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Leases | 12 Months Ended
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Dec. 31, 2022
Leases [Abstract] |
Leases | 8. Leases Lessor Accounting The Company is the lessor for its residential and non-residential leases and these leases are accounted for as operating leases under the lease 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 years ended December 31, 2022, 2021 and 2020 (amounts in thousands):
|  | Year Ended December 31, 2022 |  |  | Year Ended December 31, 2021 |  |  | Year Ended December 31, 2020 |
Income Type |  | Residential Leases |  |  | Non-Residential Leases |  |  | Total |  |  | Residential Leases |  |  | Non-Residential Leases |  |  | Total |  |  | Residential Leases |  |  | Non-Residential Leases |  |  | Total |
Residential and non-residential rent |  | $ | 2,441,332 |  |  | $ | 63,995 |  |  | $ | 2,505,327 |  |  | $ | 2,199,986 |  |  | $ | 61,033 |  |  | $ | 2,261,019 |  |  | $ | 2,336,778 |  |  | $ | 51,663 |  |  | $ | 2,388,441 |
Utility recoveries (RUBS income) (1) |  |  | 81,140 |  |  |  | 844 |  |  |  | 81,984 |  |  |  | 74,846 |  |  |  | 723 |  |  |  | 75,569 |  |  |  | 70,699 |  |  |  | 677 |  |  |  | 71,376 |
Parking rent |  |  | 43,335 |  |  |  | 435 |  |  |  | 43,770 |  |  |  | 40,934 |  |  |  | 565 |  |  |  | 41,499 |  |  |  | 38,743 |  |  |  | 412 |  |  |  | 39,155 |
Other lease revenue (2) |  |  | (12,637 | ) |  |  | (69 | ) |  |  | (12,706 | ) |  |  | (17,667 | ) |  |  | 4,027 |  |  |  | (13,640 | ) |  |  | (28,663 | ) |  |  | (5,519 | ) |  |  | (34,182 | )
Total lease revenue |  | $ | 2,553,170 |  |  | $ | 65,205 |  |  |  | 2,618,375 |  |  | $ | 2,298,099 |  |  | $ | 66,348 |  |  |  | 2,364,447 |  |  | $ | 2,417,557 |  |  | $ | 47,233 |  |  |  | 2,464,790 |
Parking revenue |  |  |  |  |  |  |  |  | 37,338 |  |  |  |  |  |  |  |  |  | 26,789 |  |  |  |  |  |  |  |  |  | 22,210 |
Other revenue |  |  |  |  |  |  |  |  | 79,467 |  |  |  |  |  |  |  |  |  | 72,761 |  |  |  |  |  |  |  |  |  | 84,705 |
Total other rental income (3) |  |  |  |  |  |  |  |  | 116,805 |  |  |  |  |  |  |  |  |  | 99,550 |  |  |  |  |  |  |  |  |  | 106,915 |
Rental income |  |  |  |  |  |  |  | $ | 2,735,180 |  |  |  |  |  |  |  |  | $ | 2,463,997 |  |  |  |  |  |  |  |  | $ | 2,571,705 |
(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 residential and non-residential accounts receivable and straight-line receivable balances for the Company’s properties as of December 31, 2022 and 2021 (amounts in thousands):
|  | Residential |  |  | Non-Residential |
Balance Sheet (Other assets): |  | December 31, 2022 |  |  | December 31, 2021 |  |  | December 31, 2022 |  |  | December 31, 2021 |
Resident/tenant accounts receivable balances |  | $ | 35,688 |  |  | $ | 37,959 |  |  | $ | 2,820 |  |  | $ | 3,218 |
Allowance for doubtful accounts |  |  | (31,405 | ) |  |  | (33,121 | ) |  |  | (2,152 | ) |  |  | (2,365 | )
Net receivable balances |  | $ | 4,283 |  |  | $ | 4,838 |  |  | $ | 668 |  |  | $ | 853 |
Straight-line receivable balances |  | $ | 4,398 |  |  | $ | 7,460 |  |  | $ | 13,795 |  |  | $ | 13,021 |
The following table presents residential bad debt for the Company’s properties for the years ended December 31, 2022, 2021 and 2020 (amounts in thousands):
|  | Year Ended December 31, |
Income Statement (Rental income): |  |  | 2022 |  |  |  | 2021 |  |  |  | 2020 |
Bad debt, net (1) |  | $ | 26,570 |  |  | $ | 31,485 |  |  | $ | 42,505 |
% of rental income |  |  | 1.0 | % |  |  | 1.3 | % |  |  | 1.7 | %
(1) Bad debt, net benefited from additional resident payments due to governmental rental assistance programs of approximately $34.1 million and $34.8 million for the years ended December 31, 2022 and 2021, respectively. Lessee Accounting The Company is the lessee under various corporate office and ground leases for which the Company recognizes right-of-use (“ROU”) assets and related lease liabilities. The following table presents the Company’s ROU assets and related lease liabilities as of December 31, 2022 and 2021 (amounts in thousands):
|  | 2022 |  |  | 2021 |
Right-of-use assets: |  |  |  |  |  |
Corporate office leases (operating) |  | $ | 34,767 |  |  | $ | 36,897 |
Ground leases (finance) |  |  | 95,834 |  |  |  | 97,575 |
Ground leases (operating) |  |  | 332,355 |  |  |  | 340,241 |
Right-of-use assets |  | $ | 462,956 |  |  | $ | 474,713 |
Lease liabilities: |  |  |  |  |  |
Corporate office leases (operating) |  | $ | 35,747 |  |  | $ | 37,760 |
Ground leases (finance) |  |  | 68,919 |  |  |  | 69,479 |
Ground leases (operating) |  |  | 204,082 |  |  |  | 205,096 |
Lease liabilities |  | $ | 308,748 |  |  | $ | 312,335 |
