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Leases
 12 Months Ended
Dec. 31, 2022
Leases [Abstract]  
Leases of Lessor Disclosure [Text Block]
4. Leases
The Company estimates the collectability of its accrued rent and accounts receivable balances related to lease revenue. When evaluating the collectability of these accrued rent and accounts receivable balances, management considers tenant creditworthiness, current economic trends and changes in tenants’ payment patterns, on a lease-by-lease basis. During the years ended December 31, 2021 and 2020, the Company wrote off approximately $1.3 million and $90.3 million, respectively, related to accrued rent, net balances and accounts receivable, net balances. The write-offs were for tenants, primarily in the retail and co-working sectors, that either terminated their leases or for which the Company determined their accrued rent and/or accounts receivable balances were no longer probable of collection.
In April 2020, the FASB staff issued a question and answer document (“Lease Modification Q & A”) related to the application of lease accounting guidance for lease concessions, in accordance with ASC 842, as a result of COVID-19. The Company did not utilize the guidance provided in the Lease Modification Q & A and instead elected to continue to account for the COVID-19 lease concessions on a lease-by-lease basis in accordance with the existing lease modification accounting framework.
During the year ended December 31, 2022, the Company determined it was probable of collecting
substantially all of certain clients’ accrued rent and account receivable balances and, therefore, ceased recognizing
revenue from such clients on a cash basis. As a result of returning these clients to accrual basis accounting, the
Company reinstated approximately $1.5 million of accrued rent balances during the year ended December 31, 2022.
Lessor
Operating Leases
The following table summarizes the components of lease revenue recognized during the years ended December 31, 2022, 2021 and 2020 included within the Company's Consolidated Statements of Operations (in thousands):
Year ended December 31,
Lease Revenue202220212020
Fixed contractual payments$2,426,007 $2,319,362 $2,211,915 
Variable lease payments492,361 433,652 434,346 
$2,918,368 $2,753,014 $2,646,261 
The future contractual lease payments to be received (excluding operating expense reimbursements and percentage rent) by the Company as of December 31, 2022, under non-cancelable operating leases which expire on various dates through 2049 (in thousands): 
Years Ending December 31,
2023$2,338,610 
20242,321,135 
20252,279,700 
20262,212,455 
20272,094,014 
Thereafter13,020,102 
No single tenant represented more than 10.0% of the Company’s total lease revenue for the years ended December 31, 2022, 2021 and 2020.
Sales-type Lease
On July 29, 2020, the Company entered into a 99-year ground lease with a third-party hotel developer for land at its Reston Next property located in Reston, Virginia, which will support the development of a 267-room, approximately 241,000 square foot hotel property. The lease commenced on October 21, 2020 and upon commencement, the Company performed classification testing. The ground lease was subject to termination rights and as of the lease commencement date, the Company was not reasonably certain that those termination rights would not be exercised. As such, the Company accounted for the ground lease as an operating lease. On December 19, 2022, the Company amended the ground lease which included the elimination of the termination rights. As a result, this lease was reclassified as a sales-type lease.
The Company recorded a sales-type lease receivable of approximately $13.0 million, which includes an unguaranteed residual asset of approximately $17,000. The sales-type lease receivable was measured as the present value of the fixed and determinable lease payments, including the unguaranteed residual value of the asset at the end of the lease, discounted at the rate implicit in the lease.
In addition, the Company recorded a gain on sales-type lease of approximately $10.1 million associated with the derecognition of the asset. The Company did not recognize any interest income during the year ended December 31, 2022.
The following table provides the future contractual payments to be received as of December 31, 2022 (in thousands):
Sales-Type
2023$— 
202431 
2025124 
2026372 
2027756 
Thereafter 268,249 
Total lease payments to be received269,532 
Less:
Interest portion256,504 
Sales-type lease receivable13,028 
Unguaranteed residual asset17 
Current expected credit loss adjustment(234)
Sales-type lease receivable, net$12,811 
Lessee, Operating Leases
Lessee
The Company has four non-cancelable ground lease obligations, as lessee, which were classified as operating leases, with various initial term expiration dates through 2114 for the years ended December 31, 2022, 2021 and 2020. The Company recognizes ground rent expense on a straight-line basis over the term of the respective ground lease agreements. As of December 31, 2022, none of the amounts disclosed below for these ground leases contain variable payments, extension options or residual value guarantees.
The Company has four finance lease obligations with various initial term expiration dates through 2094 for the years ended December 31, 2022, 2021 and 2020.
The following table provides lease cost information for the Company’s operating and finance leases for the years ended December 31, 2022, 2021 and 2020 (in thousands):
Year ended December 31,
Lease costs202220212020
Operating lease costs$12,700 $13,151 $13,948 
Finance lease costs
Amortization of right of use asset (1)$697 $547 $56 
Interest on lease liabilities (2)$3,236 $2,471 $583 
_______________
(1)The finance leases relate to either land, buildings or assets that remain in development. For land leases classified as finance leases because of a purchase option that the Company views as an economic incentive, the Company follows its existing policy and does not depreciate land because it is assumed to have an indefinite life. For all other finance leases, the Company would amortize the right of use asset over the shorter of the useful life of the asset or the lease term. If the finance lease relates to a property under development, the amortization of the right of use asset may be eligible for capitalization. For assets under development, depreciation may commence once the asset is placed in-service and depreciation would be recognized in accordance with the Company’s policy.
(2)One, two and three of the finance leases relate to assets under development for all or a portion of the years ended December 31, 2022, December 31, 2021 and December 31, 2020, respectively, and as such, a portion of the interest amount was capitalized.
The following table provides other quantitative information for the Company’s operating and finance leases as of December 31, 2022 and December 31, 2021:
December 31, 2022December 31, 2021
Other information
Weighted-average remaining lease term (in years)
Operating leases4950
Finance leases6869
Weighted-average discount rate
Operating leases5.7 %5.7 %
Finance leases6.2 %6.2 %
The following table provides a maturity analysis for the Company’s lease liabilities related to its operating and finance leases as of December 31, 2022 (in thousands):
Operating Finance
2023$22,415 $9,306 
2024 (1)22,274 49,343 
202510,308 9,971 
202610,100 10,166 
20279,885 10,364 
Thereafter 528,915 1,352,647 
Total lease payments603,897 1,441,797 
Less:
Interest portion399,211 1,192,462 
Present value of lease payments$204,686 $249,335 
_______________
(1)Finance lease payments in 2024 include approximately $38.7 million related to a purchase option that the Company is reasonably certain it will exercise.
The following table provides a maturity analysis for the Company’s lease liabilities related to its operating and finance leases as of December 31, 2021 (in thousands):
Operating Finance
2022$19,623 $8,762 
202325,333 10,826 
2024 (1)10,085 48,605 
202510,307 9,971 
202610,100 10,166 
Thereafter 538,801 1,363,011 
Total lease payments614,249 1,451,341 
Less:
Interest portion409,688 1,206,920 
Present value of lease payments$204,561 $244,421 
_______________
(1)Finance lease payments in 2024 include approximately $38.7 million related to a purchase option that the Company is reasonably certain it will exercise.