Leases

9 Months Ended

Sep. 30, 2024

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 tables present 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 and quarters ended September 30, 2024 and 2023 (amounts in thousands):


	Nine Months Ended September 30, 2024									Nine Months Ended September 30, 2023
Income Type	Residential Leases			Non-Residential Leases			Total			Residential Leases			Non-Residential Leases		Total
Residential and non-residential rent	$	1,978,847		$	48,658		$	2,027,505		$	1,926,869		$	46,642	$	1,973,511
Utility recoveries (RUBS income) (1)		67,731			752			68,483			64,007			662		64,669
Parking rent		34,738			1,027			35,765			32,955			354		33,309
Other lease revenue (2)		(15,417	)		(1,070	)		(16,487	)		(19,172	)		330		(18,842	)
Total lease revenue	$	2,065,899		$	49,367			2,115,266		$	2,004,659		$	47,988		2,052,647
Parking revenue								32,553								30,033
Other revenue								65,510								63,784
Total other rental income (3)								98,063								93,817
Rental income							$	2,213,329							$	2,146,464


	Quarter Ended September 30, 2024									Quarter Ended September 30, 2023
Income Type	Residential Leases			Non-Residential Leases			Total			Residential Leases			Non-Residential Leases			Total
Residential and non-residential rent	$	670,450		$	14,948		$	685,398		$	650,531		$	14,669		$	665,200
Utility recoveries (RUBS income) (1)		22,275			317			22,592			21,221			243			21,464
Parking rent		11,703			394			12,097			11,062			129			11,191
Other lease revenue (2)		(4,685	)		(589	)		(5,274	)		(5,752	)		(404	)		(6,156	)
Total lease revenue	$	699,743		$	15,070			714,813		$	677,062		$	14,637			691,699
Parking revenue								10,838									9,638
Other revenue								22,697									22,730
Total other rental income (3)								33,535									32,368
Rental income							$	748,348								$	724,067

(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 (see below for further discussion) and other miscellaneous lease revenue.

(3)

Other rental income is accounted for under the revenue recognition standard and primarily consists of third-party transient parking revenue and ancillary income such as cable and laundry revenue.

The following table presents residential accounts receivable and straight-line receivable balances for the Company’s properties as of September 30, 2024 and December 31, 2023 (amounts in thousands):


Balance Sheet (Other assets):	September 30, 2024			December 31, 2023
Residential accounts receivable balances	$	16,281		$	21,477
Allowance for doubtful accounts		(10,044	)		(15,846	)
Net receivable balances	$	6,237		$	5,631

Straight-line receivable balances	$	9,141		$	9,183

The following table presents residential bad debt for the Company’s properties for the nine months and quarters ended September 30, 2024 and 2023 (amounts in thousands):


	Nine Months Ended September 30,						Quarter Ended September 30,
Income Statement (Rental income):	2024			2023			2024			2023
Bad debt, net (1)	$	25,045		$	28,862		$	7,906		$	9,042
% of residential rental income		1.2	%		1.4	%		1.1	%		1.3	%

(1)

Bad debt, net benefited from additional resident payments due to governmental rental assistance programs of approximately $1.2 million and $2.4 million for the nine months ended September 30, 2024 and 2023, respectively, and $0.4 million and $0.5 million for the quarters ended September 30, 2024 and 2023, respectively.

Lessee Accounting

During the nine months ended September 30, 2024, the Company acquired below market long-term ground and parking leases, each fully prepaid at $1 and expiring in 2110, in connection with an apartment property acquisition as described in Note 4 and recorded a lease intangible asset of approximately $12.7 million, which is included in right-of-use assets on the consolidated balance sheets.