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Note 7 - Leases | 9 Months Ended
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Sep. 30, 2020
Notes to Financial Statements |
Lessee, Operating Leases [Text Block] | 7. Leases Lessor Leases The Company’s primary source of revenues is derived from lease agreements, which includes rental income and expense reimbursement. The Company’s lease income is comprised of minimum base rent, expense reimbursements, percentage rent, lease termination fee income, ancillary income, amortization of above-market and below-market rent adjustments and straight-line rent adjustments. The disaggregation of the Company’s lease income, which is included in Revenue from rental properties on the Company’s Condensed Consolidated Statements of Operations, as either fixed or variable lease income based on the criteria specified in ASC 842, for the nine months ended September 30, 2020 and 2019, is as follows (in thousands):
|  | Nine Months Ended September 30, |
|  | 2020 |  |  | 2019 |
Lease income: |  |  |  |  |  |  |  |
Fixed lease income (1) |  | $ | 596,105 |  |  | $ | 651,839 |
Variable lease income (2) |  |  | 164,967 |  |  |  | 181,898 |
Above-market and below-market leases amortization, net |  |  | 17,500 |  |  |  | 16,788 |
Total lease income (3) |  | $ | 778,572 |  |  | $ | 850,525 |
| (1) | Includes minimum base rents, expense reimbursements, ancillary income and straight-line rent adjustments.
| (2) | Includes minimum base rents, expense reimbursements, percentage rent, lease termination fee income and ancillary income.
| (3) | During the nine months ended September 30, 2020, the Company's revenue was reduced by $72.2 million associated with potentially uncollectible revenues, including revenues from tenants that are being accounted for on a cash basis, and disputed amounts, which includes $15.1 million for straight-line rent receivables, primarily attributable to the COVID-19 pandemic.
Lessee Leases The Company currently leases real estate space under non-cancelable operating lease agreements for ground leases and administrative office leases. The Company’s leases have remaining lease terms ranging from less than one year to 51.5 years, some of which include options to extend the terms for up to an additional 75 years. The Company does not include any of its renewal options in its lease terms for calculating its lease liability as the renewal options allow the Company to maintain operational flexibility and the Company is not reasonably certain it will exercise these renewal options at this time. The weighted average remaining non-cancelable lease term for the Company’s operating leases was 20.9 years at September 30, 2020. The weighted average discount rate was 6.66% at September 30, 2020. The Company’s operating lease liabilities are determined based on the estimated present value of the Company’s minimum lease payments under its lease agreements. The discount rate used to determine the lease liabilities is based on the estimated incremental borrowing rate on a lease by lease basis. When calculating the incremental borrowing rates, the Company utilized data from (i) its recent debt issuances, (ii) publicly available data for instruments with similar characteristics, (iii) observable mortgage rates and (iv) unlevered property yields and discount rates. The Company then applied adjustments to account for considerations related to term and security that may not be fully incorporated by the data sets. The components of the Company’s lease expense, which are included in rent expense and general and administrative expense on the Company’s Condensed Consolidated Statements of Operations for the nine months ended September 30, 2020 and 2019, were as follows (in thousands):
|  | Nine Months Ended September 30, |
|  | 2020 |  |  | 2019 |
Lease cost: |  |  |  |  |  |  |  |
Operating lease cost |  | $ | 7,782 |  |  | $ | 9,592 |
Variable lease cost |  |  | 2,104 |  |  |  | 1,408 |
Total lease cost |  | $ | 9,886 |  |  | $ | 11,000 |

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- Definition The entire disclosure for operating leases of lessee. Includes, but is not limited to, description of operating lease and maturity analysis of operating lease liability. + References Reference 1: http://www.xbrl.org/2003/role/disclosureRef -Publisher FASB -Name Accounting Standards Codification -Topic 842 -SubTopic 20 -URI http://asc.fasb.org/subtopic&trid=77888251 + Details
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