Annual report [Section 13 and 15(d), not S-K Item 405]

Leases

v3.25.4
Leases
 12 Months Ended
Dec. 31, 2025
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 Years Ended December 31,
Lease revenue 2025 2024 2023
Fixed $ 543,300  $ 513,461  $ 478,585 
Variable 170,880  157,905  141,262 
$ 714,180  $ 671,366  $ 619,847 

A significant concentration of our lease revenue was earned from our largest tenant, the USG, including 37% of our total lease revenue in 2025, 2024 and 2023 and 26% in 2025 and 27% in 2024 and 2023 of our fixed-lease revenue. Our lease revenue from the USG was earned primarily from properties in the Fort George G. Meade and the Baltimore/Washington Corridor (“Fort Meade/BW Corridor”), Lackland Air Force Base and Northern Virginia Defense/IT (“NoVA Defense/IT”) reportable sub-segments (see Note 13).
Fixed contractual payments due under our property leases were as follows (in thousands):
As of December 31, 2025
Year Ending December 31, Operating leases Sales-type leases
2026 $ 506,290  $ 960 
2027 479,574  960 
2028 407,473  960 
2029 337,270  960 
2030 268,762  675 
Thereafter 1,284,857  — 
Total contractual payments $ 3,284,226  4,515 
Less: Amount representing interest (685)
Net investment in sales-type leases (1) $ 3,830 
(1) Included in the line entitled “prepaid expenses and other assets, net” on our consolidated balance sheet.
Lessee Arrangements

As of December 31, 2025, our balance sheet included $55.8 million in right-of-use assets associated primarily with land leased from third parties underlying certain properties that we are operating. The land leases have long durations with remaining terms ranging from 23 to 75 years (excluding extension options). As of December 31, 2025, our right-of-use assets included:

•$17.3 million for land in a business park in Huntsville, Alabama under 26 leases through our LW Redstone Company, LLC joint venture, with remaining terms ranging from 37 to 49 years and options to renew for an additional 25 years that were not included in the term used in determining the asset balance;
•$12.0 million for data center space in Phoenix, Arizona with a remaining term of two years;
•$9.1 million for land underlying operating office properties in Washington, DC under two leases with remaining terms of approximately 74 years;
•$6.3 million for land underlying a parking garage in Baltimore, Maryland under a lease with a remaining term of 23 years and an option to renew for an additional 49 years that was included in the term used in determining the asset balance;
•$8.7 million for land in a research park in College Park, Maryland under five leases through our M Square Associates, LLC joint venture, all of the rent on which was previously paid. These leases had remaining terms ranging from 57 to 75 years; and
•$2.0 million for other land underlying operating properties in our Fort Meade/BW Corridor sub-segment under two leases with remaining terms of approximately 42 years, all of the rent on which was previously paid.

The table below sets forth our property right-of-use assets and property lease liabilities on our consolidated balance sheets (in thousands):
As of December 31,
Leases Balance Sheet Location 2025 2024
Right-of-use assets
Operating leases - Property Property - operating lease right-of-use assets $ 50,383  $ 55,760 
Finance leases - Property Prepaid expenses and other assets, net 5,373  2,491 
Total right-of-use assets $ 55,756  $ 58,251 
Lease liabilities
Operating leases - Property Property - operating lease liabilities $ 45,012  $ 49,240 
Finance leases - Property Other liabilities 363  391 
Total lease liabilities $ 45,375  $ 49,631 
As of December 31, 2025, our operating leases had a weighted average remaining lease term of 41 years and a weighted average discount rate of 7.4%, while our finance leases had a weighted average remaining lease term of seven years and a weighted average discount rate of 9.1%. The table below presents our total property lease cost (in thousands):
Statement of Operations Location For the Years Ended December 31,
Lease cost 2025 2024 2023
Operating lease cost
Property leases - fixed Property operating expenses $ 9,088  $ 7,845  $ 6,955 
Property leases - variable Property operating expenses 108  246  66 
Finance lease cost
Amortization of property right-of-use assets Property operating expenses 76  74  76 
Interest on lease liabilities Interest expense 35  37  42 
$ 9,307  $ 8,202  $ 7,139 

