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Leases

12 Months Ended

Dec. 31, 2024

Leases [Abstract]

Leases

Leases

Lessor Arrangements

We lease real estate properties, comprised primarily of office properties and data center shells, to third parties. These leases encompass all, or a portion, of properties, with various expiration dates. Our lease revenue is comprised of: fixed-lease revenue, including contractual rent billings under leases recognized on a straight-line basis over lease terms and amortization of lease incentives and above- and below-market lease intangibles; and variable-lease revenue, including tenant expense recoveries, lease termination revenue and other revenue from tenants that is not fixed under leases. The table below sets forth our composition of lease revenue recognized between fixed- and variable-lease revenue (in thousands):

												For the Years Ended December 31,
Lease revenue												2024						2023						2022 (1)
Fixed												$	513,461					$	478,585					$	453,907
Variable												157,905						141,262						126,262
												$	671,366					$	619,847					$	580,169

(1)Excludes lease revenue from discontinued operations of which $1.5 million was fixed and $527,000 was variable.

A significant concentration of our lease revenue from continuing operations was earned from our largest tenant, the USG, including 37% of our total lease revenue in 2024, 2023 and 2022 and 27% of our fixed-lease revenue in 2024, 2023 and 2022. Our lease revenue from the USG in 2024, 2023 and 2022 was earned primarily from properties in the Fort George G. Meade and the Baltimore/Washington Corridor (“Fort Meade/BW Corridor”), Lackland Air Force Base and Northern Virginia Defense/IT (“NoVA Defense/IT”) reportable sub-segments (see Note 13).

Fixed contractual payments due under our property leases were as follows (in thousands):

						As of December 31, 2024
Year Ending December 31,						Operating leases						Sales-type leases
2025						$	498,617					$	960
2026						446,927						960
2027						399,742						960
2028						329,686						960
2029						267,860						960
Thereafter						1,073,432						675
Total contractual payments						$	3,016,264					5,475
Less: Amount representing interest												(988)
Net investment in sales-type leases (1)												$	4,487

(1) Included in the line entitled “prepaid expenses and other assets, net” on our consolidated balance sheet.

Lessee Arrangements

As of December 31, 2024, our balance sheet included $58.3 million in right-of-use assets associated primarily with land leased from third parties underlying certain properties that we are operating. The land leases have long durations with remaining terms ranging from 24 to 76 years (excluding extension options). As of December 31, 2024, our right-of-use assets included:

>$17.4 million for land in a business park in Huntsville, Alabama under 25 leases through our LW Redstone Company, LLC joint venture, with remaining terms ranging from 38 to 50 years and options to renew for an additional 25 years that were not included in the term used in determining the asset balance;

>$17.0 million for data center space in Phoenix, Arizona with a remaining term of three years;

>$9.3 million for land underlying operating office properties in Washington, DC under two leases with remaining terms of approximately 75 years;

>$6.3 million for land underlying a parking garage in Baltimore, Maryland under a lease with a remaining term of 24 years and an option to renew for an additional 49 years that was included in the term used in determining the asset balance;

>$5.9 million for land in a research park in College Park, Maryland under four leases through our M Square Associates, LLC joint venture, all of the rent on which was previously paid. These leases had remaining terms ranging from 58 to 69 years; and

>$2.0 million for other land underlying operating properties in our Fort Meade/BW Corridor sub-segment under two leases with remaining terms of approximately 43 years, all of the rent on which was previously paid.

The table below sets forth our property right-of-use assets and property lease liabilities on our consolidated balance sheets (in thousands):

												As of December 31,
Leases						Balance Sheet Location						2024						2023
Right-of-use assets
Operating leases - Property						Property - operating right-of-use assets						$	55,760					$	41,296
Finance leases - Property						Prepaid expenses and other assets, net						2,491						2,565
Total right-of-use assets												$	58,251					$	43,861
Lease liabilities
Operating leases - Property						Property - operating lease liabilities						$	49,240					$	33,931
Finance leases - Property						Other liabilities						391						415
Total lease liabilities												$	49,631					$	34,346

As of December 31, 2024, our operating leases had a weighted average remaining lease term of 38 years and a weighted average discount rate of 7.3%, while our finance leases had a weighted average remaining lease term of eight years and a weighted average discount rate of 9.1%. The table below presents our total property lease cost (in thousands):

