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Leases | 12 Months Ended
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Dec. 31, 2021
Leases |
Leases | Note 3 – Leases Tenant Leases The Company is primarily focused on the ownership, acquisition, development and management of retail properties leased to industry leading tenants. As of December 31, 2021, the Company’s portfolio was approximately 99.5% leased and had a weighted average remaining lease term (excluding extension options) of approximately 9.3 years. A significant majority of its properties are leased to national tenants and approximately 67.0% of its annualized base rent was derived from tenants, or parent entities thereof, with an investment grade credit rating from S&P Global Ratings, Moody’s Investors Service, Fitch Ratings or the National Association of Insurance Commissioners. Substantially all of the Company’s tenants are subject to net lease agreements. A net lease typically requires the tenant to be responsible for minimum monthly rent and actual property operating expenses incurred, including property taxes, insurance and maintenance. In addition, the Company’s tenants are typically subject to future rent increases based on fixed amounts or increases in the consumer price index and certain leases provide for additional rent calculated as a percentage of the tenants’ gross sales above a specified level. Certain of the Company’s properties are subject to leases under which it retains responsibility for specific costs and expenses of the property. The Company’s leases typically provide the tenant one or more multi-year renewal options to extend their leases, subject to generally the same terms and conditions, including rent increases, consistent with the initial lease term. The Company attempts to maximize the amount it expects to derive from the underlying real estate property following the end of the lease, to the extent it is not extended. The Company maintains a proactive leasing program that, combined with the quality and locations of its properties, has made its properties attractive to tenants. The Company intends to continue to hold its properties for long-term investment and, accordingly, places a strong emphasis on the quality of construction and an on-going program of regular and preventative maintenance. However, the residual value of a real estate property is still subject to various market-specific, asset-specific, and tenant-specific risks and characteristics. As the classification of a lease is dependent on the fair value of its cash flows at lease commencement, the residual value of a property represents a significant assumption in its accounting for tenant leases. The Company has elected the practical expedient in ASC 842 on not separating non-lease components from associated lease components. The lease and non-lease components combined as a result of this election largely include tenant rentals and maintenance charges, respectively. The Company applies the accounting requirements of ASC 842 to the combined component. The following table includes information regarding contractual lease payments for the Company’s operating leases for which it is the lessor, for the years ended December 31, 2021, 2020 and 2019 (presented in thousands).
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​ | ​ | ​ | ​ | For the Year Ended December 31,
​ | ​ | ​ | ​ | 2021 | ​ | 2020 | ​ | 2019 |
Total lease payments | ​ | ​ | ​ | $ | 352,797 | ​ | $ | 257,390 | ​ | $ | 193,843 | ​
Less: Operating cost reimbursements and percentage rents | ​ | ​ | ​ |  | 36,929 | ​ |  | 28,248 | ​ |  | 21,137 | ​
Total non-variable lease payments | ​ | ​ | ​ | $ | 315,868 | ​ | $ | 229,142 | ​ | $ | 172,706 | ​
​ At December 31, 2021, future non-variable lease payments to be received from the Company’s operating leases for the next five years and thereafter are as follows (presented in thousands):
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​ |  | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​
Year Ending December 31, |  | ​ | 2022 |  | 2023 |  | 2024 |  | 2025 |  | 2026 |  | Thereafter |  | Total
Future non-variable lease payments | ​ | ​ | $ | 357,888 |  | $ | 351,828 |  | $ | 340,612 |  | $ | 328,784 |  | $ | 310,965 | ​ | $ | 1,744,997 |  | $ | 3,435,074
​ Deferred Revenue As of December 31, 2021, and 2020, there was $13.5 million and $6.1 million, respectively, in deferred revenues resulting from rents paid in advance. Land Lease Obligations The Company is the lessee under land lease agreements for certain of its properties. ASC 842 requires a lessee to recognize right of use assets and lease obligation liabilities that arise from leases, whether qualifying as operating or finance. As of December 31, 2021 and 2020, the Company had $61.1 million and $44.5 million of right of use assets, recognized within Other Assets in the Consolidated Balance Sheets, respectively, while the corresponding lease obligations of $25.0 million and $17.3 million, respectively, were recognized within Accounts Payable, Accrued Expenses, and Other Liabilities on the Consolidated Balance Sheets as of these dates. The Company’s land leases do not include any variable lease payments. These leases typically provide multi-year renewal options to extend their term as lessee at the Company’s option. Option periods are included in the calculation of the lease obligation liability only when options are reasonably certain to be exercised. Certain of the Company’s land leases qualify as finance leases as a result of purchase options that are reasonably certain of being exercised or automatic transfer of title to the Company at the end of the lease term. Amortization of the right of use assets for operating land leases is classified as land lease expense and was $1.6 million, $1.3 million, and $1.2 million for the years ending December 31, 2021, 2020, and 2019, respectively. There was no amortization of right of use assets for finance land leases, as the underlying leased asset (land) has an infinite life. Interest expense on finance land leases was $0.2 million during the year ended December 31, 2021, while there was no such expense incurred during the years ended December 31, 2020 or 2019. The following tables include information on the Company’s land leases for which it is the lessee, for the years ending December 31, 2021, 2020, and 2019 (presented in thousands).