Corporate office leases The Company leases eight corporate offices with lease expiration dates ranging from 2024 through 2042 (inclusive of applicable extension options). See Note 15 for details on a corporate office lease with a related party. Ground leases The Company maintains consolidated long-term ground leases for 15 operating properties and one project under development with lease expiration dates ranging from 2042 through 2118 (inclusive of applicable purchase options). The Company owns the building and improvements. During the year ended December 31, 2021, the Company modified one ground lease that was previously classified as an operating lease. The Company now classifies this lease as a finance lease and reduced its lease liability and ROU asset due to remeasurement by approximately $11.3 million. Additional disclosures The following tables illustrate the quantitative disclosures for lessees as of and for the years ended December 31, 2022, 2021 and 2020 (amounts in thousands):
|  | Year Ended December 31, 2022 |  |  | Year Ended December 31, 2021 |  |  | Year Ended December 31, 2020 |
Lease cost: |  |  |  |  |  |  |  |  |
Finance lease cost: |  |  |  |  |  |  |  |  |
Amortization of right-of-use assets (capitalized) |  | $ | 351 |  |  | $ | 351 |  |  | $ | — |
Amortization of right-of-use assets (expensed) |  |  | 1,391 |  |  |  | 1,391 |  |  |  | — |
Interest on lease liabilities (capitalized) |  |  | — |  |  |  | 452 |  |  |  | 1,029 |
Interest on lease liabilities (expensed) |  |  | 1,904 |  |  |  | 1,464 |  |  |  | — |
Operating lease cost: |  |  |  |  |  |  |  |  |
Corporate office leases |  |  | 4,061 |  |  |  | 3,581 |  |  |  | 3,747 |
Ground leases |  |  | 18,338 |  |  |  | 18,338 |  |  |  | 22,102 |
Variable lease cost: |  |  |  |  |  |  |  |  |
Corporate office leases |  |  | 430 |  |  |  | 1,037 |  |  |  | 1,307 |
Ground leases |  |  | 4,342 |  |  |  | 2,973 |  |  |  | 3,304 |
Total lease cost |  | $ | 30,817 |  |  | $ | 29,587 |  |  | $ | 31,489 |
|  | December 31, 2022 |  |  | December 31, 2021 |  |  | December 31, 2020 |
Other information: |  |  |  |  |  |  |  |  |
Cash paid for amounts included in the measurement of lease liabilities: |  |  |  |  |  |  |  |  |
Investing cash flows from finance leases |  | $ | — |  |  | $ | 383 |  |  | $ | 567 |
Financing cash flows from finance leases |  | $ | 2,463 |  |  | $ | 1,898 |  |  | $ | — |
Operating cash flows from operating leases: |  |  |  |  |  |  |  |  |
Corporate office leases |  | $ | 4,385 |  |  | $ | 5,016 |  |  | $ | 5,296 |
Ground leases |  | $ | 15,037 |  |  | $ | 14,682 |  |  | $ | 16,552 |
Weighted-average remaining lease term – finance leases |  | 24.1 years |  |  | 25.2 years |  |  | 18.7 years |
Weighted-average remaining lease term – operating leases: |  |  |  |  |  |  |  |  |
Corporate office leases |  | 16.1 years |  |  | 16.8 years |  |  | 17.4 years |
Ground leases |  | 61.2 years |  |  | 61.8 years |  |  | 55.3 years |
Weighted-average discount rate – finance leases |  |  | 2.8 | % |  |  | 2.8 | % |  |  | 3.0 | %
Weighted-average discount rate – operating leases: |  |  |  |  |  |  |  |  |
Corporate office leases |  |  | 3.2 | % |  |  | 3.2 | % |  |  | 3.2 | %
Ground leases |  |  | 5.1 | % |  |  | 5.1 | % |  |  | 5.0 | %
The following table summarizes the Company’s undiscounted cash flows for contractual obligations for minimum rent payments/receipts under operating and financing leases for the next five years and thereafter as of December 31, 2022:
(Payments)/Receipts Due by Year (in thousands) |
|  | 2023 |  |  | 2024 |  |  | 2025 |  |  | 2026 |  |  | 2027 |  |  | Thereafter |  |  | Total |
Finance Leases: |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |
Minimum Rent Payments (a) |  | $ | (2,662 | ) |  | $ | (2,880 | ) |  | $ | (2,946 | ) |  | $ | (2,959 | ) |  | $ | (2,971 | ) |  | $ | (85,238 | ) |  | $ | (99,656 | )
Operating Leases: |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |
Minimum Rent Payments (a) |  | $ | (15,173 | ) |  | $ | (15,255 | ) |  | $ | (15,024 | ) |  | $ | (14,849 | ) |  | $ | (14,923 | ) |  | $ | (816,532 | ) |  | $ | (891,756 | )
Minimum Rent Receipts (b) |  | $ | 58,776 |  |  | $ | 54,271 |  |  | $ | 48,333 |  |  | $ | 40,461 |  |  | $ | 35,808 |  |  | $ | 119,008 |  |  | $ | 356,657 |
(a) Minimum basic rent due for corporate office leases and base rent due on ground leases where the Company is the lessee. (b) Minimum basic rent receipts due for various non-residential space where the Company is the lessor. Excludes residential leases due to their short-term nature. The following table provides a reconciliation of lease liabilities from our undiscounted cash flows for minimum rent payments as of December 31, 2022 (amounts in thousands):
|  | 2022 |
Total minimum rent payments |  | $ | 991,412 |
Less: Lease discount |  |  | (682,664 | )
Lease liabilities |  | $ | 308,748 |

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