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Leases | 6 Months Ended
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Jun. 30, 2023
Leases [Abstract] |
Leases | Leases Tenant Leases The Company acquires, owns and manages commercial single-tenant lease properties, with the majority being long-term triple-net leases where the tenant is generally responsible for all improvements and contractually obligated to pay all operating costs (such as real estate taxes, utilities and repairs and maintenance costs). As of June 30, 2023, the Company’s weighted average remaining lease term was 9.4 years. The Company’s property leases have been classified as operating leases and some have scheduled rent increases throughout the lease term. The Company’s leases typically provide the tenant one or more multi-year renewal options to extend their leases, subject to generally the same terms and conditions, including rent increases, consistent with the initial lease term. All lease-related income is reported as a single line item, rental revenue (including reimbursable), in the condensed consolidated statements of operations and comprehensive income and is presented net of any reserves for uncollectible amounts. There were no material reserves for uncollectible amounts during the three and six months ended June 30, 2023 and 2022. Fixed lease income includes stated amounts per the lease contract, which include base rent, fixed common area maintenance charges, and straight-line lease adjustments. Variable lease income primarily includes recoveries from tenants, which represent amounts that tenants are contractually obligated to reimburse the Company for specific to their portion of actual recoverable costs incurred. Variable lease income also includes percentage rent, which represents amounts billable to tenants based on their actual sales volume in excess of levels specified in the lease contract. The following table provides a disaggregation of lease income recognized under ASC 842 (in thousands):
| Three Months Ended June 30, |  | Six Months Ended June 30,
| 2023 |  | 2022 |  | 2023 |  | 2022
Rental revenue |  |  |  |  |  |  |
Fixed lease income (1) | $ | 26,808 |  |  | $ | 19,653 |  |  | $ | 51,531 |  |  | $ | 37,721 |
Variable lease income (2) | 2,715 |  |  | 2,229 |  |  | 6,252 |  |  | 4,918 |
Other rental revenue: |  |  |  |  |  |  |
Above/below market lease amortization, net | 377 |  |  | 294 |  |  | 789 |  |  | 577 |
Lease incentives | (193) |  |  | (128) |  |  | (392) |  |  | (246) |
Rental revenue (including reimbursable) | $ | 29,707 |  |  | $ | 22,048 |  |  | $ | 58,180 |  |  | $ | 42,970 |
(1) Fixed lease income includes contractual rents under lease agreements with tenants recognized on a straight-line basis over the lease term. (2) Variable lease income primarily includes tenant reimbursements for real estate taxes, insurance, common area maintenance, and lease termination fees, and the write-off of uncollectible amounts. There were immaterial write-offs of uncollectible amounts during the three and six months ended June 30, 2023 and 2022. Scheduled future minimum base rental payments (excluding base rental payments from properties classified as held for sale and straight line rent adjustments for all properties) due to be received under the remaining non-cancelable term of the operating leases in place as of June 30, 2023 are as follows (in thousands):
| Future Minimum Base Rental Receipts
Remainder of 2023 | $ | 53,208 |
2024 | 108,320 |
2025 | 108,298 |
2026 | 105,548 |
2027 | 101,245 |
Thereafter | 557,639 |
Total | $ | 1,034,258 |
Future minimum rentals exclude amounts that may be received from tenants for reimbursements of operating costs and property taxes. In addition, the future minimum rents do not include any contingent rents based on a percentage of the lessees' gross sales or lease escalations based on future changes in the Consumer Price Index (“CPI”) or other stipulated reference rate. Corporate Office Lease In August 2021, the Company entered into a lease agreement on a new corporate office space, which commenced in October 2021 and is classified as an operating lease. The lease has a remaining noncancellable lease term of 9.1 years that expires on July 31, 2032, with a one-time option to terminate in 2029 exercisable by the Company. The following table presents the lease expense components for the three and six months ended June 30, 2023 and 2022 (in thousands):
| Three Months Ended June 30, |  | Six Months Ended June 30,
| 2023 |  | 2022 |  | 2023 |  | 2022
Operating lease cost | $ | 135 |  |  | $ | 135 |  |  | $ | 271 |  |  | $ | 270 |
Variable lease cost | $ | 68 |  |  | $ | 7 |  |  | $ | 135 |  |  | $ | 10 |
The Company recorded a right-of-use asset and operating lease liability of approximately $4.5 million at lease commencement. As of June 30, 2023, the right-of-use asset and operating lease liability was $4.1 million and $5.3 million, respectively. The right-of-use asset is included in other assets, net and the operating lease liability is included in accounts payable, accrued expenses and other liabilities in the accompanying condensed consolidated balance sheets. The following table reflects the maturity analysis of payments due from the Company over the next five years and thereafter for the corporate office lease obligation as of June 30, 2023 (in thousands):
| Future Minimum Lease Payments
Remainder of 2023 | $ | 285 |
2024 | 617 |
2025 | 636 |
2026 | 653 |
2027 | 670 |
Thereafter | 3,311 |
Total lease payments | 6,172 |
Less: amount representing interest (1) | (868) |
Present value of operating lease liabilities | $ | 5,304 |
(1) Imputed interest was calculated using a discount rate of 3.25%. The discount rate is based on the estimated incremental borrowing rate, calculated as the treasury rate for the same period as the underlying lease term, plus a spread determined using factors including REIT industry performance.

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- Definition The entire disclosure for lessor's operating leases. + References Reference 1: http://www.xbrl.org/2003/role/disclosureRef -Topic 842 -SubTopic 30 -Name Accounting Standards Codification -Publisher FASB -URI https://asc.fasb.org//842-30/tableOfContent + Details
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