Quarterly report pursuant to Section 13 or 15(d)

Leases

v3.21.2
Leases
9 Months Ended
Sep. 30, 2021
Leases [Abstract]  
Leases Leases
Lessor Arrangements

We lease real estate properties, comprised primarily of office properties and data center shells, to third parties. These leases encompass all, or a portion, of properties, with various expiration dates. Our lease revenue is comprised of: fixed lease revenue, including contractual rent billings under leases recognized on a straight-line basis over lease terms and amortization of lease incentives and above- and below- market lease intangibles; and variable lease revenue, including tenant expense recoveries, lease termination revenue and other revenue from tenants that is not fixed under the lease. The table below sets forth our composition of lease revenue recognized between fixed and variable lease revenue (in thousands):
For the Three Months Ended September 30, For the Nine Months Ended September 30,
Lease revenue 2021 2020 2021 2020
Fixed $ 114,309  $ 106,743  $ 340,157  $ 314,845 
Variable 31,440  27,132  93,874  82,189 
$ 145,749  $ 133,875  $ 434,031  $ 397,034 

Fixed contractual payments due under our property leases were as follows (in thousands):

As of September 30, 2021
Year Ending December 31, Operating leases Sales-type leases
2021 (1) $ 109,800  $ 221 
2022 418,746  960 
2023 370,652  960 
2024 323,198  960 
2025 241,090  960 
Thereafter 1,020,675  4,516 
Total contractual payments $ 2,484,161  8,577 
Less: Amount representing interest (2,277)
Net investment in sales-type leases $ 6,300 

(1)Represents the three months ending December 31, 2021.

Lessee Arrangements

As of September 30, 2021, our balance sheet included $78.9 million in right-of-use assets associated primarily with land leased from third parties underlying certain properties that we are operating with various expiration dates. Our property right-of-use assets consisted of the following (in thousands):
Leases Balance Sheet Location September 30, 2021 December 31, 2020
Right-of-use assets
Operating leases - Property Property - operating right-of-use assets $ 38,854  $ 40,570 
Finance leases - Property (1) Property - finance right-of-use assets 40,077  40,425 
Total right-of-use assets $ 78,931  $ 80,995 

(1)On October 22, 2021, we acquired land leased in Washington, D.C., for which we had a $37.8 million right-of-use asset as of September 30, 2021, for a nominal amount under a bargain purchase option.

Property lease liabilities consisted of the following (in thousands):
Leases Balance Sheet Location September 30, 2021 December 31, 2020
Lease liabilities
Operating leases - Property Property - operating lease liabilities $ 29,630  $ 30,746 
Finance leases - Property Other liabilities 14  28 
Total lease liabilities $ 29,644  $ 30,774 
The table below sets forth the weighted average terms and discount rates of our property leases as of September 30, 2021:
Weighted average remaining lease term
Operating leases 51 years
Finance leases
< 1 year
Weighted average discount rate
Operating leases 7.16  %
Finance leases 3.62  %

The table below presents our total property lease cost (in thousands):
Statement of Operations Location For the Three Months Ended September 30, For the Nine Months Ended September 30,
Lease cost 2021 2020 2021 2020
Operating lease cost
Property leases - fixed Property operating expenses $ 1,013  $ 598  $ 2,999  $ 1,465 
Property leases - variable Property operating expenses 11  107  31  116 
Finance lease cost
Amortization of property right-of-use assets
Property operating expenses 23  27 
$ 1,029  $ 714  $ 3,053  $ 1,608 

The table below presents the effect of property lease payments on our consolidated statements of cash flows (in thousands):
For the Nine Months Ended September 30,
Supplemental cash flow information 2021 2020
Cash paid for amounts included in the measurement of lease liabilities:
Operating cash flows for operating leases
$ 2,399  $ 987 
Financing cash flows for financing leases
$ 14  $ 674 

Payments on property leases were due as follows (in thousands):
As of September 30, 2021
Year Ending December 31,  Operating leases Finance
leases
Total
2021 (1) $ 807  $ —  $ 807 
2022 3,297  14  3,311 
2023 3,352  —  3,352 
2024 3,403  —  3,403 
2025 1,749  —  1,749 
Thereafter 123,979  —  123,979 
Total lease payments 136,587  14  136,601 
Less: Amount representing interest (106,957) —  (106,957)
Lease liability $ 29,630  $ 14  $ 29,644 