The table below presents the effect of property lease payments on our consolidated statements of cash flows (in thousands):
For the Years Ended December 31,
Supplemental cash flow information 2025 2024 2023
Cash paid for amounts included in the measurement of lease liabilities
Operating cash flows for operating leases $ 7,940  $ 7,002  $ 6,056 
Operating cash flows for finance leases $ 35  $ 37  $ 42 
Financing cash flows for finance leases $ 28  $ 24  $ 20 

Payments on property leases were due as follows (in thousands):
December 31, 2025
Year Ending December 31, Operating Leases Finance Leases
2026 $ 8,218  $ 65 
2027 8,418  67 
2028 2,838  69 
2029 2,094  71 
2030 2,129  73 
Thereafter 151,870  153 
Total lease payments 175,567  498 
Less: Amount representing interest (130,555) (135)
Lease liability $ 45,012  $ 363 
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 Years Ended December 31,
Lease revenue 2025 2024 2023
Fixed $ 543,300  $ 513,461  $ 478,585 
Variable 170,880  157,905  141,262 
$ 714,180  $ 671,366  $ 619,847 

A significant concentration of our lease revenue was earned from our largest tenant, the USG, including 37% of our total lease revenue in 2025, 2024 and 2023 and 26% in 2025 and 27% in 2024 and 2023 of our fixed-lease revenue. Our lease revenue from the USG was earned primarily from properties in the Fort George G. Meade and the Baltimore/Washington Corridor (“Fort Meade/BW Corridor”), Lackland Air Force Base and Northern Virginia Defense/IT (“NoVA Defense/IT”) reportable sub-segments (see Note 13).
Fixed contractual payments due under our property leases were as follows (in thousands):
As of December 31, 2025
Year Ending December 31, Operating leases Sales-type leases
2026 $ 506,290  $ 960 
2027 479,574  960 
2028 407,473  960 
2029 337,270  960 
2030 268,762  675 
Thereafter 1,284,857  — 
Total contractual payments $ 3,284,226  4,515 
Less: Amount representing interest (685)
Net investment in sales-type leases (1) $ 3,830 
(1) Included in the line entitled “prepaid expenses and other assets, net” on our consolidated balance sheet.
Lessee Arrangements

As of December 31, 2025, our balance sheet included $55.8 million in right-of-use assets associated primarily with land leased from third parties underlying certain properties that we are operating. The land leases have long durations with remaining terms ranging from 23 to 75 years (excluding extension options). As of December 31, 2025, our right-of-use assets included:

•$17.3 million for land in a business park in Huntsville, Alabama under 26 leases through our LW Redstone Company, LLC joint venture, with remaining terms ranging from 37 to 49 years and options to renew for an additional 25 years that were not included in the term used in determining the asset balance;
•$12.0 million for data center space in Phoenix, Arizona with a remaining term of two years;
•$9.1 million for land underlying operating office properties in Washington, DC under two leases with remaining terms of approximately 74 years;
•$6.3 million for land underlying a parking garage in Baltimore, Maryland under a lease with a remaining term of 23 years and an option to renew for an additional 49 years that was included in the term used in determining the asset balance;
•$8.7 million for land in a research park in College Park, Maryland under five leases through our M Square Associates, LLC joint venture, all of the rent on which was previously paid. These leases had remaining terms ranging from 57 to 75 years; and
•$2.0 million for other land underlying operating properties in our Fort Meade/BW Corridor sub-segment under two leases with remaining terms of approximately 42 years, all of the rent on which was previously paid.

