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LEASE INFORMATION | 12 Months Ended
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Dec. 31, 2022
Leases [Abstract] |
LEASE INFORMATION | LEASE INFORMATION Rental Income The Company receives rental income from the leasing of retail and office space. The lease agreements 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 on October 22, 2021. Rental income related to the Company’s operating leases is comprised of the following for the years ended December 31, 2022, 2021 and 2020, respectively (in thousands):
| Year Ended December 31,
| 2022 |  | 2021 |  | 2020
Fixed contractual lease payments – operating leases | $ | 615,773 |  |  | $ | 292,873 |  |  | $ | 218,004 |
Variable lease payments – operating leases | 151,304 |  |  | 69,422 |  |  | 52,128 |
Bad debt reserve | (6,027) |  |  | (2,897) |  |  | (13,259) |
Straight-line rent adjustments | 17,031 |  |  | 4,674 |  |  | 1,155 |
Straight-line rent (reserve) recovery for uncollectibility | (553) |  |  | 716 |  |  | (4,177) |
Amortization of in-place lease liabilities, net | 4,821 |  |  | 2,611 |  |  | 3,819 |
Total | $ | 782,349 |  |  | $ | 367,399 |  |  | $ | 257,670 |
The weighted average remaining term of the lease agreements is approximately 7.1 years. During the years ended December 31, 2022, 2021, and 2020, the Company earned overage rent of $5.9 million, $0.8 million, and $0.2 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 portion of its tenants and agreed to defer rent for a portion of its tenants, subject to certain conditions, to be repaid over a period of time, typically 12 to 18 months. The Company had deferred the collection of $1.2 million of rental income that remains outstanding as of December 31, 2022. 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 its operating and capital uses. The future impact of such modifications is dependent upon the extent of lease concessions granted to tenants as a result of COVID-19 in future periods and the elections made by the Company at the time of entering into such concessions. The Company did not provide a material amount of rent abatement to tenants as a result of COVID-19. As of December 31, 2022, 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
2023 | $ | 613,776 |
2024 | 552,465 |
2025 | 474,145 |
2026 | 402,393 |
2027 | 323,087 |
Thereafter | 1,088,663 |
Total | $ | 3,454,529 |
Commitments under Ground Leases As of December 31, 2022, 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 2025 to 2092 with a weighted average remaining term of 35.0 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 lease liabilities are included within “Deferred revenue and other liabilities” in the accompanying consolidated balance sheets. During the years ended December 31, 2022, 2021, and 2020, the Company incurred ground lease expense on these operating leases of $3.9 million, $2.8 million, and $1.9 million, respectively. The Company made payments of $5.1 million, $2.6 million and $1.8 million during the years ended December 31, 2022, 2021 and 2020, respectively, which were included in operating cash flows. As of December 31, 2022, future minimum lease payments due under ground leases for each of the next five years and thereafter are as follows (in thousands):
| Lease Obligations
2023 | $ | 5,035 |
2024 | 5,044 |
2025 | 5,168 |
2026 | 5,174 |
2027 | 5,218 |
Thereafter | 110,623 |
| $ | 136,262 |
Adjustment for discounting | (69,095) |
Lease liabilities as of December 31, 2022 | $ | 67,167 |
LEASE INFORMATION | LEASE INFORMATION Rental Income The Company receives rental income from the leasing of retail and office space. The lease agreements 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 on October 22, 2021. Rental income related to the Company’s operating leases is comprised of the following for the years ended December 31, 2022, 2021 and 2020, respectively (in thousands):
| Year Ended December 31,
| 2022 |  | 2021 |  | 2020
Fixed contractual lease payments – operating leases | $ | 615,773 |  |  | $ | 292,873 |  |  | $ | 218,004 |
Variable lease payments – operating leases | 151,304 |  |  | 69,422 |  |  | 52,128 |
Bad debt reserve | (6,027) |  |  | (2,897) |  |  | (13,259) |
Straight-line rent adjustments | 17,031 |  |  | 4,674 |  |  | 1,155 |
Straight-line rent (reserve) recovery for uncollectibility | (553) |  |  | 716 |  |  | (4,177) |
Amortization of in-place lease liabilities, net | 4,821 |  |  | 2,611 |  |  | 3,819 |
Total | $ | 782,349 |  |  | $ | 367,399 |  |  | $ | 257,670 |
The weighted average remaining term of the lease agreements is approximately 7.1 years. During the years ended December 31, 2022, 2021, and 2020, the Company earned overage rent of $5.9 million, $0.8 million, and $0.2 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 portion of its tenants and agreed to defer rent for a portion of its tenants, subject to certain conditions, to be repaid over a period of time, typically 12 to 18 months. The Company had deferred the collection of $1.2 million of rental income that remains outstanding as of December 31, 2022. 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 its operating and capital uses. The future impact of such modifications is dependent upon the extent of lease concessions granted to tenants as a result of COVID-19 in future periods and the elections made by the Company at the time of entering into such concessions. The Company did not provide a material amount of rent abatement to tenants as a result of COVID-19. As of December 31, 2022, 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
2023 | $ | 613,776 |
2024 | 552,465 |
2025 | 474,145 |
2026 | 402,393 |
2027 | 323,087 |
Thereafter | 1,088,663 |
Total | $ | 3,454,529 |
Commitments under Ground Leases As of December 31, 2022, 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 2025 to 2092 with a weighted average remaining term of 35.0 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 lease liabilities are included within “Deferred revenue and other liabilities” in the accompanying consolidated balance sheets. During the years ended December 31, 2022, 2021, and 2020, the Company incurred ground lease expense on these operating leases of $3.9 million, $2.8 million, and $1.9 million, respectively. The Company made payments of $5.1 million, $2.6 million and $1.8 million during the years ended December 31, 2022, 2021 and 2020, respectively, which were included in operating cash flows. As of December 31, 2022, future minimum lease payments due under ground leases for each of the next five years and thereafter are as follows (in thousands):
| Lease Obligations
2023 | $ | 5,035 |
2024 | 5,044 |
2025 | 5,168 |
2026 | 5,174 |
2027 | 5,218 |
Thereafter | 110,623 |
| $ | 136,262 |
Adjustment for discounting | (69,095) |
Lease liabilities as of December 31, 2022 | $ | 67,167 |

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