(1)Represents the three months ending December 31, 2021.
Leases Leases
Lessor Arrangements

We lease real estate properties, comprised primarily of office properties and data center shells, to third parties. These leases encompass all, or a portion, of properties, with various expiration dates. Our lease revenue is comprised of: fixed lease revenue, including contractual rent billings under leases recognized on a straight-line basis over lease terms and amortization of lease incentives and above- and below- market lease intangibles; and variable lease revenue, including tenant expense recoveries, lease termination revenue and other revenue from tenants that is not fixed under the lease. The table below sets forth our composition of lease revenue recognized between fixed and variable lease revenue (in thousands):
For the Three Months Ended September 30, For the Nine Months Ended September 30,
Lease revenue 2021 2020 2021 2020
Fixed $ 114,309  $ 106,743  $ 340,157  $ 314,845 
Variable 31,440  27,132  93,874  82,189 
$ 145,749  $ 133,875  $ 434,031  $ 397,034 

Fixed contractual payments due under our property leases were as follows (in thousands):

As of September 30, 2021
Year Ending December 31, Operating leases Sales-type leases
2021 (1) $ 109,800  $ 221 
2022 418,746  960 
2023 370,652  960 
2024 323,198  960 
2025 241,090  960 
Thereafter 1,020,675  4,516 
Total contractual payments $ 2,484,161  8,577 
Less: Amount representing interest (2,277)
Net investment in sales-type leases $ 6,300 

(1)Represents the three months ending December 31, 2021.

Lessee Arrangements

As of September 30, 2021, our balance sheet included $78.9 million in right-of-use assets associated primarily with land leased from third parties underlying certain properties that we are operating with various expiration dates. Our property right-of-use assets consisted of the following (in thousands):
Leases Balance Sheet Location September 30, 2021 December 31, 2020
Right-of-use assets
Operating leases - Property Property - operating right-of-use assets $ 38,854  $ 40,570 
Finance leases - Property (1) Property - finance right-of-use assets 40,077  40,425 
Total right-of-use assets $ 78,931  $ 80,995 

(1)On October 22, 2021, we acquired land leased in Washington, D.C., for which we had a $37.8 million right-of-use asset as of September 30, 2021, for a nominal amount under a bargain purchase option.

Property lease liabilities consisted of the following (in thousands):
Leases Balance Sheet Location September 30, 2021 December 31, 2020
Lease liabilities
Operating leases - Property Property - operating lease liabilities $ 29,630  $ 30,746 
Finance leases - Property Other liabilities 14  28 
Total lease liabilities $ 29,644  $ 30,774 
The table below sets forth the weighted average terms and discount rates of our property leases as of September 30, 2021:
Weighted average remaining lease term
Operating leases 51 years
Finance leases
< 1 year
Weighted average discount rate
Operating leases 7.16  %
Finance leases 3.62  %

The table below presents our total property lease cost (in thousands):
Statement of Operations Location For the Three Months Ended September 30, For the Nine Months Ended September 30,
Lease cost 2021 2020 2021 2020
Operating lease cost
Property leases - fixed Property operating expenses $ 1,013  $ 598  $ 2,999  $ 1,465 
Property leases - variable Property operating expenses 11  107  31  116 
Finance lease cost
Amortization of property right-of-use assets
Property operating expenses 23  27 
$ 1,029  $ 714  $ 3,053  $ 1,608 

The table below presents the effect of property lease payments on our consolidated statements of cash flows (in thousands):
For the Nine Months Ended September 30,
Supplemental cash flow information 2021 2020
Cash paid for amounts included in the measurement of lease liabilities:
Operating cash flows for operating leases
$ 2,399  $ 987 
Financing cash flows for financing leases
$ 14  $ 674 

Payments on property leases were due as follows (in thousands):
As of September 30, 2021
Year Ending December 31,  Operating leases Finance
leases
Total
2021 (1) $ 807  $ —  $ 807 
2022 3,297  14  3,311 
2023 3,352  —  3,352 
2024 3,403  —  3,403 
2025 1,749  —  1,749 
Thereafter 123,979  —  123,979 
Total lease payments 136,587  14  136,601 
Less: Amount representing interest (106,957) —  (106,957)
Lease liability $ 29,630  $ 14  $ 29,644 