						Statement of Operations Location												For the Years Ended December 31,
Lease cost																		2024						2023						2022
Operating lease cost
Property leases - fixed						Property operating expenses												$	7,845					$	6,955					$	4,114
Property leases - variable						Property operating expenses												246						66						65
Finance lease cost
Amortization of property right-of-use assets						Property operating expenses												74						76						31
Interest on lease liabilities						Interest expense												37						42						—
																		$	8,202					$	7,139					$	4,210

The table below presents the effect of property lease payments on our consolidated statements of cash flows (in thousands):

									For the Years Ended December 31,
Supplemental cash flow information									2024						2023						2022
Cash paid for amounts included in the measurement of lease liabilities:
Operating cash flows for operating leases									$	7,002					$	6,056					$	3,355
Operating cash flows for finance leases									$	37					$	42					$	—
Financing cash flows for finance leases									$	24					$	20					$	—

Payments on property leases were due as follows (in thousands):

						December 31, 2024
Year Ending December 31,						Operating Leases						Finance Leases
2025						$	7,910					$	63
2026						8,192						65
2027						8,392						67
2028						2,812						69
2029						2,068						71
Thereafter						152,110						226
Total lease payments						181,484						561
Less: Amount representing interest						(132,244)						(170)
Lease liability						$	49,240					$	391

Leases

Leases

Lessor Arrangements

We lease real estate properties, comprised primarily of office properties and data center shells, to third parties. These leases encompass all, or a portion, of properties, with various expiration dates. Our lease revenue is comprised of: fixed-lease revenue, including contractual rent billings under leases recognized on a straight-line basis over lease terms and amortization of lease incentives and above- and below-market lease intangibles; and variable-lease revenue, including tenant expense recoveries, lease termination revenue and other revenue from tenants that is not fixed under leases. The table below sets forth our composition of lease revenue recognized between fixed- and variable-lease revenue (in thousands):

												For the Years Ended December 31,
Lease revenue												2024						2023						2022 (1)
Fixed												$	513,461					$	478,585					$	453,907
Variable												157,905						141,262						126,262
												$	671,366					$	619,847					$	580,169

(1)Excludes lease revenue from discontinued operations of which $1.5 million was fixed and $527,000 was variable.

A significant concentration of our lease revenue from continuing operations was earned from our largest tenant, the USG, including 37% of our total lease revenue in 2024, 2023 and 2022 and 27% of our fixed-lease revenue in 2024, 2023 and 2022. Our lease revenue from the USG in 2024, 2023 and 2022 was earned primarily from properties in the Fort George G. Meade and the Baltimore/Washington Corridor (“Fort Meade/BW Corridor”), Lackland Air Force Base and Northern Virginia Defense/IT (“NoVA Defense/IT”) reportable sub-segments (see Note 13).

Fixed contractual payments due under our property leases were as follows (in thousands):

						As of December 31, 2024
Year Ending December 31,						Operating leases						Sales-type leases
2025						$	498,617					$	960
2026						446,927						960
2027						399,742						960
2028						329,686						960
2029						267,860						960
Thereafter						1,073,432						675
Total contractual payments						$	3,016,264					5,475
Less: Amount representing interest												(988)
Net investment in sales-type leases (1)												$	4,487

(1) Included in the line entitled “prepaid expenses and other assets, net” on our consolidated balance sheet.

Lessee Arrangements

As of December 31, 2024, our balance sheet included $58.3 million in right-of-use assets associated primarily with land leased from third parties underlying certain properties that we are operating. The land leases have long durations with remaining terms ranging from 24 to 76 years (excluding extension options). As of December 31, 2024, our right-of-use assets included:

>$17.4 million for land in a business park in Huntsville, Alabama under 25 leases through our LW Redstone Company, LLC joint venture, with remaining terms ranging from 38 to 50 years and options to renew for an additional 25 years that were not included in the term used in determining the asset balance;

>$17.0 million for data center space in Phoenix, Arizona with a remaining term of three years;

>$9.3 million for land underlying operating office properties in Washington, DC under two leases with remaining terms of approximately 75 years;

>$6.3 million for land underlying a parking garage in Baltimore, Maryland under a lease with a remaining term of 24 years and an option to renew for an additional 49 years that was included in the term used in determining the asset balance;

>$5.9 million for land in a research park in College Park, Maryland under four leases through our M Square Associates, LLC joint venture, all of the rent on which was previously paid. These leases had remaining terms ranging from 58 to 69 years; and

>$2.0 million for other land underlying operating properties in our Fort Meade/BW Corridor sub-segment under two leases with remaining terms of approximately 43 years, all of the rent on which was previously paid.

