Leases
|
9 Months Ended |
Sep. 30, 2024 |
|---|
| 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 leases. 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 |
2024 |
|
2023 |
|
2024 |
|
2023 |
| Fixed |
$ |
129,357 |
|
|
$ |
120,408 |
|
|
$ |
382,918 |
|
|
$ |
354,908 |
|
| Variable |
41,192 |
|
|
34,860 |
|
|
118,683 |
|
|
104,602 |
|
|
$ |
170,549 |
|
|
$ |
155,268 |
|
|
$ |
501,601 |
|
|
$ |
459,510 |
|
Lessee Arrangements
As of September 30, 2024, our balance sheet included $43.0 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 and property lease liabilities on our consolidated balance sheets consisted of the following (in thousands):
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
| Leases |
|
Balance Sheet Location |
|
September 30,
2024 |
|
December 31,
2023 |
| Right-of-use assets |
|
|
|
|
|
|
| Operating leases - Property |
|
Property - operating right-of-use assets |
|
$ |
40,523 |
|
|
$ |
41,296 |
|
| Finance leases - Property |
|
Prepaid expenses and other assets, net |
|
2,510 |
|
|
2,565 |
|
| Total right-of-use assets |
|
|
|
$ |
43,033 |
|
|
$ |
43,861 |
|
| Lease liabilities |
|
|
|
|
|
|
| Operating leases - Property |
|
Property - operating lease liabilities |
|
$ |
33,615 |
|
|
$ |
33,931 |
|
| Finance leases - Property |
|
Other liabilities |
|
397 |
|
|
415 |
|
| Total lease liabilities |
|
|
|
$ |
34,012 |
|
|
$ |
34,346 |
|
As of September 30, 2024, our operating leases had a weighted average remaining lease term of 53 years and a weighted average discount rate of 7.36%, while our finance leases had a weighted average remaining lease term of eight years and a weighted average discount rate of 9.14%. 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 |
|
|
2024 |
|
2023 |
|
2024 |
|
2023 |
| Operating lease cost |
|
|
|
|
|
|
|
|
|
|
| Property leases - fixed |
|
Property operating expenses |
|
$ |
1,929 |
|
|
$ |
1,808 |
|
|
$ |
5,687 |
|
|
$ |
5,146 |
|
| Property leases - variable |
|
Property operating expenses |
|
42 |
|
|
17 |
|
|
219 |
|
|
50 |
|
| Finance lease cost |
|
|
|
|
|
|
|
|
|
|
| Amortization of property right-of-use assets |
|
Property operating expenses |
|
19 |
|
|
18 |
|
|
56 |
|
|
57 |
|
| Interest on lease liabilities |
|
Interest expense |
|
9 |
|
|
10 |
|
|
28 |
|
|
33 |
|
|
|
|
|
$ |
1,999 |
|
|
$ |
1,853 |
|
|
$ |
5,990 |
|
|
$ |
5,286 |
|
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 |
|
|
2024 |
|
2023 |
| Cash paid for amounts included in the measurement of lease liabilities: |
|
|
|
|
|
| Operating cash flows for operating leases |
|
|
$ |
5,232 |
|
|
$ |
4,432 |
|
| Operating cash flows for financing leases |
|
|
$ |
28 |
|
|
$ |
33 |
|
| Financing cash flows for financing leases |
|
|
$ |
18 |
|
|
$ |
14 |
|
|
|
|
|
|
|
|
|
|
|
|
|
Payments on property leases were due as follows (in thousands):
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
September 30, 2024 |
|
|
|
|
|
|
| Year Ending December 31, |
|
Operating Leases |
|
Finance Leases |
|
|
|
|
|
|
|
|
2024 (1) |
|
$ |
1,746 |
|
|
$ |
15 |
|
|
|
|
|
|
|
|
|
| 2025 |
|
2,589 |
|
|
63 |
|
|
|
|
|
|
|
|
|
| 2026 |
|
2,001 |
|
|
65 |
|
|
|
|
|
|
|
|
|
| 2027 |
|
2,016 |
|
|
67 |
|
|
|
|
|
|
|
|
|
| 2028 |
|
2,032 |
|
|
69 |
|
|
|
|
|
|
|
|
|
| Thereafter |
|
153,349 |
|
|
297 |
|
|
|
|
|
|
|
|
|
| Total lease payments |
|
163,733 |
|
|
576 |
|
|
|
|
|
|
|
|
|
| Less: Amount representing interest |
|
(130,118) |
|
|
(179) |
|
|
|
|
|
|
|
|
|
| Lease liability |
|
$ |
33,615 |
|
|
$ |
397 |
|
|
|
|
|
|
|
|
|
(1)Represents the three months ending December 31, 2024.