​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​
​ | ​ | Year Ended
​ |  | December 31, 2021 |  |  | December 31, 2020 |  |  | December 31, 2019 |
Operating leases: | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​
Operating cash outflows | ​ | $ | 1,112 | ​ | ​ | $ | 1,069 | ​ | ​ | $ | 1,073 | ​
Weighted-average remaining lease term - operating leases (years) | ​ | ​ | 33.8 | ​ | ​ | ​ | 38.3 | ​ | ​ | ​ | 38.2 | ​
Weighted-average discount rate - operating leases | ​ | ​ | 4.13 | % | ​ | ​ | 4.13 | % | ​ | ​ | 4.13 | %
​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​
Finance leases: | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​
Operating cash outflows | ​ | $ | 215 | ​ | ​ | $ | — | ​ | ​ | $ | — | ​
Financing cash outflows | ​ | $ | 93 | ​ | ​ | $ | — | ​ | ​ | $ | — | ​
Weighted-average remaining lease term - finance leases (years) | ​ | ​ | 2.8 | ​ | ​ | ​ | — | ​ | ​ | ​ | — | ​
Weighted-average discount rate - operating leases | ​ | ​ | 4.13 | % | ​ | ​ | — | % | ​ | ​ | — | %
​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​
Supplemental Disclosure: | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​
Right-of-use assets obtained in exchange for new lease liabilities | ​ | $ | 6,302 | ​ | ​ | $ | 1,064 | ​ | ​ | $ | 19,672 | ​
Right-of-use assets removed in exchange for real property | ​ |  | — | ​ | ​ |  | — | ​ | ​ |  | (3,025) | ​
Right-of-use assets net change | ​ | $ | 6,302 | ​ | ​ | $ | — | ​ | ​ | $ | 16,647 | ​
​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​
​ Maturity Analysis of Lease Liabilities for Operating Leases (presented in thousands)
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​ |  | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​
Year Ending December 31, |  | ​ | 2022 |  | 2023 |  | 2024 |  | 2025 |  | 2026 |  | Thereafter |  | Total
Lease payments | ​ | ​ | $ | 1,197 |  | $ | 1,197 |  | $ | 1,197 |  | $ | 1,197 |  | $ | 1,195 | ​ | $ | 29,850 |  | $ | 35,833
Imputed interest | ​ | ​ |  | (730) | ​ |  | (711) | ​ |  | (690) | ​ |  | (669) | ​ |  | (647) | ​ |  | (14,491) | ​ |  | (17,938)
Total lease liabilities | ​ | ​ | $ | 467 |  | $ | 486 |  | $ | 507 |  | $ | 528 |  | $ | 548 | ​ | $ | 15,359 |  | $ | 17,895
​ Maturity Analysis of Lease Liabilities for Finance Leases (presented in thousands)
​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​
​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​
Year Ending December 31, |  | ​ | 2022 |  | 2023 |  | 2024 |  | 2025 |  | 2026 |  | Thereafter |  | Total
Lease payments | ​ | ​ | $ | 336 |  | $ | 336 |  | $ | 6,252 |  | $ | — | ​ | $ | — | ​ | $ | — |  | $ | 6,924
Imputed interest | ​ | ​ |  | (255) | ​ |  | (252) | ​ |  | (207) | ​ |  | — | ​ | ​ | — | ​ | ​ | — | ​ |  | (714)
Total lease liabilities | ​ | ​ | $ | 81 |  | $ | 84 |  | $ | 6,045 |  | $ | — |  | $ | — | ​ | $ | — |  | $ | 6,210
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