The Company generally leases its investment rental property to established tenants in the industrial, restaurant, retail, healthcare, and office property types. At September 30, 2024, the Company had 773 real estate properties, 760 of which were leased under leases that have been classified as operating leases, nine that have been classified as direct financing leases, one that has been classified as a sales-type lease, and three that were vacant. Of the nine leases classified as direct financing leases, three include land portions which are accounted for as operating leases. The sales-type lease includes a land portion which is accounted for as an operating lease. Most leases have initial terms of 10 to 20 years. The Company’s leases generally provide for limited increases in rent as a result of fixed increases, increases in the Consumer Price Index (“CPI”), or increases in the tenant’s sales volume. Generally, tenants are also required to pay all property taxes and assessments, substantially maintain the interior and exterior of the building, and maintain property and liability insurance coverage. The leases also typically provide for one or more multiple-year renewal options, at the election of the tenant, and are subject to generally the same terms and conditions as the initial lease.

Since lease renewal periods are exercisable at the option of the tenant, the above amounts only include future lease payments due during the initial lease terms. Such amounts exclude any potential variable rent increases that are based on changes in the CPI or future variable rents which may be received under the leases based on a percentage of the tenant’s gross sales. Additionally, certain of our leases provide tenants with the option to terminate their leases in exchange for termination penalties, or that are contingent upon the occurrence of a future event. Future lease payments within the table above have not been adjusted for these termination rights.

The Company’s net investment in direct financing leases was comprised of the following:


(in thousands)	September 30, 2024			December 31, 2023
Undiscounted estimated lease payments to be received	$	32,776		$	35,155
Estimated unguaranteed residual values		14,547			14,547
Unearned revenue		(20,940	)		(22,944	)
Reserve for credit losses		(98	)		(115	)
Net investment in direct financing leases	$	26,285		$	26,643

The above rental receipts do not include future lease payments for renewal periods, potential variable CPI rent increases, or variable percentage rent payments that may become due in future periods.

The following table summarizes amounts reported as Lease revenues, net in the Condensed Consolidated Statements of Income and Comprehensive Income:


	For the Three Months Ended September 30,						For the Nine Months Ended September 30,
(in thousands)	2024			2023			2024			2023
Contractual rental amounts billed for operating leases	$	96,596		$	96,333		$	289,881		$	290,891
Adjustment to recognize contractual operating lease billings on a straight-line basis		5,438			6,891			15,720			21,641
Net write-offs of accrued rental income		—			—			(2,556	)		(105	)
Variable rental amounts earned		644			513			1,901			1,306
Earned income from direct financing leases		691			687			2,063			2,067
Interest income from sales-type leases		14			14			43			43
Operating expenses billed to tenants		5,537			5,181			15,292			14,850
Other income from real estate transactions		907			19			985			7,414		(a)
Adjustment to revenue recognized for uncollectible rental amounts billed, net		(1,430	)		(95	)		(3,659	)		(220	)
Total lease revenues, net	$	108,397		$	109,543		$	319,670		$	337,887

(a)

The nine months ended September 30, 2023, includes $7.5 million of lease termination fee income recognized in connection with the simultaneous lease termination and sale of an underlying office property for an additional $32.0 million in proceeds.