The table below sets forth our property right-of-use assets and property lease liabilities on our consolidated balance sheets (in thousands):

												As of December 31,
Leases						Balance Sheet Location						2024						2023
Right-of-use assets
Operating leases - Property						Property - operating right-of-use assets						$	55,760					$	41,296
Finance leases - Property						Prepaid expenses and other assets, net						2,491						2,565
Total right-of-use assets												$	58,251					$	43,861
Lease liabilities
Operating leases - Property						Property - operating lease liabilities						$	49,240					$	33,931
Finance leases - Property						Other liabilities						391						415
Total lease liabilities												$	49,631					$	34,346

As of December 31, 2024, our operating leases had a weighted average remaining lease term of 38 years and a weighted average discount rate of 7.3%, while our finance leases had a weighted average remaining lease term of eight years and a weighted average discount rate of 9.1%. The table below presents our total property lease cost (in thousands):

						Statement of Operations Location												For the Years Ended December 31,
Lease cost																		2024						2023						2022
Operating lease cost
Property leases - fixed						Property operating expenses												$	7,845					$	6,955					$	4,114
Property leases - variable						Property operating expenses												246						66						65
Finance lease cost
Amortization of property right-of-use assets						Property operating expenses												74						76						31
Interest on lease liabilities						Interest expense												37						42						—
																		$	8,202					$	7,139					$	4,210

The table below presents the effect of property lease payments on our consolidated statements of cash flows (in thousands):

									For the Years Ended December 31,
Supplemental cash flow information									2024						2023						2022
Cash paid for amounts included in the measurement of lease liabilities:
Operating cash flows for operating leases									$	7,002					$	6,056					$	3,355
Operating cash flows for finance leases									$	37					$	42					$	—
Financing cash flows for finance leases									$	24					$	20					$	—

Payments on property leases were due as follows (in thousands):

						December 31, 2024
Year Ending December 31,						Operating Leases						Finance Leases
2025						$	7,910					$	63
2026						8,192						65
2027						8,392						67
2028						2,812						69
2029						2,068						71
Thereafter						152,110						226
Total lease payments						181,484						561
Less: Amount representing interest						(132,244)						(170)
Lease liability						$	49,240					$	391

Leases

Leases

Lessor Arrangements

We lease real estate properties, comprised primarily of office properties and data center shells, to third parties. These leases encompass all, or a portion, of properties, with various expiration dates. Our lease revenue is comprised of: fixed-lease revenue, including contractual rent billings under leases recognized on a straight-line basis over lease terms and amortization of lease incentives and above- and below-market lease intangibles; and variable-lease revenue, including tenant expense recoveries, lease termination revenue and other revenue from tenants that is not fixed under leases. The table below sets forth our composition of lease revenue recognized between fixed- and variable-lease revenue (in thousands):

												For the Years Ended December 31,
Lease revenue												2024						2023						2022 (1)
Fixed												$	513,461					$	478,585					$	453,907
Variable												157,905						141,262						126,262
												$	671,366					$	619,847					$	580,169

(1)Excludes lease revenue from discontinued operations of which $1.5 million was fixed and $527,000 was variable.

A significant concentration of our lease revenue from continuing operations was earned from our largest tenant, the USG, including 37% of our total lease revenue in 2024, 2023 and 2022 and 27% of our fixed-lease revenue in 2024, 2023 and 2022. Our lease revenue from the USG in 2024, 2023 and 2022 was earned primarily from properties in the Fort George G. Meade and the Baltimore/Washington Corridor (“Fort Meade/BW Corridor”), Lackland Air Force Base and Northern Virginia Defense/IT (“NoVA Defense/IT”) reportable sub-segments (see Note 13).

Fixed contractual payments due under our property leases were as follows (in thousands):

						As of December 31, 2024
Year Ending December 31,						Operating leases						Sales-type leases
2025						$	498,617					$	960
2026						446,927						960
2027						399,742						960
2028						329,686						960
2029						267,860						960
Thereafter						1,073,432						675
Total contractual payments						$	3,016,264					5,475
Less: Amount representing interest												(988)
Net investment in sales-type leases (1)												$	4,487

(1) Included in the line entitled “prepaid expenses and other assets, net” on our consolidated balance sheet.