|
| 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 leases. 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 |
2024 |
|
2023 |
|
2024 |
|
2023 |
| Fixed |
$ |
129,357 |
|
|
$ |
120,408 |
|
|
$ |
382,918 |
|
|
$ |
354,908 |
|
| Variable |
41,192 |
|
|
34,860 |
|
|
118,683 |
|
|
104,602 |
|
|
$ |
170,549 |
|
|
$ |
155,268 |
|
|
$ |
501,601 |
|
|
$ |
459,510 |
|
Lessee Arrangements
As of September 30, 2024, our balance sheet included $43.0 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 and property lease liabilities on our consolidated balance sheets consisted of the following (in thousands):
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
| Leases |
|
Balance Sheet Location |
|
September 30,
2024 |
|
December 31,
2023 |
| Right-of-use assets |
|
|
|
|
|
|
| Operating leases - Property |
|
Property - operating right-of-use assets |
|
$ |
40,523 |
|
|
$ |
41,296 |
|
| Finance leases - Property |
|
Prepaid expenses and other assets, net |
|
2,510 |
|
|
2,565 |
|
| Total right-of-use assets |
|
|
|
$ |
43,033 |
|
|
$ |
43,861 |
|
| Lease liabilities |
|
|
|
|
|
|
| Operating leases - Property |
|
Property - operating lease liabilities |
|
$ |
33,615 |
|
|
$ |
33,931 |
|
| Finance leases - Property |
|
Other liabilities |
|
397 |
|
|
415 |
|
| Total lease liabilities |
|
|
|
$ |
34,012 |
|
|
$ |
34,346 |
|
As of September 30, 2024, our operating leases had a weighted average remaining lease term of 53 years and a weighted average discount rate of 7.36%, while our finance leases had a weighted average remaining lease term of eight years and a weighted average discount rate of 9.14%. 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 |
|
|
2024 |
|
2023 |
|
2024 |
|
2023 |
| Operating lease cost |
|
|
|
|
|
|
|
|
|
|
| Property leases - fixed |
|
Property operating expenses |
|
$ |
1,929 |
|
|
$ |
1,808 |
|
|
$ |
5,687 |
|
|
$ |
5,146 |
|
| Property leases - variable |
|
Property operating expenses |
|
42 |
|
|
17 |
|
|
219 |
|
|
50 |
|
| Finance lease cost |
|
|
|
|
|
|
|
|
|
|
| Amortization of property right-of-use assets |
|
Property operating expenses |
|
19 |
|
|
18 |
|
|
56 |
|
|
57 |
|
| Interest on lease liabilities |
|
Interest expense |
|
9 |
|
|
10 |
|
|
28 |
|
|
33 |
|
|
|
|
|
$ |
1,999 |
|
|
$ |
1,853 |
|
|
$ |
5,990 |
|
|
$ |
5,286 |
|
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 |
|
|
2024 |
|
2023 |
| Cash paid for amounts included in the measurement of lease liabilities: |
|
|
|
|
|
| Operating cash flows for operating leases |
|
|
$ |
5,232 |
|
|
$ |
4,432 |
|
| Operating cash flows for financing leases |
|
|
$ |
28 |
|
|
$ |
33 |
|
| Financing cash flows for financing leases |
|
|
$ |
18 |
|
|
$ |
14 |
|
|
|
|
|
|
|
|
|
|
|
|
|
Payments on property leases were due as follows (in thousands):
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
September 30, 2024 |
|
|
|
|
|
|
| Year Ending December 31, |
|
Operating Leases |
|
Finance Leases |
|
|
|
|
|
|
|
|
2024 (1) |
|
$ |
1,746 |
|
|
$ |
15 |
|
|
|
|
|
|
|
|
|
| 2025 |
|
2,589 |
|
|
63 |
|
|
|
|
|
|
|
|
|
| 2026 |
|
2,001 |
|
|
65 |
|
|
|
|
|
|
|
|
|
| 2027 |
|
2,016 |
|
|
67 |
|
|
|
|
|
|
|
|
|
| 2028 |
|
2,032 |
|
|
69 |
|
|
|
|
|
|
|
|
|
| Thereafter |
|
153,349 |
|
|
297 |
|
|
|
|
|
|
|
|
|
| Total lease payments |
|
163,733 |
|
|
576 |
|
|
|
|
|
|
|
|
|
| Less: Amount representing interest |
|
(130,118) |
|
|
(179) |
|
|
|
|
|
|
|
|
|
| Lease liability |
|
$ |
33,615 |
|
|
$ |
397 |
|
|
|
|
|
|
|
|
|
(1)Represents the three months ending December 31, 2024.
