Investment in Rental Property and Lease Arrangements (Tables)
|
6 Months Ended |
Jun. 30, 2024 |
|---|
| Leases [Abstract] |
|
| Rental Property Subject to Non-cancelable Operating Leases |
Depreciation expense on investment in rental property was as follows:
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
For the Three Months Ended
September 30, |
|
|
For the Nine Months Ended
September 30, |
|
(in thousands) |
|
2024 |
|
|
2023 |
|
|
2024 |
|
|
2023 |
|
Depreciation |
|
$ |
30,006 |
|
|
$ |
30,630 |
|
|
$ |
89,480 |
|
|
$ |
92,776 |
|
|
| Estimated Lease Payments to be Received under Non-cancelable Operating Leases |
Estimated lease payments to be received under non-cancelable operating leases with tenants at September 30, 2024 are as follows:
|
|
|
|
|
(in thousands) |
|
|
|
Remainder of 2024 |
|
$ |
99,220 |
|
2025 |
|
|
401,191 |
|
2026 |
|
|
400,767 |
|
2027 |
|
|
387,320 |
|
2028 |
|
|
370,705 |
|
Thereafter |
|
|
3,040,111 |
|
|
|
$ |
4,699,314 |
|
|
| Net Investment in Direct Financing Leases |
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 |
|
|
| Direct Financing Leases, Lease Receivable Maturity |
Undiscounted estimated lease payments to be received under non-cancelable direct financing leases with tenants at September 30, 2024 are as follows:
|
|
|
|
|
(in thousands) |
|
|
|
Remainder of 2024 |
|
$ |
793 |
|
2025 |
|
|
3,285 |
|
2026 |
|
|
3,357 |
|
2027 |
|
|
3,426 |
|
2028 |
|
|
3,496 |
|
Thereafter |
|
|
18,419 |
|
|
|
$ |
32,776 |
|
|
| Summary of Amounts Reported as Lease Revenues, Net on the Consolidated Statements of Income and Comprehensive Income |
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.
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