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Leases | 9 Months Ended
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Sep. 30, 2019
Leases [Abstract] |
Leases | 11. Leases As Lessor The Company implemented ASC Topic 842, Leases, effective January 1, 2019 (Note 1). As lessor, there were no accounting adjustments required, however, the presentation of the Company’s lease revenues in 2019 includes amounts previously reported as reimbursed expenses. There was no cumulative effect adjustment to retained earnings required upon adoption of the new standard. In addition, the Company began expensing internal leasing costs, which have historically been capitalized. The Company is engaged in the operation of shopping centers and other retail properties that are either owned or, with respect to certain shopping centers, operated under long-term ground leases (see below) that expire at various dates through June 20, 2066, with renewal options. Space in the shopping centers is leased to tenants pursuant to agreements that provide for terms ranging generally from one month to sixty years and generally provide for additional rents based on certain operating expenses as well as tenants’ sales volumes. During the three and nine months ended September 30, 2019, the Company earned $14.7 million and $41.2 million, respectively, in variable lease revenues, primarily for real estate taxes and common area maintenance charges, which are included in lease revenues in the consolidated statements of income. As Lessee As lessee, upon implementation of ASC Topic 842, the Company recorded right-of-use assets and corresponding lease liabilities of $11.9 million and $12.8 million, respectively, for nine existing operating leases (for ground, office and equipment leases) and $82.6 million and $76.6 million, respectively, for four finance leases related to ground rentals including an existing capital lease which represented $77.0 million and $71.1 million, respectively, of the total. Three finance leases were recorded post-implementation upon assessment of triggering events whereby the Company’s cumulative leasehold investment made it reasonably certain that the Company would exercise its purchase options. During the three months ended June 30, 2019, the Company
| • | Entered into a new master lease that is a finance lease, (1238 Wisconsin Avenue, acquired on May 2, 2019 within the Core Portfolio) and recorded a Right-of-use asset–finance lease of $11.2 million and a corresponding Lease liability–finance lease of $10.7 million; and
| • | Entered into a new master lease that is an operating lease (110 University Place, acquired on May 1, 2019 by Fund IV for $10.5 million) and recorded a Right of use asset–operating lease of $45.3 million and a corresponding Lease liability–operating lease of $45.3 million.
| Three Months Ended September 30, |  | Nine Months Ended September 30,
| 2019 |  |  | 2018 |  | 2019 |  |  | 2018
Lease Cost |  |  |  |  | (Not applicable) |  |  |  |  |  | (Not applicable)
Finance lease cost: |  |  |  |  |  |  |  |  |  |  |
Amortization of right-of-use assets | $ | 565 |  |  |  |  | $ | 1,603 |  |  |
Interest on lease liabilities |  | 978 |  |  |  |  |  | 2,755 |  |  |
Subtotal |  | 1,543 |  |  |  |  |  | 4,358 |  |  |
Operating lease cost |  | 1,394 |  |  |  |  |  | 3,037 |  |  |
Variable lease cost |  | 62 |  |  |  |  |  | 119 |  |  |
Total lease cost | $ | 2,999 |  |  |  |  | $ | 7,514 |  |  |
Other Information |  |  |  |  |  |  |  |  |  |  |
Weighted-average remaining lease term - finance leases (years) |  |  |  |  |  |  |  | 42.9 |  |  |
Weighted-average remaining lease term - operating leases (years) |  |  |  |  |  |  |  | 33.7 |  |  |
Weighted-average discount rate - finance leases |  |  |  |  |  |  |  | 4.5 | % |  |
Weighted-average discount rate - operating leases |  |  |  |  |  |  |  | 5.8 | % |  |
Right-of-use assets are included in Operating real estate (Note 2) in the consolidated balance sheet. Lease liabilities are included in Accounts payable and other liabilities in the consolidated balance sheet (Note 5). Operating lease cost comprises amortization of right-of-use assets for operating properties (related to ground rents) or amortization of right-of-use assets for office and corporate assets and is included in Property operating expense or General and administrative expense, respectively, in the consolidated statements of income. Finance lease cost comprises amortization of right-of-use assets for certain ground leases, which is included in Property operating expense, as well as interest on lease liabilities, which is included in Interest expense in the consolidated statements of income. Lease Disclosures Related to Prior Periods The Company leased land at six of its shopping centers, which were accounted for as operating leases through December 31, 2018 which generally provided the Company with renewal options. Ground rent expense was $1.2 million (including capitalized ground rent at a property under development of $0.5 million) for the nine months ended September 30, 2018. The leases terminate at various dates between 2020 and 2066. These leases provide the Company with options to renew for additional terms aggregating up to 25 to 71 years. The Company also leases space for its corporate office. Office rent expense under this lease was $0.7 million for the nine months ended September 30, 2018. During 2016, the Company entered into a 49-year master lease, which was accounted for as a capital lease through December 31, 2018 and was later reclassified as a finance lease upon implementation of ASC 842 as described above. During the nine months ended September 30, 2018, payments for this lease totaled $1.9 million. The property under the capital lease is included in Note 2. Lease Obligations The scheduled future minimum (i) rental revenues from rental properties under the terms of non-cancelable tenant leases greater than one year (assuming no new or renegotiated leases or option extensions for such premises) and (ii) rental payments under the terms of all non-cancelable operating and finance leases in which the Company is the lessee, principally for office space, land and equipment, as of September 30, 2019, are summarized as follows (in thousands):
Year Ending December 31, |  | Minimum Rental Revenues |  |  | Minimum Rental Payments (a, b) |
2019 (Remainder) |  | $ | 48,697 |  |  | $ | 1,821 |
2020 |  |  | 205,710 |  |  |  | 7,139 |
2021 |  |  | 193,653 |  |  |  | 7,073 |
2022 |  |  | 173,664 |  |  |  | 7,082 |
2023 |  |  | 152,273 |  |  |  | 7,075 |
Thereafter |  |  | 652,003 |  |  |  | 334,761 |
Total |  | $ | 1,426,000 |  |  | $ | 364,951 |
(a) | A ground lease expiring during 2078 provides the Company with an option to purchase the underlying land during 2031. If the Company does not exercise the option, the rents that will be due are based on future values and as such are not determinable at this time. Accordingly, the above table does not include rents for this lease beyond 2031.
(b) | Minimum rental payments include $220.8 million of interest related to finance leases.
During the three and nine months ended September 30, 2019 and 2018, no single tenant or property collectively comprised more than 10% of the Company’s consolidated total revenues.

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- Definition The entire disclosure for lessor entity's leasing arrangements for operating, capital and leveraged leases. + References Reference 1: http://fasb.org/us-gaap/role/ref/otherTransitionRef -Publisher FASB -Name Accounting Standards Codification -Topic 840 -URI http://asc.fasb.org/topic&trid=2208923 + Details
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