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Leases
 12 Months Ended
Dec. 31, 2024
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. If the Company determines that the accrued rent and/or accounts receivable balances are no longer probable of collection then the balances are written-off and the lease is recognized on a cash basis.
If applicable, information related to write-offs of accrued rent, net balances and accounts receivable, net
balances and reinstatements of accrued rent balances for the Company’s unconsolidated joint ventures can be
found in Note 6.
Lessor
Operating Leases
The following table summarizes the components of lease revenue recognized during the years ended December 31, 2024, 2023 and 2022 included within the Company's Consolidated Statements of Operations (in thousands):
Year ended December 31,
Lease Revenue202420232022
Fixed contractual payments$2,605,272 $2,503,106 $2,426,007 
Variable lease payments570,541 550,641 492,361 
Sales-type lease992 926 — 
$3,176,805 $3,054,673 $2,918,368 
The future contractual lease payments to be received (excluding operating expense reimbursements and percentage rent) by the Company as of December 31, 2024, under non-cancelable operating leases which expire on various dates through 2049 (in thousands): 
Years Ending December 31,
2025$2,497,727 
20262,508,910 
20272,510,236 
20282,396,893 
20292,251,345 
Thereafter13,249,374 
No single tenant represented more than 10.0% of the Company’s total lease revenue for any of the years ended December 31, 2024, 2023 and 2022.
Sales-type Lease
For the years ended December 31, 2024, 2023 and 2022, the Company had one non-cancelable ground lease obligation, as lessor, that is classified as a sales-type lease with an expiration date in 2119. The Company recognized approximately $1.0 million and $0.9 million of interest income that is recorded in lease revenue on its Consolidated Statement of Operations for the year ended December 31, 2024 and 2023, respectively. 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, 2024 (in thousands):
December 31, 2024
2025$124 
2026321 
2027754 
2028775 
2029793 
Thereafter 266,745 
Total lease payments to be received269,512 
Less:
Interest portion254,589 
Sales-type lease receivable14,923 
Unguaranteed residual asset19 
Current expected credit loss adjustment(285)
Sales-type lease receivable, net$14,657 
The following table provides the future contractual payments to be received as of December 31, 2023 (in thousands):
December 31, 2023
2024$31 
2025124 
2026372 
2027756 
2028775 
Thereafter267,474 
Total lease payments to be received269,532 
Less:
Interest portion255,579 
Sales-type lease receivable13,953 
Unguaranteed residual asset18 
Current expected credit loss adjustment(267)
Sales-type lease receivable, net$13,704 
Lessee, Operating Leases
Lessee
The following table provides lease cost information for the Company’s operating and finance leases for the years ended December 31, 2024, 2023 and 2022 (in thousands):
Year ended December 31,
Lease costs202420232022
Operating lease costs (1)$14,583 $14,451 $12,700 
Finance lease costs
Amortization of right of use asset (2)$3,093 $2,821 $697 
Interest on lease liabilities (3)$13,374 $13,747 $3,236 
_______________
(1)One of the operating leases relates to an asset that was in predevelopment for the year ended December 31, 2024 and a portion of the year ended December 31, 2023. As such, the operating lease costs were capitalized. For the year 2022, there were no operating leases related to assets under development.
(2)The finance leases relate to either land, buildings or assets that are/were 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.
(3)One of the finance leases relates to an asset under development for all or a portion of the years ended December 31, 2023 and December 31, 2022. As such, a portion of the interest amount was capitalized. For the year ended December 31, 2024, there were no finance leases related to assets under development.
The following table provides other quantitative information for the Company’s operating and finance leases as of December 31, 2024 and December 31, 2023:
Other informationDecember 31, 2024December 31, 2023
Operating Leases (1)
Number of cancelable leases11
Number of non-cancelable leases54
Longest lease expiration date7/1/21257/1/2125
Weighted-average remaining lease term (in years)7270
Weighted-average discount rate6.5 %6.6 %
Finance Leases
Number of cancelable leases— — 
Number of non-cancelable leases55
Longest lease expiration date11/1/209411/1/2094
Weighted-average remaining lease term (in years)6160
Weighted-average discount rate6.2 %6.1 %
______________
(1)The Company has ground leases that are subject to variable payments and extension options. None of the leases contain residual value guarantees.