(1)Represents the three months ending December 31, 2021.
Leases Leases
Lessor Arrangements

We lease real estate properties, comprised primarily of office properties and data center shells, to third parties. These leases encompass all, or a portion, of properties, with various expiration dates. Our lease revenue is comprised of: fixed lease revenue, including contractual rent billings under leases recognized on a straight-line basis over lease terms and amortization of lease incentives and above- and below- market lease intangibles; and variable lease revenue, including tenant expense recoveries, lease termination revenue and other revenue from tenants that is not fixed under the lease. The table below sets forth our composition of lease revenue recognized between fixed and variable lease revenue (in thousands):
For the Three Months Ended September 30, For the Nine Months Ended September 30,
Lease revenue 2021 2020 2021 2020
Fixed $ 114,309  $ 106,743  $ 340,157  $ 314,845 
Variable 31,440  27,132  93,874  82,189 
$ 145,749  $ 133,875  $ 434,031  $ 397,034 

Fixed contractual payments due under our property leases were as follows (in thousands):

As of September 30, 2021
Year Ending December 31, Operating leases Sales-type leases
2021 (1) $ 109,800  $ 221 
2022 418,746  960 
2023 370,652  960 
2024 323,198  960 
2025 241,090  960 
Thereafter 1,020,675  4,516 
Total contractual payments $ 2,484,161  8,577 
Less: Amount representing interest (2,277)
Net investment in sales-type leases $ 6,300 

(1)Represents the three months ending December 31, 2021.

Lessee Arrangements

As of September 30, 2021, our balance sheet included $78.9 million in right-of-use assets associated primarily with land leased from third parties underlying certain properties that we are operating with various expiration dates. Our property right-of-use assets consisted of the following (in thousands):
Leases Balance Sheet Location September 30, 2021 December 31, 2020
Right-of-use assets
Operating leases - Property Property - operating right-of-use assets $ 38,854  $ 40,570 
Finance leases - Property (1) Property - finance right-of-use assets 40,077  40,425 
Total right-of-use assets $ 78,931  $ 80,995 

(1)On October 22, 2021, we acquired land leased in Washington, D.C., for which we had a $37.8 million right-of-use asset as of September 30, 2021, for a nominal amount under a bargain purchase option.

Property lease liabilities consisted of the following (in thousands):
Leases Balance Sheet Location September 30, 2021 December 31, 2020
Lease liabilities
Operating leases - Property Property - operating lease liabilities $ 29,630  $ 30,746 
Finance leases - Property Other liabilities 14  28 
Total lease liabilities $ 29,644  $ 30,774 
The table below sets forth the weighted average terms and discount rates of our property leases as of September 30, 2021:
Weighted average remaining lease term
Operating leases 51 years
Finance leases
< 1 year
Weighted average discount rate
Operating leases 7.16  %
Finance leases 3.62  %

The table below presents our total property lease cost (in thousands):
Statement of Operations Location For the Three Months Ended September 30, For the Nine Months Ended September 30,
Lease cost 2021 2020 2021 2020
Operating lease cost
Property leases - fixed Property operating expenses $ 1,013  $ 598  $ 2,999  $ 1,465 
Property leases - variable Property operating expenses 11  107  31  116 
Finance lease cost
Amortization of property right-of-use assets
Property operating expenses 23  27 
$ 1,029  $ 714  $ 3,053  $ 1,608 

The table below presents the effect of property lease payments on our consolidated statements of cash flows (in thousands):
For the Nine Months Ended September 30,
Supplemental cash flow information 2021 2020
Cash paid for amounts included in the measurement of lease liabilities:
Operating cash flows for operating leases
$ 2,399  $ 987 
Financing cash flows for financing leases
$ 14  $ 674 

Payments on property leases were due as follows (in thousands):
As of September 30, 2021
Year Ending December 31,  Operating leases Finance
leases
Total
2021 (1) $ 807  $ —  $ 807 
2022 3,297  14  3,311 
2023 3,352  —  3,352 
2024 3,403  —  3,403 
2025 1,749  —  1,749 
Thereafter 123,979  —  123,979 
Total lease payments 136,587  14  136,601 
Less: Amount representing interest (106,957) —  (106,957)
Lease liability $ 29,630  $ 14  $ 29,644 