The table below sets forth our property right-of-use assets and property lease liabilities on our consolidated balance sheets (in thousands):
As of December 31,
Leases Balance Sheet Location 2025 2024
Right-of-use assets
Operating leases - Property Property - operating lease right-of-use assets $ 50,383  $ 55,760 
Finance leases - Property Prepaid expenses and other assets, net 5,373  2,491 
Total right-of-use assets $ 55,756  $ 58,251 
Lease liabilities
Operating leases - Property Property - operating lease liabilities $ 45,012  $ 49,240 
Finance leases - Property Other liabilities 363  391 
Total lease liabilities $ 45,375  $ 49,631 
As of December 31, 2025, our operating leases had a weighted average remaining lease term of 41 years and a weighted average discount rate of 7.4%, while our finance leases had a weighted average remaining lease term of seven years and a weighted average discount rate of 9.1%. The table below presents our total property lease cost (in thousands):
Statement of Operations Location For the Years Ended December 31,
Lease cost 2025 2024 2023
Operating lease cost
Property leases - fixed Property operating expenses $ 9,088  $ 7,845  $ 6,955 
Property leases - variable Property operating expenses 108  246  66 
Finance lease cost
Amortization of property right-of-use assets Property operating expenses 76  74  76 
Interest on lease liabilities Interest expense 35  37  42 
$ 9,307  $ 8,202  $ 7,139 

The table below presents the effect of property lease payments on our consolidated statements of cash flows (in thousands):
For the Years Ended December 31,
Supplemental cash flow information 2025 2024 2023
Cash paid for amounts included in the measurement of lease liabilities
Operating cash flows for operating leases $ 7,940  $ 7,002  $ 6,056 
Operating cash flows for finance leases $ 35  $ 37  $ 42 
Financing cash flows for finance leases $ 28  $ 24  $ 20 

Payments on property leases were due as follows (in thousands):
December 31, 2025
Year Ending December 31, Operating Leases Finance Leases
2026 $ 8,218  $ 65 
2027 8,418  67 
2028 2,838  69 
2029 2,094  71 
2030 2,129  73 
Thereafter 151,870  153 
Total lease payments 175,567  498 
Less: Amount representing interest (130,555) (135)
Lease liability $ 45,012  $ 363 
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 Years Ended December 31,
Lease revenue 2025 2024 2023
Fixed $ 543,300  $ 513,461  $ 478,585 
Variable 170,880  157,905  141,262 
$ 714,180  $ 671,366  $ 619,847 

A significant concentration of our lease revenue was earned from our largest tenant, the USG, including 37% of our total lease revenue in 2025, 2024 and 2023 and 26% in 2025 and 27% in 2024 and 2023 of our fixed-lease revenue. Our lease revenue from the USG was earned primarily from properties in the Fort George G. Meade and the Baltimore/Washington Corridor (“Fort Meade/BW Corridor”), Lackland Air Force Base and Northern Virginia Defense/IT (“NoVA Defense/IT”) reportable sub-segments (see Note 13).
Fixed contractual payments due under our property leases were as follows (in thousands):
As of December 31, 2025
Year Ending December 31, Operating leases Sales-type leases
2026 $ 506,290  $ 960 
2027 479,574  960 
2028 407,473  960 
2029 337,270  960 
2030 268,762  675 
Thereafter 1,284,857  — 
Total contractual payments $ 3,284,226  4,515 
Less: Amount representing interest (685)
Net investment in sales-type leases (1) $ 3,830 
(1) Included in the line entitled “prepaid expenses and other assets, net” on our consolidated balance sheet.
Lessee Arrangements

As of December 31, 2025, our balance sheet included $55.8 million in right-of-use assets associated primarily with land leased from third parties underlying certain properties that we are operating. The land leases have long durations with remaining terms ranging from 23 to 75 years (excluding extension options). As of December 31, 2025, our right-of-use assets included:

•$17.3 million for land in a business park in Huntsville, Alabama under 26 leases through our LW Redstone Company, LLC joint venture, with remaining terms ranging from 37 to 49 years and options to renew for an additional 25 years that were not included in the term used in determining the asset balance;
•$12.0 million for data center space in Phoenix, Arizona with a remaining term of two years;
•$9.1 million for land underlying operating office properties in Washington, DC under two leases with remaining terms of approximately 74 years;
•$6.3 million for land underlying a parking garage in Baltimore, Maryland under a lease with a remaining term of 23 years and an option to renew for an additional 49 years that was included in the term used in determining the asset balance;
•$8.7 million for land in a research park in College Park, Maryland under five leases through our M Square Associates, LLC joint venture, all of the rent on which was previously paid. These leases had remaining terms ranging from 57 to 75 years; and
•$2.0 million for other land underlying operating properties in our Fort Meade/BW Corridor sub-segment under two leases with remaining terms of approximately 42 years, all of the rent on which was previously paid.

The table below sets forth our property right-of-use assets and property lease liabilities on our consolidated balance sheets (in thousands):
As of December 31,
Leases Balance Sheet Location 2025 2024
Right-of-use assets
Operating leases - Property Property - operating lease right-of-use assets $ 50,383  $ 55,760 
Finance leases - Property Prepaid expenses and other assets, net 5,373  2,491 
Total right-of-use assets $ 55,756  $ 58,251 
Lease liabilities
Operating leases - Property Property - operating lease liabilities $ 45,012  $ 49,240 
Finance leases - Property Other liabilities 363  391 
Total lease liabilities $ 45,375  $ 49,631 
As of December 31, 2025, our operating leases had a weighted average remaining lease term of 41 years and a weighted average discount rate of 7.4%, while our finance leases had a weighted average remaining lease term of seven years and a weighted average discount rate of 9.1%. The table below presents our total property lease cost (in thousands):
Statement of Operations Location For the Years Ended December 31,
Lease cost 2025 2024 2023
Operating lease cost
Property leases - fixed Property operating expenses $ 9,088  $ 7,845  $ 6,955 
Property leases - variable Property operating expenses 108  246  66 
Finance lease cost
Amortization of property right-of-use assets Property operating expenses 76  74  76 
Interest on lease liabilities Interest expense 35  37  42 
$ 9,307  $ 8,202  $ 7,139 

The table below presents the effect of property lease payments on our consolidated statements of cash flows (in thousands):
For the Years Ended December 31,
Supplemental cash flow information 2025 2024 2023
Cash paid for amounts included in the measurement of lease liabilities
Operating cash flows for operating leases $ 7,940  $ 7,002  $ 6,056 
Operating cash flows for finance leases $ 35  $ 37  $ 42 
Financing cash flows for finance leases $ 28  $ 24  $ 20 

Payments on property leases were due as follows (in thousands):
December 31, 2025
Year Ending December 31, Operating Leases Finance Leases
2026 $ 8,218  $ 65 
2027 8,418  67 
2028 2,838  69 
2029 2,094  71 
2030 2,129  73 
Thereafter 151,870  153 
Total lease payments 175,567  498 
Less: Amount representing interest (130,555) (135)
Lease liability $ 45,012  $ 363 
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 Years Ended December 31,
Lease revenue 2025 2024 2023
Fixed $ 543,300  $ 513,461  $ 478,585 
Variable 170,880  157,905  141,262 
$ 714,180  $ 671,366  $ 619,847 

A significant concentration of our lease revenue was earned from our largest tenant, the USG, including 37% of our total lease revenue in 2025, 2024 and 2023 and 26% in 2025 and 27% in 2024 and 2023 of our fixed-lease revenue. Our lease revenue from the USG was earned primarily from properties in the Fort George G. Meade and the Baltimore/Washington Corridor (“Fort Meade/BW Corridor”), Lackland Air Force Base and Northern Virginia Defense/IT (“NoVA Defense/IT”) reportable sub-segments (see Note 13).
Fixed contractual payments due under our property leases were as follows (in thousands):
As of December 31, 2025
Year Ending December 31, Operating leases Sales-type leases
2026 $ 506,290  $ 960 
2027 479,574  960 
2028 407,473  960 
2029 337,270  960 
2030 268,762  675 
Thereafter 1,284,857  — 
Total contractual payments $ 3,284,226  4,515 
Less: Amount representing interest (685)
Net investment in sales-type leases (1) $ 3,830 
(1) Included in the line entitled “prepaid expenses and other assets, net” on our consolidated balance sheet.
Lessee Arrangements