The following table provides a maturity analysis for the Company’s lease liabilities related to its operating and finance leases as of December 31, 2024 (in thousands):
Operating Finance
2025$40,451 $30,801 
202634,155 33,280 
202710,635 32,768 
2028 (1)40,462 118,252 
202921,710 10,793 
Thereafter 3,527,328 1,331,413 
Total lease payments3,674,741 1,557,307 
Less:
Interest portion3,282,055 1,186,422 
Present value of lease payments$392,686 $370,885 
_______________
(1)Operating lease payments in 2028 includes an approximately $25.1 million final rental payment related to a ground lease the Company is reasonably certain it will commence construction on in 2028. Finance lease payments in 2028 include approximately $105.3 million related to a purchase option that the Company was reasonably certain it would exercise upon execution of the ground leases. There can be no assurance that the Company will ultimately commence construction on the ground lease site or exercise its ground lease purchase option on the schedule currently contemplated or at all.
The following table provides a maturity analysis for the Company’s lease liabilities related to its operating and finance leases as of December 31, 2023 (in thousands):
Operating Finance
2024 (1)$29,989 $70,370 
202535,733 32,232 
202610,100 31,972 
20279,885 32,170 
2028 (1)14,637 118,232 
Thereafter3,546,537 1,342,174 
Total lease payments3,646,881 1,627,150 
Less:
Interest portion3,296,490 1,209,189 
Present value of lease payments$350,391 $417,961 
_______________
(1)Finance lease payments in 2024 and 2028 include approximately $38.7 million and $105.3 million, respectively, related to purchase options that the Company was reasonably certain it would exercise upon execution of the ground leases. There can be no assurance that the Company will ultimately exercise the purchase options on the schedule currently contemplated.
On March 28, 2024, the Company entered into a 90-year air rights lease with the Massachusetts Department of Transportation for an approximately 61,000 square foot site at the parking garage located at 100 Clarendon Street and the concourse level of the Massachusetts Bay Transportation Authority’s Back Bay Station (the “Station”). The lease requires annual base rental payments of $250,000 until the commencement of construction, as defined in the lease. If the Company commences construction of a project on the site on or before August 1, 2028, then a final fixed rental payment is due in accordance with the lease at that time. After August 1, 2028, if the Company commences construction of a project on the site, then a final rental payment based on the then current fair market value will be due at that time. In addition, the lease requires annual payments of $500,000 through 2033 to fund maintenance and improvements to the Station. The Company has assumed that it will begin construction on the site on or before August 1, 2028. The incremental borrowing rate for this lease is 6.57% per annum. The net present value of the ground lease payments is approximately $23.2 million. The Company classifies this lease as an operating lease. As a result, the Company recorded a Right of Use Assets – Operating Leases and Lease Liabilities – Operating Leases of approximately $23.9 million and $23.2 million, respectively, on its Consolidated Balance Sheets at March 31, 2024. The ground lease had operating lease costs of approximately $0.3 million for the period from March 28, 2024 through December 31, 2024. There can be no assurance that the Company will commence construction on the ground lease site on the terms and schedule currently contemplated or at all.
Lessee, Finance Leases
The following table provides other quantitative information for the Company’s operating and finance leases as of December 31, 2024 and December 31, 2023:
Other informationDecember 31, 2024December 31, 2023
Operating Leases (1)
Number of cancelable leases11
Number of non-cancelable leases54
Longest lease expiration date7/1/21257/1/2125
Weighted-average remaining lease term (in years)7270
Weighted-average discount rate6.5 %6.6 %
Finance Leases
Number of cancelable leases— — 
Number of non-cancelable leases55
Longest lease expiration date11/1/209411/1/2094
Weighted-average remaining lease term (in years)6160
Weighted-average discount rate6.2 %6.1 %
______________
(1)The Company has ground leases that are subject to variable payments and extension options. None of the leases contain residual value guarantees.
The following table provides a maturity analysis for the Company’s lease liabilities related to its operating and finance leases as of December 31, 2024 (in thousands):
Operating Finance
2025$40,451 $30,801 
202634,155 33,280 
202710,635 32,768 
2028 (1)40,462 118,252 
202921,710 10,793 
Thereafter 3,527,328 1,331,413 
Total lease payments3,674,741 1,557,307 
Less:
Interest portion3,282,055 1,186,422 
Present value of lease payments$392,686 $370,885 
_______________
(1)Operating lease payments in 2028 includes an approximately $25.1 million final rental payment related to a ground lease the Company is reasonably certain it will commence construction on in 2028. Finance lease payments in 2028 include approximately $105.3 million related to a purchase option that the Company was reasonably certain it would exercise upon execution of the ground leases. There can be no assurance that the Company will ultimately commence construction on the ground lease site or exercise its ground lease purchase option on the schedule currently contemplated or at all.
