Our apartment homes and commercial spaces are leased to tenants under operating leases. As of September 30, 2024, our apartment home leases generally have initial terms of 24 months or less. As of September 30, 2024, our commercial space leases have initial terms between 5 and 15 years and represent approximately 8% to 9% of our total revenue. Our apartment home leases are generally renewable at the end of the lease term, subject to potential changes in rental rates, and our commercial space leases generally have renewal options, subject to associated increases in rental rates due to market based or fixed price renewal options and other certain conditions.

We have a sublease arrangement providing space within our corporate office for fixed rents, which commenced on January 1, 2021 and expires on May 31, 2029. For the three and nine months ended September 30, 2024, we recognized sublease income of $0.4 million and $1.1 million, respectively, compared to $0.4 million and $1.1 million, respectively, for the three and nine months ended September 30, 2023.

The majority of lease payments we receive from our residents and tenants are fixed. We receive variable payments from our residents and commercial tenants primarily for utility reimbursements and other services. For the three and nine months ended September 30, 2024 and 2023, our total lease income was comprised of the following amounts for all residential and commercial property leases (in thousands):


	Three Months Ended September 30,				Nine Months Ended September 30,
	2024		2023		2024		2023
Fixed lease income	$	47,391	$	43,937	$	139,096	$	127,150
Variable lease income		3,662		3,640		11,242		10,046
Total lease income	$	51,053	$	47,577	$	150,338	$	137,196

Future minimum lease payments that are contractually due to us from our office space sublease and commercial space leases, excluding extension options, as of September 30, 2024, are as follows (in thousands):


	Corporate Office Sublease		Commercial Leases
Remainder of 2024	$	354	$	3,274
2025		1,423		10,509
2026		1,433		8,003
2027		1,443		5,967
2028		1,453		3,703
Thereafter		630		18,782
Total	$	6,736	$	50,238

We are lessee to finance leases for the land underlying our development sites at Upton Place, Strathmore Square, and Oak Shore. We have operating leases primarily for corporate office space. Substantially all of our office lease payments are fixed. See the table below for lease costs, net of capitalized finance lease costs, for the three and nine months ended September 30, 2024 and 2023 (in thousands):


	Three Months Ended September 30,				Nine Months Ended September 30,
	2024		2023		2024		2023
Operating lease costs	$	375	$	384	$	1,137	$	1,138
Finance lease costs:
Amortization of right-of-use assets, net of capitalized amounts		312		—		743		—
Interest on lease liabilities, net of capitalized amounts		1,794		—		4,467		—
Total lease costs, net of capitalized amounts	$	2,481	$	384	$	6,347	$	1,138

The weighted-average remaining terms and discount rates for our operating and finance leases are summarized in the table below as of September 30, 2024, and December 31, 2023:


	September 30, 2024			December 31, 2023
Weighted average remaining lease term (years):
Operating leases		4.5			5.2
Finance leases		92.7			93.4

Weighted-average discount rate:
Operating leases		3.4	%		3.3	%
Finance leases		6.1	%		6.1	%

As of September 30, 2024 and December 31, 2023, operating lease right-of-use lease assets of $5.1 million and $6.2 million, respectively, are included in Other assets, net in our Condensed Consolidated Balance Sheets. As of September 30, 2024 and December 31, 2023, operating lease liabilities of $9.8 million and $11.5 million, respectively, are included in Accrued liabilities and other in our Condensed Consolidated Balance Sheets.

For finance and operating leases, when the rate implicit in the lease cannot be determined, we estimate the value of our lease liabilities using discount rates equivalent to the rates we would pay on a secured borrowing with terms similar to the leases. We determine if an arrangement is or contains a lease at inception. We have lease agreements with lease and non-lease components, and have elected to not separate these components for all classes of underlying assets. Leases with an initial term of 12 months or less are not recorded in our Condensed Consolidated Balance Sheets. Leases with an initial term greater than 12 months are recorded as operating or finance leases in our Condensed Consolidated Balance Sheets.

Combined annual future minimum lease payments under our operating and finance leases are as follows as of September 30, 2024 (in thousands):


	Operating Leases			Finance Leases
Remainder of 2024	$	510		$	980
2025		2,355			4,437
2026		2,341			4,954
2027		2,380			5,483
2028		2,181			5,596
Thereafter		805			1,427,669
Total		10,572			1,449,119
Less: Discount		(801	)		(1,327,842	)
Total lease liabilities	$	9,771		$	121,277