Lessee Arrangements

As of December 31, 2024, our balance sheet included $58.3 million in right-of-use assets associated primarily with land leased from third parties underlying certain properties that we are operating. The land leases have long durations with remaining terms ranging from 24 to 76 years (excluding extension options). As of December 31, 2024, our right-of-use assets included:

>$17.4 million for land in a business park in Huntsville, Alabama under 25 leases through our LW Redstone Company, LLC joint venture, with remaining terms ranging from 38 to 50 years and options to renew for an additional 25 years that were not included in the term used in determining the asset balance;

>$17.0 million for data center space in Phoenix, Arizona with a remaining term of three years;

>$9.3 million for land underlying operating office properties in Washington, DC under two leases with remaining terms of approximately 75 years;

>$6.3 million for land underlying a parking garage in Baltimore, Maryland under a lease with a remaining term of 24 years and an option to renew for an additional 49 years that was included in the term used in determining the asset balance;

>$5.9 million for land in a research park in College Park, Maryland under four leases through our M Square Associates, LLC joint venture, all of the rent on which was previously paid. These leases had remaining terms ranging from 58 to 69 years; and

>$2.0 million for other land underlying operating properties in our Fort Meade/BW Corridor sub-segment under two leases with remaining terms of approximately 43 years, all of the rent on which was previously paid.

The table below sets forth our property right-of-use assets and property lease liabilities on our consolidated balance sheets (in thousands):

												As of December 31,
Leases						Balance Sheet Location						2024						2023
Right-of-use assets
Operating leases - Property						Property - operating right-of-use assets						$	55,760					$	41,296
Finance leases - Property						Prepaid expenses and other assets, net						2,491						2,565
Total right-of-use assets												$	58,251					$	43,861
Lease liabilities
Operating leases - Property						Property - operating lease liabilities						$	49,240					$	33,931
Finance leases - Property						Other liabilities						391						415
Total lease liabilities												$	49,631					$	34,346

As of December 31, 2024, our operating leases had a weighted average remaining lease term of 38 years and a weighted average discount rate of 7.3%, while our finance leases had a weighted average remaining lease term of eight years and a weighted average discount rate of 9.1%. The table below presents our total property lease cost (in thousands):

						Statement of Operations Location												For the Years Ended December 31,
Lease cost																		2024						2023						2022
Operating lease cost
Property leases - fixed						Property operating expenses												$	7,845					$	6,955					$	4,114
Property leases - variable						Property operating expenses												246						66						65
Finance lease cost
Amortization of property right-of-use assets						Property operating expenses												74						76						31
Interest on lease liabilities						Interest expense												37						42						—
																		$	8,202					$	7,139					$	4,210

The table below presents the effect of property lease payments on our consolidated statements of cash flows (in thousands):

									For the Years Ended December 31,
Supplemental cash flow information									2024						2023						2022
Cash paid for amounts included in the measurement of lease liabilities:
Operating cash flows for operating leases									$	7,002					$	6,056					$	3,355
Operating cash flows for finance leases									$	37					$	42					$	—
Financing cash flows for finance leases									$	24					$	20					$	—

Payments on property leases were due as follows (in thousands):

						December 31, 2024
Year Ending December 31,						Operating Leases						Finance Leases
2025						$	7,910					$	63
2026						8,192						65
2027						8,392						67
2028						2,812						69
2029						2,068						71
Thereafter						152,110						226
Total lease payments						181,484						561
Less: Amount representing interest						(132,244)						(170)
Lease liability						$	49,240					$	391

Leases

Leases

Lessor Arrangements

We lease real estate properties, comprised primarily of office properties and data center shells, to third parties. These leases encompass all, or a portion, of properties, with various expiration dates. Our lease revenue is comprised of: fixed-lease revenue, including contractual rent billings under leases recognized on a straight-line basis over lease terms and amortization of lease incentives and above- and below-market lease intangibles; and variable-lease revenue, including tenant expense recoveries, lease termination revenue and other revenue from tenants that is not fixed under leases. The table below sets forth our composition of lease revenue recognized between fixed- and variable-lease revenue (in thousands):

												For the Years Ended December 31,
Lease revenue												2024						2023						2022 (1)
Fixed												$	513,461					$	478,585					$	453,907
Variable												157,905						141,262						126,262
												$	671,366					$	619,847					$	580,169

(1)Excludes lease revenue from discontinued operations of which $1.5 million was fixed and $527,000 was variable.

A significant concentration of our lease revenue from continuing operations was earned from our largest tenant, the USG, including 37% of our total lease revenue in 2024, 2023 and 2022 and 27% of our fixed-lease revenue in 2024, 2023 and 2022. Our lease revenue from the USG in 2024, 2023 and 2022 was earned primarily from properties in the Fort George G. Meade and the Baltimore/Washington Corridor (“Fort Meade/BW Corridor”), Lackland Air Force Base and Northern Virginia Defense/IT (“NoVA Defense/IT”) reportable sub-segments (see Note 13).