The following table provides a maturity analysis for the Company’s lease liabilities related to its operating and finance leases as of December 31, 2023 (in thousands):
Operating Finance
2024 (1)$29,989 $70,370 
202535,733 32,232 
202610,100 31,972 
20279,885 32,170 
2028 (1)14,637 118,232 
Thereafter3,546,537 1,342,174 
Total lease payments3,646,881 1,627,150 
Less:
Interest portion3,296,490 1,209,189 
Present value of lease payments$350,391 $417,961 
_______________
(1)Finance lease payments in 2024 and 2028 include approximately $38.7 million and $105.3 million, respectively, related to purchase options that the Company was reasonably certain it would exercise upon execution of the ground leases. There can be no assurance that the Company will ultimately exercise the purchase options on the schedule currently contemplated.
The Company has a ground lease for the land underlying its residential property, The Skylyne, in Oakland, California. The Skylyne is a residential property consisting of 402 residential units and supporting retail space totaling approximately 331,000 net rentable square feet. The ground lease has approximately 92 years remaining (including extension options) and provides the Company with the right to purchase the land subject to certain conditions. When the lease was executed in 2017, the purchase option was considered a bargain purchase option and, as a result, the Company classified it as a finance lease and the Company assumed the lessor would exercise its right to require the Company to purchase the land in May 2024 for approximately $38.7 million. In May 2024 and as of the date of this report, the lessor has not exercised this option and the Company reassessed the accounting for the ground lease and determined that the purchase option continues to be considered a bargain purchase option and the ground lease will continue to be accounted for as a finance lease. The lease requires monthly base rental payments of a nominal amount until the purchase occurs, which the Company now estimates will be in 2030. As a result of the reassessment, the lease liability was remeasured and reduced to approximately $0.1 million. In conjunction with the reduction in the lease liability, the right of use asset was reduced to $0 and the difference between the lease liability and right of use asset, before the remeasurement, of approximately $9.5 million was recorded as a decrease to interest expense for the year ended December 31, 2024. There can be no assurance that the Company will ultimately exercise its ground lease purchase option on the schedule currently contemplated or at all.
Lessor, Operating Leases [Text Block]
Lessor
Operating Leases
The following table summarizes the components of lease revenue recognized during the years ended December 31, 2024, 2023 and 2022 included within the Company's Consolidated Statements of Operations (in thousands):
Year ended December 31,
Lease Revenue202420232022
Fixed contractual payments$2,605,272 $2,503,106 $2,426,007 
Variable lease payments570,541 550,641 492,361 
Sales-type lease992 926 — 
$3,176,805 $3,054,673 $2,918,368 
The future contractual lease payments to be received (excluding operating expense reimbursements and percentage rent) by the Company as of December 31, 2024, under non-cancelable operating leases which expire on various dates through 2049 (in thousands): 
Years Ending December 31,
2025$2,497,727 
20262,508,910 
20272,510,236 
20282,396,893 
20292,251,345 
Thereafter13,249,374 
No single tenant represented more than 10.0% of the Company’s total lease revenue for any of the years ended December 31, 2024, 2023 and 2022.
Lessor, Sales-type Leases
Sales-type Lease
For the years ended December 31, 2024, 2023 and 2022, the Company had one non-cancelable ground lease obligation, as lessor, that is classified as a sales-type lease with an expiration date in 2119. The Company recognized approximately $1.0 million and $0.9 million of interest income that is recorded in lease revenue on its Consolidated Statement of Operations for the year ended December 31, 2024 and 2023, respectively. 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, 2024 (in thousands):
December 31, 2024
2025$124 
2026321 
2027754 
2028775 
2029793 
Thereafter 266,745 
Total lease payments to be received269,512 
Less:
Interest portion254,589 
Sales-type lease receivable14,923 
Unguaranteed residual asset19 
Current expected credit loss adjustment(285)
Sales-type lease receivable, net$14,657 
The following table provides the future contractual payments to be received as of December 31, 2023 (in thousands):
December 31, 2023
2024$31 
2025124 
2026372 
2027756 
2028775 
Thereafter267,474 
Total lease payments to be received269,532 
Less:
Interest portion255,579 
Sales-type lease receivable13,953 
Unguaranteed residual asset18 
Current expected credit loss adjustment(267)
Sales-type lease receivable, net$13,704