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Commitments and Contingencies
 3 Months Ended
Mar. 31, 2024
Commitments and Contingencies Disclosure [Abstract]  
Commitments and Contingencies Commitments and Contingencies
Lessee Arrangements
As of March 31, 2024, the Company leases land under 18 ground leases (two of which were acquired in the first quarter of 2023 and seven of which were acquired in the REIT Merger) associated with certain properties. In addition, the Company has two operating leases that were entered into in connection with the Mergers. The aggregate durations for the ground leases and operating leases range from 0.84 to 120 years as of March 31, 2024. The Company did not enter into any new ground or operating leases during the first quarter of 2024.
As of March 31, 2024 and December 31, 2023, the Company’s balance sheets include ROU assets of $75.5 million and $77.0 million, respectively, and operating lease liabilities of $47.7 million and $48.4 million, respectively. In determining the operating ROU assets and lease liabilities for the Company’s operating leases in accordance with lease accounting rules, the Company was required to estimate an appropriate incremental borrowing rate on a fully-collateralized basis for the terms of the leases. Since the terms of the Company’s ground leases are significantly longer than the terms of borrowings available to the Company on a fully-collateralized basis, the Company’s estimate of this rate required significant judgment.
As of March 31, 2024, the Company’s ground leases and operating leases have a weighted-average remaining lease term of approximately 25.8 years and a weighted-average discount rate of 6.05%. For the three months ended March 31, 2024, the Company paid cash of approximately $1.0 million for amounts included in the measurement of lease liabilities and recorded expense of $0.4 million on a straight-line basis in accordance with the standard.
For the three months ended March 31, 2023, the Company paid cash of approximately $0.3 million for amounts included in the measurement of lease liabilities and recorded expense of $0.3 million on a straight-line basis in accordance with the standard.
The following table reflects the base cash rental payments due from the Company as of March 31, 2024:
(In thousands)
Future Base Rent Payments (1)
2024 (remainder) $3,198 
20253,485 
20263,368 
20273,395 
20283,422 
Thereafter79,425 
Total minimum lease payments (2)
96,293 
Less: Effects of discounting(48,589)
Total present value of lease payments$47,704 
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(1)Assumes exchange rates of £1.00 to $1.26 for GBP and €1.00 to $1.08 for EUR as of March 31, 2024 for illustrative purposes, as applicable.
(2)Ground lease rental payments due for the Company’s ING Amsterdam lease are not included in the table above as the Company’s ground rent for this property is prepaid through 2050.
Litigation and Regulatory Matters
In the ordinary course of business, the Company may become subject to litigation, claims and regulatory matters. There are no material legal or regulatory proceedings pending or known to be contemplated against the Company.
Environmental Matters
In connection with the ownership and operation of real estate, the Company may potentially be liable for costs and damages related to environmental matters. As of March 31, 2024, the Company had not been notified by any governmental authority of any non-compliance, liability or other claim, and is not aware of any other environmental condition that it believes will have a material adverse effect on the results of operations.