Fixed contractual payments due under our property leases were as follows (in thousands):

						As of December 31, 2024
Year Ending December 31,						Operating leases						Sales-type leases
2025						$	498,617					$	960
2026						446,927						960
2027						399,742						960
2028						329,686						960
2029						267,860						960
Thereafter						1,073,432						675
Total contractual payments						$	3,016,264					5,475
Less: Amount representing interest												(988)
Net investment in sales-type leases (1)												$	4,487

(1) Included in the line entitled “prepaid expenses and other assets, net” on our consolidated balance sheet.

Lessee Arrangements

As of December 31, 2024, our balance sheet included $58.3 million in right-of-use assets associated primarily with land leased from third parties underlying certain properties that we are operating. The land leases have long durations with remaining terms ranging from 24 to 76 years (excluding extension options). As of December 31, 2024, our right-of-use assets included:

>$17.4 million for land in a business park in Huntsville, Alabama under 25 leases through our LW Redstone Company, LLC joint venture, with remaining terms ranging from 38 to 50 years and options to renew for an additional 25 years that were not included in the term used in determining the asset balance;

>$17.0 million for data center space in Phoenix, Arizona with a remaining term of three years;

>$9.3 million for land underlying operating office properties in Washington, DC under two leases with remaining terms of approximately 75 years;

>$6.3 million for land underlying a parking garage in Baltimore, Maryland under a lease with a remaining term of 24 years and an option to renew for an additional 49 years that was included in the term used in determining the asset balance;

>$5.9 million for land in a research park in College Park, Maryland under four leases through our M Square Associates, LLC joint venture, all of the rent on which was previously paid. These leases had remaining terms ranging from 58 to 69 years; and

>$2.0 million for other land underlying operating properties in our Fort Meade/BW Corridor sub-segment under two leases with remaining terms of approximately 43 years, all of the rent on which was previously paid.

The table below sets forth our property right-of-use assets and property lease liabilities on our consolidated balance sheets (in thousands):

												As of December 31,
Leases						Balance Sheet Location						2024						2023
Right-of-use assets
Operating leases - Property						Property - operating right-of-use assets						$	55,760					$	41,296
Finance leases - Property						Prepaid expenses and other assets, net						2,491						2,565
Total right-of-use assets												$	58,251					$	43,861
Lease liabilities
Operating leases - Property						Property - operating lease liabilities						$	49,240					$	33,931
Finance leases - Property						Other liabilities						391						415
Total lease liabilities												$	49,631					$	34,346

As of December 31, 2024, our operating leases had a weighted average remaining lease term of 38 years and a weighted average discount rate of 7.3%, while our finance leases had a weighted average remaining lease term of eight years and a weighted average discount rate of 9.1%. The table below presents our total property lease cost (in thousands):

						Statement of Operations Location												For the Years Ended December 31,
Lease cost																		2024						2023						2022
Operating lease cost
Property leases - fixed						Property operating expenses												$	7,845					$	6,955					$	4,114
Property leases - variable						Property operating expenses												246						66						65
Finance lease cost
Amortization of property right-of-use assets						Property operating expenses												74						76						31
Interest on lease liabilities						Interest expense												37						42						—
																		$	8,202					$	7,139					$	4,210

The table below presents the effect of property lease payments on our consolidated statements of cash flows (in thousands):

									For the Years Ended December 31,
Supplemental cash flow information									2024						2023						2022
Cash paid for amounts included in the measurement of lease liabilities:
Operating cash flows for operating leases									$	7,002					$	6,056					$	3,355
Operating cash flows for finance leases									$	37					$	42					$	—
Financing cash flows for finance leases									$	24					$	20					$	—

Payments on property leases were due as follows (in thousands):

						December 31, 2024
Year Ending December 31,						Operating Leases						Finance Leases
2025						$	7,910					$	63
2026						8,192						65
2027						8,392						67
2028						2,812						69
2029						2,068						71
Thereafter						152,110						226
Total lease payments						181,484						561
Less: Amount representing interest						(132,244)						(170)
Lease liability						$	49,240					$	391

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The entire disclosure for finance leases of lessee. Includes, but is not limited to, description of lessee's finance lease and maturity analysis of finance lease liability.

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-Topic 842
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-Topic 842
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