Leases

3 Months Ended

Mar. 31, 2020

Leases [Abstract]

Leases

Leases

The Account’s wholly-owned real estate properties are leased to tenants under operating lease agreements which expire on various dates through 2051. Rental income is recognized in accordance with the billing terms of the lease agreements. The leases do not have material variable payments, material residual value guarantees or material restrictive covenants. Certain leases have the option to extend or terminate at the tenant's discretion, with termination options resulting in additional fees due to the Account. Aggregate minimum annual rentals for wholly-owned real estate investments owned by the Account through the non-cancelable lease term, excluding short-term residential leases, as of March 31, 2020 (unaudited) and December 31, 2019 are as follows (millions):

	As of
Years Ended	March 31, 2020			December 31, 2019
2020	$	486.2	(1)	$	550.4
2021	593.9			505.0
2022	512.9			442.1
2023	437.7			381.2
2024	360.6			316.6
Thereafter	1,209.5			1,078.4
Total	$	3,600.8		$	3,273.7

⁽¹⁾ Representative of minimum rents owed for the remaining months of the calendar year ending December 31, 2020.

Certain leases provide for additional rental amounts based upon the recovery of actual operating expenses in excess of specified base amounts, sales volume or contractual increases as defined in the lease agreement. These contractual contingent rentals are not included in the table above.

The Account has ground leases for which the Account is the lessee. The leases do not contain material residual value guarantees or material restrictive covenants. The fair value of right-of-use assets and leases liabilities related to ground leases are reflected on the balance sheet within other assets and other liabilities, respectively.

The fair values and key terms of the right-of-use assets and lease liabilities related to the Account's ground leases are as follows (millions):

	As of
	March 31, 2020		December 31, 2019
	(Unaudited)
Assets:
Right-of-use assets, at fair value	$	25.8	$	25.7
Liabilities:
Ground lease liabilities, at fair value	$	25.8	$	25.7

	As of
	March 31, 2020		December 31, 2019
Key Terms:	(Unaudited)
Weighted-average remaining lease term (years)	83.9		84.4
Weighted-average discount rate(1)	6.16	%	6.15	%

⁽¹⁾ Discount rates are reflective of the rates utilized during the most recent appraisal of the associated real estate investments.

For the three months ended March 31, 2020, operating lease costs related to ground leases were $0.4 million. These costs include variable lease costs, which are immaterial. Aggregate future minimum annual payments for ground leases held by the Account are as follows (millions):

	As of
Years Ended	March 31, 2020			December 31, 2019
	(Unaudited)
2020(1)	$	0.9	(1)	$	1.2
2021	1.2			1.2
2022	1.2			1.2
2023	1.2			1.2
2024	1.3			1.3
Thereafter	375.9			375.9
Total	$	381.7		$	382.0

⁽¹⁾ Representative of minimum rents owed for the remaining months of the calendar year ending December 31, 2020.

Leases

Leases

The Account’s wholly-owned real estate properties are leased to tenants under operating lease agreements which expire on various dates through 2051. Rental income is recognized in accordance with the billing terms of the lease agreements. The leases do not have material variable payments, material residual value guarantees or material restrictive covenants. Certain leases have the option to extend or terminate at the tenant's discretion, with termination options resulting in additional fees due to the Account. Aggregate minimum annual rentals for wholly-owned real estate investments owned by the Account through the non-cancelable lease term, excluding short-term residential leases, as of March 31, 2020 (unaudited) and December 31, 2019 are as follows (millions):

	As of
Years Ended	March 31, 2020			December 31, 2019
2020	$	486.2	(1)	$	550.4
2021	593.9			505.0
2022	512.9			442.1
2023	437.7			381.2
2024	360.6			316.6
Thereafter	1,209.5			1,078.4
Total	$	3,600.8		$	3,273.7

⁽¹⁾ Representative of minimum rents owed for the remaining months of the calendar year ending December 31, 2020.

Certain leases provide for additional rental amounts based upon the recovery of actual operating expenses in excess of specified base amounts, sales volume or contractual increases as defined in the lease agreement. These contractual contingent rentals are not included in the table above.

The Account has ground leases for which the Account is the lessee. The leases do not contain material residual value guarantees or material restrictive covenants. The fair value of right-of-use assets and leases liabilities related to ground leases are reflected on the balance sheet within other assets and other liabilities, respectively.

The fair values and key terms of the right-of-use assets and lease liabilities related to the Account's ground leases are as follows (millions):

	As of
	March 31, 2020		December 31, 2019
	(Unaudited)
Assets:
Right-of-use assets, at fair value	$	25.8	$	25.7
Liabilities:
Ground lease liabilities, at fair value	$	25.8	$	25.7

	As of
	March 31, 2020		December 31, 2019
Key Terms:	(Unaudited)
Weighted-average remaining lease term (years)	83.9		84.4
Weighted-average discount rate(1)	6.16	%	6.15	%

⁽¹⁾ Discount rates are reflective of the rates utilized during the most recent appraisal of the associated real estate investments.

For the three months ended March 31, 2020, operating lease costs related to ground leases were $0.4 million. These costs include variable lease costs, which are immaterial. Aggregate future minimum annual payments for ground leases held by the Account are as follows (millions):

	As of
Years Ended	March 31, 2020			December 31, 2019
	(Unaudited)
2020(1)	$	0.9	(1)	$	1.2
2021	1.2			1.2
2022	1.2			1.2
2023	1.2			1.2
2024	1.3			1.3
Thereafter	375.9			375.9
Total	$	381.7		$	382.0

⁽¹⁾ Representative of minimum rents owed for the remaining months of the calendar year ending December 31, 2020.