Lease Incentives

3 Months Ended

Mar. 31, 2023

5.	Lease Incentives

Our non-contingent lease incentive balances at March 31, 2023 and December 31, 2022 $1,571,000 and $1,789,000, respectively. The following table summarizes our lease incentives activity for the three months ended March 31, 2023 and 2022 (in thousands):


	Three Months Ended March 31,
		2023		2022
Lease incentives funded	$	—	$	8
Amortization of lease incentives		(209)		(223)
Adjustment for collectability of lease incentives		—		(173)	⁽¹⁾
Other adjustments		(9)		(13)
Net (decrease) in non-contingent lease incentives	$	(218)	$	(401)

(1)	Represents the lease incentive balance write-off related to a closed property and subsequent lease termination.

Non-contingent lease incentives represent payments made to our lessees for various reasons including entering into a new lease or lease amendments and extensions. Contingent lease incentives represent potential contingent earn-out payments that may be made to our lessees in the future, as part of our lease agreements. From time to time, we may commit to provide contingent payments to our lessees, upon our properties achieving certain rent coverage ratios. Once the contingent payment becomes probable and estimable, the contingent payment is recorded as a lease incentive. Lease incentives are amortized as a yield adjustment to rental income over the remaining life of the lease.