LEASES (Tables)

9 Months Ended

Sep. 30, 2022

Lessee - Future minimum lease payments and total operating lease liabilities

Future minimum lease payments and total operating lease liabilities from our ground leases as of September 30, 2022 are as follows (dollars in thousands):


	Ground Leases
2022	$	3,110
2023		12,442
2024		12,442
2025		12,442
2026		12,442
Thereafter		430,337
Total future minimum lease payments (undiscounted)		483,215
Difference between future undiscounted cash flows and discounted cash flows		(293,151)
Total operating lease liabilities (discounted)	$	190,064

Lessee - components of operating lease expenses

The components of operating lease expenses were as follows (dollars in thousands):


	Three Months Ended September 30,				Nine Months Ended September 30,
	2022		2021		2022		2021
Lease expense:
Contractual lease expense	$	3,226	$	3,231	$	9,760	$	9,691
Variable lease expense (a)		28		25		81		54
Total operating lease expense (b)(c)	$	3,254	$	3,256	$	9,841	$	9,745

(a)

Variable lease expense includes adjustments such as changes in the consumer price index and payments based on a percentage of a community’s revenue.

(b)

Lease expense is reported within the line item Other operating expenses on the Consolidated Statements of Operations.

(c)

For the nine months ended September 30, 2022, Operating lease right-of-use assets and Operating lease liabilities amortized by $2.5 million and $2.4 million, respectively. For the nine months ended September 30, 2021, Operating lease right-of-use assets and Operating lease liabilities amortized by $2.6 million and $2.3 million, respectively. Due to the net impact of the amortization, the Company recorded $0.1 million and $0.1 million of total operating lease expense during the three months ended September 30, 2022 and 2021, respectively, and $0.3 million and $0.3 million of total operating lease expense during the nine months ended September 30, 2022 and 2021, respectively.

Lessor - Future minimum lease payments

Future minimum lease payments from our retail and commercial leases as of September 30, 2022 are as follows (dollars in thousands):


	Retail and Commercial Leases
2022	$	6,127
2023		26,566
2024		24,703
2025		21,424
2026		18,638
Thereafter		80,908
Total future minimum lease payments (a)	$	178,366

(a)We have excluded our apartment home leases from this table as our apartment home leases generally have initial terms of 12 months or less.