(1)Represents the three months ending December 31, 2021.
Leases Leases
Lessor Arrangements

We lease real estate properties, comprised primarily of office properties and data center shells, to third parties. These leases encompass all, or a portion, of properties, with various expiration dates. Our lease revenue is comprised of: fixed lease revenue, including contractual rent billings under leases recognized on a straight-line basis over lease terms and amortization of lease incentives and above- and below- market lease intangibles; and variable lease revenue, including tenant expense recoveries, lease termination revenue and other revenue from tenants that is not fixed under the lease. The table below sets forth our composition of lease revenue recognized between fixed and variable lease revenue (in thousands):
For the Three Months Ended September 30, For the Nine Months Ended September 30,
Lease revenue 2021 2020 2021 2020
Fixed $ 114,309  $ 106,743  $ 340,157  $ 314,845 
Variable 31,440  27,132  93,874  82,189 
$ 145,749  $ 133,875  $ 434,031  $ 397,034 

Fixed contractual payments due under our property leases were as follows (in thousands):

As of September 30, 2021
Year Ending December 31, Operating leases Sales-type leases
2021 (1) $ 109,800  $ 221 
2022 418,746  960 
2023 370,652  960 
2024 323,198  960 
2025 241,090  960 
Thereafter 1,020,675  4,516 
Total contractual payments $ 2,484,161  8,577 
Less: Amount representing interest (2,277)
Net investment in sales-type leases $ 6,300 

(1)Represents the three months ending December 31, 2021.

Lessee Arrangements

As of September 30, 2021, our balance sheet included $78.9 million in right-of-use assets associated primarily with land leased from third parties underlying certain properties that we are operating with various expiration dates. Our property right-of-use assets consisted of the following (in thousands):
Leases Balance Sheet Location September 30, 2021 December 31, 2020
Right-of-use assets
Operating leases - Property Property - operating right-of-use assets $ 38,854  $ 40,570 
Finance leases - Property (1) Property - finance right-of-use assets 40,077  40,425 
Total right-of-use assets $ 78,931  $ 80,995 

(1)On October 22, 2021, we acquired land leased in Washington, D.C., for which we had a $37.8 million right-of-use asset as of September 30, 2021, for a nominal amount under a bargain purchase option.

Property lease liabilities consisted of the following (in thousands):
Leases Balance Sheet Location September 30, 2021 December 31, 2020
Lease liabilities
Operating leases - Property Property - operating lease liabilities $ 29,630  $ 30,746 
Finance leases - Property Other liabilities 14  28 
Total lease liabilities $ 29,644  $ 30,774 
The table below sets forth the weighted average terms and discount rates of our property leases as of September 30, 2021:
Weighted average remaining lease term
Operating leases 51 years
Finance leases
< 1 year
Weighted average discount rate
Operating leases 7.16  %
Finance leases 3.62  %

The table below presents our total property lease cost (in thousands):
Statement of Operations Location For the Three Months Ended September 30, For the Nine Months Ended September 30,
Lease cost 2021 2020 2021 2020
Operating lease cost
Property leases - fixed Property operating expenses $ 1,013  $ 598  $ 2,999  $ 1,465 
Property leases - variable Property operating expenses 11  107  31  116 
Finance lease cost
Amortization of property right-of-use assets
Property operating expenses 23  27 
$ 1,029  $ 714  $ 3,053  $ 1,608 

The table below presents the effect of property lease payments on our consolidated statements of cash flows (in thousands):
For the Nine Months Ended September 30,
Supplemental cash flow information 2021 2020
Cash paid for amounts included in the measurement of lease liabilities:
Operating cash flows for operating leases
$ 2,399  $ 987 
Financing cash flows for financing leases
$ 14  $ 674 

Payments on property leases were due as follows (in thousands):
As of September 30, 2021
Year Ending December 31,  Operating leases Finance
leases
Total
2021 (1) $ 807  $ —  $ 807 
2022 3,297  14  3,311 
2023 3,352  —  3,352 
2024 3,403  —  3,403 
2025 1,749  —  1,749 
Thereafter 123,979  —  123,979 
Total lease payments 136,587  14  136,601 
Less: Amount representing interest (106,957) —  (106,957)
Lease liability $ 29,630  $ 14  $ 29,644 

(1)Represents the three months ending December 31, 2021.