|
| 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 leases. 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 |
2024 |
|
2023 |
|
2024 |
|
2023 |
| Fixed |
$ |
129,357 |
|
|
$ |
120,408 |
|
|
$ |
382,918 |
|
|
$ |
354,908 |
|
| Variable |
41,192 |
|
|
34,860 |
|
|
118,683 |
|
|
104,602 |
|
|
$ |
170,549 |
|
|
$ |
155,268 |
|
|
$ |
501,601 |
|
|
$ |
459,510 |
|
Lessee Arrangements
As of September 30, 2024, our balance sheet included $43.0 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 and property lease liabilities on our consolidated balance sheets consisted of the following (in thousands):
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
| Leases |
|
Balance Sheet Location |
|
September 30,
2024 |
|
December 31,
2023 |
| Right-of-use assets |
|
|
|
|
|
|
| Operating leases - Property |
|
Property - operating right-of-use assets |
|
$ |
40,523 |
|
|
$ |
41,296 |
|
| Finance leases - Property |
|
Prepaid expenses and other assets, net |
|
2,510 |
|
|
2,565 |
|
| Total right-of-use assets |
|
|
|
$ |
43,033 |
|
|
$ |
43,861 |
|
| Lease liabilities |
|
|
|
|
|
|
| Operating leases - Property |
|
Property - operating lease liabilities |
|
$ |
33,615 |
|
|
$ |
33,931 |
|
| Finance leases - Property |
|
Other liabilities |
|
397 |
|
|
415 |
|
| Total lease liabilities |
|
|
|
$ |
34,012 |
|
|
$ |
34,346 |
|
As of September 30, 2024, our operating leases had a weighted average remaining lease term of 53 years and a weighted average discount rate of 7.36%, while our finance leases had a weighted average remaining lease term of eight years and a weighted average discount rate of 9.14%. 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 |
|
|
2024 |
|
2023 |
|
2024 |
|
2023 |
| Operating lease cost |
|
|
|
|
|
|
|
|
|
|
| Property leases - fixed |
|
Property operating expenses |
|
$ |
1,929 |
|
|
$ |
1,808 |
|
|
$ |
5,687 |
|
|
$ |
5,146 |
|
| Property leases - variable |
|
Property operating expenses |
|
42 |
|
|
17 |
|
|
219 |
|
|
50 |
|
| Finance lease cost |
|
|
|
|
|
|
|
|
|
|
| Amortization of property right-of-use assets |
|
Property operating expenses |
|
19 |
|
|
18 |
|
|
56 |
|
|
57 |
|
| Interest on lease liabilities |
|
Interest expense |
|
9 |
|
|
10 |
|
|
28 |
|
|
33 |
|
|
|
|
|
$ |
1,999 |
|
|
$ |
1,853 |
|
|
$ |
5,990 |
|
|
$ |
5,286 |
|
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 |
|
|
2024 |
|
2023 |
| Cash paid for amounts included in the measurement of lease liabilities: |
|
|
|
|
|
| Operating cash flows for operating leases |
|
|
$ |
5,232 |
|
|
$ |
4,432 |
|
| Operating cash flows for financing leases |
|
|
$ |
28 |
|
|
$ |
33 |
|
| Financing cash flows for financing leases |
|
|
$ |
18 |
|
|
$ |
14 |
|
|
|
|
|
|
|
|
|
|
|
|
|
Payments on property leases were due as follows (in thousands):
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
September 30, 2024 |
|
|
|
|
|
|
| Year Ending December 31, |
|
Operating Leases |
|
Finance Leases |
|
|
|
|
|
|
|
|
2024 (1) |
|
$ |
1,746 |
|
|
$ |
15 |
|
|
|
|
|
|
|
|
|
| 2025 |
|
2,589 |
|
|
63 |
|
|
|
|
|
|
|
|
|
| 2026 |
|
2,001 |
|
|
65 |
|
|
|
|
|
|
|
|
|
| 2027 |
|
2,016 |
|
|
67 |
|
|
|
|
|
|
|
|
|
| 2028 |
|
2,032 |
|
|
69 |
|
|
|
|
|
|
|
|
|
| Thereafter |
|
153,349 |
|
|
297 |
|
|
|
|
|
|
|
|
|
| Total lease payments |
|
163,733 |
|
|
576 |
|
|
|
|
|
|
|
|
|
| Less: Amount representing interest |
|
(130,118) |
|
|
(179) |
|
|
|
|
|
|
|
|
|
| Lease liability |
|
$ |
33,615 |
|
|
$ |
397 |
|
|
|
|
|
|
|
|
|
(1)Represents the three months ending December 31, 2024.
|