As of December 31, 2025, our balance sheet included $55.8 million in right-of-use assets associated primarily with land leased from third parties underlying certain properties that we are operating. The land leases have long durations with remaining terms ranging from 23 to 75 years (excluding extension options). As of December 31, 2025, our right-of-use assets included:

•$17.3 million for land in a business park in Huntsville, Alabama under 26 leases through our LW Redstone Company, LLC joint venture, with remaining terms ranging from 37 to 49 years and options to renew for an additional 25 years that were not included in the term used in determining the asset balance;
•$12.0 million for data center space in Phoenix, Arizona with a remaining term of two years;
•$9.1 million for land underlying operating office properties in Washington, DC under two leases with remaining terms of approximately 74 years;
•$6.3 million for land underlying a parking garage in Baltimore, Maryland under a lease with a remaining term of 23 years and an option to renew for an additional 49 years that was included in the term used in determining the asset balance;
•$8.7 million for land in a research park in College Park, Maryland under five leases through our M Square Associates, LLC joint venture, all of the rent on which was previously paid. These leases had remaining terms ranging from 57 to 75 years; and
•$2.0 million for other land underlying operating properties in our Fort Meade/BW Corridor sub-segment under two leases with remaining terms of approximately 42 years, all of the rent on which was previously paid.

The table below sets forth our property right-of-use assets and property lease liabilities on our consolidated balance sheets (in thousands):
As of December 31,
Leases Balance Sheet Location 2025 2024
Right-of-use assets
Operating leases - Property Property - operating lease right-of-use assets $ 50,383  $ 55,760 
Finance leases - Property Prepaid expenses and other assets, net 5,373  2,491 
Total right-of-use assets $ 55,756  $ 58,251 
Lease liabilities
Operating leases - Property Property - operating lease liabilities $ 45,012  $ 49,240 
Finance leases - Property Other liabilities 363  391 
Total lease liabilities $ 45,375  $ 49,631 
As of December 31, 2025, our operating leases had a weighted average remaining lease term of 41 years and a weighted average discount rate of 7.4%, while our finance leases had a weighted average remaining lease term of seven years and a weighted average discount rate of 9.1%. The table below presents our total property lease cost (in thousands):
Statement of Operations Location For the Years Ended December 31,
Lease cost 2025 2024 2023
Operating lease cost
Property leases - fixed Property operating expenses $ 9,088  $ 7,845  $ 6,955 
Property leases - variable Property operating expenses 108  246  66 
Finance lease cost
Amortization of property right-of-use assets Property operating expenses 76  74  76 
Interest on lease liabilities Interest expense 35  37  42 
$ 9,307  $ 8,202  $ 7,139 

The table below presents the effect of property lease payments on our consolidated statements of cash flows (in thousands):
For the Years Ended December 31,
Supplemental cash flow information 2025 2024 2023
Cash paid for amounts included in the measurement of lease liabilities
Operating cash flows for operating leases $ 7,940  $ 7,002  $ 6,056 
Operating cash flows for finance leases $ 35  $ 37  $ 42 
Financing cash flows for finance leases $ 28  $ 24  $ 20 

Payments on property leases were due as follows (in thousands):
December 31, 2025
Year Ending December 31, Operating Leases Finance Leases
2026 $ 8,218  $ 65 
2027 8,418  67 
2028 2,838  69 
2029 2,094  71 
2030 2,129  73 
Thereafter 151,870  153 
Total lease payments 175,567  498 
Less: Amount representing interest (130,555) (135)
Lease liability $ 45,012  $ 363