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LEASE INFORMATION | 12 Months Ended
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Dec. 31, 2021
Leases [Abstract] |
LEASE INFORMATION | LEASE INFORMATION Rental Income The Company receives rental income from the leasing of retail and office space. The leases generally provide for certain increases in base rent, reimbursement for certain operating expenses, and may require tenants to pay contingent rent to the extent their sales exceed a defined threshold. Certain tenants have the option in their lease agreement to extend their lease upon the expiration of their contractual term. Variable lease payments are based upon tenant sales information and are recognized once a tenant’s sales volume exceeds a defined threshold. Variable lease payments for reimbursement of operating expenses are based upon the operating expense activity for the period. In connection with the Merger, the Company assumed all leases in place at legacy RPAI properties and began recognizing rental income under the respective leases upon completion of the Merger. Rental income related to the Company’s operating leases is comprised of the following for the years ended December 31, 2021, 2020 and 2019, respectively:
| Year Ended December 31,
($ in thousands) | 2021 |  | 2020 |  | 2019
Fixed contractual lease payments – operating leases | $ | 292,873 |  |  | $ | 218,004 |  |  | $ | 244,666 |
Variable lease payments – operating leases | 69,422 |  |  | 52,128 |  |  | 61,368 |
Bad debt recovery (reserve) | (2,897) |  |  | (13,259) |  |  | (3,620) |
Straight-line rent adjustment | 4,674 |  |  | 1,155 |  |  | 3,362 |
Straight-line rent recovery (reserve) for uncollectibility | 716 |  |  | (4,177) |  |  | (1,153) |
Amortization of in-place lease liabilities, net | 2,611 |  |  | 3,819 |  |  | 3,776 |
Total | $ | 367,399 |  |  | $ | 257,670 |  |  | $ | 308,399 |
The weighted average remaining term of the lease agreements is approximately 4.9 years. During the years ended December 31, 2021, 2020, and 2019, the Company earned overage rent of $0.8 million, $0.2 million, and $1.3 million, respectively. During 2020 and 2021, in response to the impact of the novel coronavirus (“COVID 19”) pandemic, the Company received rent relief requests from a significant proportion of its tenants. Some tenants have asserted various legal arguments that they allege relieve them of the obligation to pay rent during the pandemic; the Company and its legal advisers generally disagree with these legal arguments. The Company has evaluated and will continue to evaluate tenant requests for rent relief based on many factors, including the tenant’s financial strength and operating history, potential co-tenancy impacts, the tenant’s contribution to the shopping center in which it operates, the Company’s assessment of the tenant’s long-term viability, the difficulty or ease with which the tenant could be replaced, and other factors. As a result of this evaluation, the Company agreed to defer rent for a portion of its tenants, subject to certain conditions. The Company had deferred the collection of $2.9 million of rental income that remains outstanding as of December 31, 2021. To the extent the Company agrees to defer rent or is otherwise unable to collect rent for certain periods, the Company will realize decreased cash flow, which could significantly decrease the cash available for the Company’s operating and capital uses. As of December 31, 2021, future minimum rentals to be received under non-cancelable operating leases for each of the next five years and thereafter, excluding variable lease payments and amounts deferred under lease concession agreements, are as follows:
($ in thousands) | Lease Payments
2022 | $ | 589,763 |
2023 | 540,899 |
2024 | 474,392 |
2025 | 405,830 |
2026 | 339,723 |
Thereafter | 1,782,554 |
Total | $ | 4,133,161 |
Commitments under Ground Leases In connection with the Merger, the Company assumed three ground leases in which we lease (as lessee) all or a portion of the land under three retail operating properties acquired. As of December 31, 2021, we are obligated under 12 ground leases for approximately 98 acres of land. Most of these ground leases require fixed annual rent payments. The expiration dates of the remaining initial terms of these ground leases range from 2023 to 2092 with a weighted average remaining term of 35.6 years. Certain of these leases have five- to 10-year extension options ranging in total from 20 to 25 years. Right-of-use assets are included within “Prepaid and other assets” and the lease liabilities are included within “Deferred revenue and other liabilities” in the accompanying consolidated balance sheets. During the years ended December 31, 2021, 2020, and 2019, the Company incurred ground lease expense on these operating leases of $2.8 million, $1.9 million, and $1.8 million, respectively. The Company made payments of $2.6 million, $1.8 million and $1.7 million during the years ended December 31, 2021, 2020 and 2019, respectively, which were included in operating cash flows. As of December 31, 2021, future minimum lease payments due under ground leases for each of the next five years and thereafter are as follows:
($ in thousands) | Lease Obligations
2022 | $ | 4,986 |
2023 | 4,811 |
2024 | 4,776 |
2025 | 4,900 |
2026 | 4,905 |
Thereafter | 115,528 |
Total | $ | 139,906 |
Adjustment for discounting | (69,669) |
