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Leases | 9 Months Ended
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Sep. 30, 2021
Leases [Abstract] |
Leases |
8. | Leases
Lessor Accounting The Company is the lessor for its residential and non-residential leases and these leases will continue to be accounted for as operating leases under the lease standard. For the nine months ended September 30, 2021, approximately 97% of the Company’s total lease revenue is generated from residential apartment leases that are generally twelve months or less in length. The residential apartment leases may include lease income related to such items as utility recoveries, parking, storage and pet rent that the Company treats as a single lease component because the amenities cannot be leased on their own and the timing and pattern of revenue recognition are the same. The collection of lease payments at lease commencement is probable and therefore the Company subsequently recognizes lease income over the lease term on a straight-line basis. Residential leases are renewable upon consent of both parties on an annual or monthly basis. For the nine months ended September 30, 2021, approximately 3% of the Company’s total lease revenue is generated by non-residential leases that are generally for terms ranging between five to ten years. The non-residential leases generally consist of ground floor retail spaces and master-leased parking garages that serve as additional amenities for our residents. The non-residential leases may include lease income related to such items as utility recoveries, parking rent and storage rent that the Company treats as a single lease component because the amenities cannot be leased on their own and the timing and pattern of revenue recognition are the same. The collection of lease payments at lease commencement is probable and therefore the Company subsequently recognizes lease income over the lease term on a straight-line basis. Non-residential leases are renewable with market-based renewal options. The following table presents the lease income types relating to lease payments for residential and non-residential leases along with the total other rental income for the nine months ended September 30, 2021 and 2020 (amounts in thousands):
|  | Nine Months Ended September 30, 2021 |  |  | Nine Months Ended September 30, 2020 |
Income Type |  | Residential Leases |  |  | Non-Residential Leases |  |  | Total |  |  | Residential Leases |  |  | Non-Residential Leases |  |  | Total |
Residential and non-residential rent |  | $ | 1,629,778 |  |  | $ | 45,680 |  |  | $ | 1,675,458 |  |  | $ | 1,783,298 |  |  | $ | 36,263 |  |  | $ | 1,819,561 |
Utility recoveries (RUBS income) (1) |  |  | 55,331 |  |  |  | 519 |  |  |  | 55,850 |  |  |  | 52,538 |  |  |  | 509 |  |  |  | 53,047 |
Parking rent |  |  | 30,403 |  |  |  | 465 |  |  |  | 30,868 |  |  |  | 29,052 |  |  |  | 324 |  |  |  | 29,376 |
Other lease revenue (2) |  |  | (19,442 | ) |  |  | 2,914 |  |  |  | (16,528 | ) |  |  | (19,000 | ) |  |  | (5,530 | ) |  |  | (24,530 | )
Total lease revenue |  | $ | 1,696,070 |  |  | $ | 49,578 |  |  |  | 1,745,648 |  |  | $ | 1,845,888 |  |  | $ | 31,566 |  |  |  | 1,877,454 |
Parking revenue |  |  |  |  |  |  |  |  |  |  | 18,455 |  |  |  |  |  |  |  |  |  |  |  | 16,648 |
Other revenue |  |  |  |  |  |  |  |  |  |  | 54,764 |  |  |  |  |  |  |  |  |  |  |  | 64,168 |
Total other rental income (3) |  |  |  |  |  |  |  |  |  |  | 73,219 |  |  |  |  |  |  |  |  |  |  |  | 80,816 |
Rental income |  |  |  |  |  |  |  |  |  | $ | 1,818,867 |  |  |  |  |  |  |  |  |  |  | $ | 1,958,270 |
(1) | RUBS income primarily consists of variable payments representing the recovery of utility costs from residents.
(2) | Other lease revenue consists of the revenue adjustment related to bad debt and other miscellaneous lease revenue.
(3) | Other rental income is accounted for under the revenue recognition standard.
