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Leases | 9 Months Ended
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Sep. 30, 2023
Leases [Abstract] |
Leases | 11. Leases As Lessor 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 December 31, 2121, 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. In addition to the lease-specific collectability assessment, the Company also recognizes a general allowance based on the Company’s historical collection experience, for its portfolio of operating lease receivables which are not expected to be fully collectible. During the nine months ended September 30, 2023 and 2022, the Company earned $45.8 million and $44.3 million, respectively in variable lease revenues, primarily for real estate taxes and common area maintenance charges, which are included in rental income in the condensed consolidated statements of operations. Reserve Analysis The Company estimates the collectability of its accrued rent and accounts receivable balances related to lease revenue. Management exercises judgment in assessing collectability and considers customer creditworthiness, assessment of risk associated with the tenant, and current economic trends, among other factors. If the Company determines that the accrued rent and/or accounts receivable balances are no longer probable of collection then the balances are written-off and the lease is recognized on a cash basis. During the three months ended September 30, 2023 and 2022, the Company recorded a decrease in its general allowance for credit losses of $0.1 million and an increase of $0.4 million, respectively. During the nine months ended September 30, 2023 and 2022, the Company recorded a decrease in its general allowance for credit losses of $1.2 million and an increase of $1.5 million, respectively. As of September 30, 2023 and December 31, 2022, the Company had a general allowance of $4.2 million and $5.4 million, respectively. During the nine months ended September 30, 2023, Fund II received $2.0 million, or $1.1 million at the Company’s share, of proceeds from the Century 21 Department Stores LLC bankruptcy claim. The proceeds are recorded in Other income on the Company’s condensed consolidated financial statements. As Lessee During the nine months ended September 30, 2023, the Company: • modified its master lease at 565 Broadway within the Core Portfolio and extended the lease term for 43 years until December 31, 2121 for an additional payment of $4.0 million to be paid over the lease term. As a result, the transaction was accounted for as a lease modification which resulted in a change in lease classification per ASC 842 from Right-of-use-asset – operating lease to a Right-of-use-asset – finance lease. The Company recorded an additional Right-of-use asset – finance lease and corresponding Lease liability-finance lease of $3.8 million. • acquired four ground leases as part of the Fund V acquisition of Cypress Creek in July 2023 (Note 2), and recorded a Right-of-use-asset – finance lease of $25.3 million and a Lease liability – finance lease of $22.1 million as the present value of the sum of the lease payments exceeded substantially all of the fair value of the underlying assets. Additional disclosures regarding the Company’s leases as lessee are as follows:
| Three Months Ended September 30, |  |  | Nine Months Ended September 30, |
| 2023 |  |  | 2022 |  |  | 2023 |  |  | 2022 |
Lease Cost |  |  |  |  |  |  |  |  |  |  |
Finance lease cost: |  |  |  |  |  |  |  |  |  |  |
Amortization of right-of-use assets | $ | 332 |  |  |  | 226 |  |  | $ | 783 |  |  | $ | 677 |
Interest on lease liabilities |  | 495 |  |  |  | 103 |  |  |  | 709 |  |  |  | 305 |
Subtotal |  | 827 |  |  |  | 329 |  |  |  | 1,492 |  |  |  | 982 |
Operating lease cost |  | 1,324 |  |  |  | 1,334 |  |  |  | 3,988 |  |  |  | 4,004 |
Variable lease cost |  | 43 |  |  |  | 21 |  |  |  | 187 |  |  |  | 63 |
Total lease cost | $ | 2,194 |  |  | $ | 1,684 |  |  | $ | 5,667 |  |  | $ | 5,049 |
Other Information |  |  |  |  |  |  |  |  |  |  |
Weighted-average remaining lease term - finance leases (years) |  |  |  |  |  |  |  | 58.4 |  |  |  | 32.1 |
Weighted-average remaining lease term - operating leases (years) |  |  |  |  |  |  |  | 9.8 |  |  |  | 13.6 |
Weighted-average discount rate - finance leases |  |  |  |  |  |  |  | 6.5 | % |  |  | 6.3 | %
Weighted-average discount rate - operating leases |  |  |  |  |  |  |  | 5.1 | % |  |  | 5.1 | %
Right-of-use assets – finance leases are included in Operating real estate (Note 2) in the condensed consolidated balance sheets. Lease liabilities – finance leases are included in Accounts payable and other liabilities in the condensed consolidated balance sheets (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 condensed consolidated statements of operations. 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 condensed consolidated statements of operations. 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 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, 2023, are summarized as follows (in thousands):
|  |  |  |  | Minimum Rental Payments |
Year Ending December 31, |  | Minimum Rental Revenues (a) |  |  | Operating Leases (b) |  |  | Finance Leases (b) |
2023 (Remainder) |  | $ | 58,266 |  |  | $ | 1,349 |  |  | $ | 980 |
2024 |  |  | 243,242 |  |  |  | 5,414 |  |  |  | 3,925 |
2025 |  |  | 222,597 |  |  |  | 5,329 |  |  |  | 1,429 |
2026 |  |  | 197,435 |  |  |  | 5,173 |  |  |  | 1,264 |
2027 |  |  | 174,287 |  |  |  | 4,373 |  |  |  | 1,264 |
Thereafter |  |  | 742,441 |  |  |  | 20,069 |  |  |  | 155,328 |
|  |  | 1,638,268 |  |  |  | 41,707 |  |  |  | 164,190 |
Interest |  |  | — |  |  |  | (9,187 | ) |  |  | (131,352 | )
Total |  | $ | 1,638,268 |  |  | $ | 32,520 |  |  | $ | 32,838 |
(a) Amount represents contractual lease maturities at September 30, 2023 including any extension options that management determined were reasonably certain of exercise. (b) Minimum rental payments include $9.2 million of interest related to operating leases and $131.4 million related to finance leases and exclude options or renewals not reasonably certain of exercise. During the three and nine months ended September 30, 2023 and 2022, 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 operating leases of lessee. Includes, but is not limited to, description of operating lease and maturity analysis of operating lease liability. + References Reference 1: http://www.xbrl.org/2003/role/disclosureRef -Topic 842 -SubTopic 20 -Name Accounting Standards Codification -Publisher FASB -URI https://asc.fasb.org//842-20/tableOfContent + Details
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