Lease liabilities as of December 31, 2021 | $ | 70,237 |
LEASE INFORMATION | LEASE INFORMATION Rental Income The Company receives rental income from the leasing of retail and office space. The leases generally provide for certain increases in base rent, reimbursement for certain operating expenses, and may require tenants to pay contingent rent to the extent their sales exceed a defined threshold. Certain tenants have the option in their lease agreement to extend their lease upon the expiration of their contractual term. Variable lease payments are based upon tenant sales information and are recognized once a tenant’s sales volume exceeds a defined threshold. Variable lease payments for reimbursement of operating expenses are based upon the operating expense activity for the period. In connection with the Merger, the Company assumed all leases in place at legacy RPAI properties and began recognizing rental income under the respective leases upon completion of the Merger. Rental income related to the Company’s operating leases is comprised of the following for the years ended December 31, 2021, 2020 and 2019, respectively:
| Year Ended December 31,
($ in thousands) | 2021 |  | 2020 |  | 2019
Fixed contractual lease payments – operating leases | $ | 292,873 |  |  | $ | 218,004 |  |  | $ | 244,666 |
Variable lease payments – operating leases | 69,422 |  |  | 52,128 |  |  | 61,368 |
Bad debt recovery (reserve) | (2,897) |  |  | (13,259) |  |  | (3,620) |
Straight-line rent adjustment | 4,674 |  |  | 1,155 |  |  | 3,362 |
Straight-line rent recovery (reserve) for uncollectibility | 716 |  |  | (4,177) |  |  | (1,153) |
Amortization of in-place lease liabilities, net | 2,611 |  |  | 3,819 |  |  | 3,776 |
Total | $ | 367,399 |  |  | $ | 257,670 |  |  | $ | 308,399 |
The weighted average remaining term of the lease agreements is approximately 4.9 years. During the years ended December 31, 2021, 2020, and 2019, the Company earned overage rent of $0.8 million, $0.2 million, and $1.3 million, respectively. During 2020 and 2021, in response to the impact of the novel coronavirus (“COVID 19”) pandemic, the Company received rent relief requests from a significant proportion of its tenants. Some tenants have asserted various legal arguments that they allege relieve them of the obligation to pay rent during the pandemic; the Company and its legal advisers generally disagree with these legal arguments. The Company has evaluated and will continue to evaluate tenant requests for rent relief based on many factors, including the tenant’s financial strength and operating history, potential co-tenancy impacts, the tenant’s contribution to the shopping center in which it operates, the Company’s assessment of the tenant’s long-term viability, the difficulty or ease with which the tenant could be replaced, and other factors. As a result of this evaluation, the Company agreed to defer rent for a portion of its tenants, subject to certain conditions. The Company had deferred the collection of $2.9 million of rental income that remains outstanding as of December 31, 2021. To the extent the Company agrees to defer rent or is otherwise unable to collect rent for certain periods, the Company will realize decreased cash flow, which could significantly decrease the cash available for the Company’s operating and capital uses. As of December 31, 2021, future minimum rentals to be received under non-cancelable operating leases for each of the next five years and thereafter, excluding variable lease payments and amounts deferred under lease concession agreements, are as follows:
($ in thousands) | Lease Payments
2022 | $ | 589,763 |
2023 | 540,899 |
2024 | 474,392 |
2025 | 405,830 |
2026 | 339,723 |
Thereafter | 1,782,554 |
Total | $ | 4,133,161 |
Commitments under Ground Leases In connection with the Merger, the Company assumed three ground leases in which we lease (as lessee) all or a portion of the land under three retail operating properties acquired. As of December 31, 2021, we are obligated under 12 ground leases for approximately 98 acres of land. Most of these ground leases require fixed annual rent payments. The expiration dates of the remaining initial terms of these ground leases range from 2023 to 2092 with a weighted average remaining term of 35.6 years. Certain of these leases have five- to 10-year extension options ranging in total from 20 to 25 years. Right-of-use assets are included within “Prepaid and other assets” and the lease liabilities are included within “Deferred revenue and other liabilities” in the accompanying consolidated balance sheets. During the years ended December 31, 2021, 2020, and 2019, the Company incurred ground lease expense on these operating leases of $2.8 million, $1.9 million, and $1.8 million, respectively. The Company made payments of $2.6 million, $1.8 million and $1.7 million during the years ended December 31, 2021, 2020 and 2019, respectively, which were included in operating cash flows. As of December 31, 2021, future minimum lease payments due under ground leases for each of the next five years and thereafter are as follows:
($ in thousands) | Lease Obligations
2022 | $ | 4,986 |
2023 | 4,811 |
2024 | 4,776 |
2025 | 4,900 |
2026 | 4,905 |
Thereafter | 115,528 |
Total | $ | 139,906 |
Adjustment for discounting | (69,669) |
Lease liabilities as of December 31, 2021 | $ | 70,237 |

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