The following table presents the lease income types relating to lease payments for residential and non-residential leases along with the total other rental income for the quarters ended September 30, 2021 and 2020 (amounts in thousands):
|  | Quarter Ended September 30, 2021 |  |  | Quarter Ended September 30, 2020 |
Income Type |  | Residential Leases |  |  | Non-Residential Leases |  |  | Total |  |  | Residential Leases |  |  | Non-Residential Leases |  |  | Total |
Residential and non-residential rent |  | $ | 551,474 |  |  | $ | 14,443 |  |  | $ | 565,917 |  |  | $ | 576,192 |  |  | $ | 6,042 |  |  | $ | 582,234 |
Utility recoveries (RUBS income) (1) |  |  | 18,798 |  |  |  | 189 |  |  |  | 18,987 |  |  |  | 17,306 |  |  |  | 134 |  |  |  | 17,440 |
Parking rent |  |  | 10,513 |  |  |  | 103 |  |  |  | 10,616 |  |  |  | 9,592 |  |  |  | 101 |  |  |  | 9,693 |
Other lease revenue (2) |  |  | (472 | ) |  |  | 1,776 |  |  |  | 1,304 |  |  |  | (12,727 | ) |  |  | (4,299 | ) |  |  | (17,026 | )
Total lease revenue |  | $ | 580,313 |  |  | $ | 16,511 |  |  |  | 596,824 |  |  | $ | 590,363 |  |  | $ | 1,978 |  |  |  | 592,341 |
Parking revenue |  |  |  |  |  |  |  |  |  |  | 6,883 |  |  |  |  |  |  |  |  |  |  |  | 5,336 |
Other revenue |  |  |  |  |  |  |  |  |  |  | 19,499 |  |  |  |  |  |  |  |  |  |  |  | 24,756 |
Total other rental income (3) |  |  |  |  |  |  |  |  |  |  | 26,382 |  |  |  |  |  |  |  |  |  |  |  | 30,092 |
Rental income |  |  |  |  |  |  |  |  |  | $ | 623,206 |  |  |  |  |  |  |  |  |  |  | $ | 622,433 |
(1) | RUBS income primarily consists of variable payments representing the recovery of utility costs from residents.
(2) | Other lease revenue consists of the revenue adjustment related to bad debt and other miscellaneous lease revenue.
(3) | Other rental income is accounted for under the revenue recognition standard.
The economic impact of the pandemic on a subset of our residents and tenants has led to elevated levels of bad debt, which was reduced, in part, by governmental rental assistance payments paid on their behalf. We continue to work with our residents and tenants on payment plans and collections and our bad debt allowance policies remain consistent from those existing prior to the pandemic. The following table presents residential and non-residential accounts receivable and straight-line receivable balances for the Company’s properties as of September 30, 2021 and December 31, 2020 (amounts in thousands):
|  | Residential |  |  | Non-Residential |
Balance Sheet (Other assets): |  | September 30, 2021 |  |  | December 31, 2020 |  |  | September 30, 2021 |  |  | December 31, 2020 |
Resident/tenant accounts receivable balances |  | $ | 42,126 |  |  | $ | 30,856 |  |  | $ | 4,001 |  |  | $ | 7,598 |
Allowance for doubtful accounts |  |  | (37,669 | ) |  |  | (24,021 | ) |  |  | (3,442 | ) |  |  | (6,527 | )
Net receivable balances |  | $ | 4,457 |  | (1) | $ | 6,835 |  |  | $ | 559 |  |  | $ | 1,071 |
Straight-line receivable balances |  | $ | 12,650 |  |  | $ | 19,992 |  |  | $ | 12,759 |  |  | $ | 13,413 |
(1) | The Company held residential security deposits approximating 58.4% of the net receivable balance at September 30, 2021.
The following table presents residential bad debt for the Company’s properties for the nine months and quarters ended September 30, 2021 and 2020 (amounts in thousands):
|  | Nine Months Ended September 30, |  |  | Quarter Ended September 30, |
Income Statement (Rental income): |  |  | 2021 |  |  |  | 2020 |  |  |  | 2021 |  |  |  | 2020 |
Bad debt, net (1) |  | $ | 29,751 |  |  | $ | 29,419 |  |  | $ | 3,979 |  |  | $ | 16,071 |
% of rental income |  |  | 1.7 | % |  |  | 1.5 | % |  |  | 0.7 | % |  |  | 2.6 | %
(1) | The nine months and quarter ended September 30, 2021 benefited from additional resident payments due to governmental rental assistance programs.
Due to the impact of COVID-19 and the resulting economic impact on our non-residential tenants, we recognized a non-cash write-off of non-residential straight-line lease receivables of approximately $0.1 million and $12.9 million during the nine months ended September 30, 2021 and 2020, respectively. In addition, we reduced rental revenues by approximately $5.7 million and $5.6 million during the nine months ended September 30, 2021 and 2020, respectively, due to rent payment deferrals/abatements granted to our non-residential tenants.

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