2020, respectively.
The Company’s future lease payments (primarily for its 62 non-prepaid ground leases) as of June 30, 2021 were as follows:
In thousandsOPERATINGFINANCING
2021$2,049 $290 
20224,932 783 
20234,971 793 
20245,027 815 
20255,068 826 
2026 and thereafter303,574 87,983 
Total undiscounted lease payments325,621 91,490 
Discount(233,511)(72,842)
Lease liabilities$92,110 $18,648 
The following table provides details of the Company's total lease expense for the three and six months ended June 30, 2021 and 2020:
THREE MONTHS ENDED
June 30,		SIX MONTHS ENDED
June 30,
In thousands2021202020212020
Operating lease cost
Operating lease expense$1,182 $1,175 $2,360 $2,349 
Variable lease expense972 804 1,868 1,604 
Finance lease cost
Amortization of right-of-use assets88 78 176 148 
Interest on lease liabilities247 240 493 477 
Total lease expense$2,489 $2,297 $4,897 $4,578 
Other information
Operating cash flows outflows related to operating leases$2,587 $1,416 $4,431 $3,972 
Financing cash flows outflows related to financing leases$321 $2,847 $683 $3,168 
Right-of-use assets obtained in exchange for new finance lease liabilities$— $7,212 $— $7,212 
Weighted-average remaining lease term (excluding renewal options) - operating leases48.149.1
Weighted-average remaining lease term (excluding renewal options) - finance leases64.565.0
Weighted-average discount rate - operating leases5.7 %5.7 %
Weighted-average discount rate - finance leases5.4 %5.4 %