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Leases | 12 Months Ended
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Dec. 31, 2025
Leases |
Leases | Note 8 – Leases The Company operates as both a lessor and a lessee. As a lessor, the Company is required under ASC Topic 842 to account for leases using an approach that is substantially similar to ASC Topic 840’s guidance for operating leases and other leases such as sales-type leases and direct financing leases. In addition, ASC Topic 842 requires lessors to capitalize and amortize only incremental direct leasing costs. As a lessee, the Company is required under the new standard to apply a dual approach, classifying leases, such as ground leases, as either finance or operating leases based on the principle of whether or not the lease is effectively a financed purchase. This classification determines whether lease expense is recognized based on an effective interest method or on a straight-line basis over the term of the lease. ASC Topic 842 also requires lessees to record a right of use asset and a lease liability for all leases with an initial term of greater than a year regardless of their classification. The Company has also elected the practical expedient not to recognize right of use assets and lease liabilities for leases with a term of a year or less. Information as Lessor To generate positive cash flow, as a lessor, the Company leases its facilities to tenants in exchange for fixed monthly payments that cover rent, property taxes, insurance and certain cost recoveries, primarily common area maintenance (“CAM”). The Company’s leases were determined to be operating leases and have a portfolio-average-lease-years remaining of approximately 10 years. Payments from the Company’s tenants for CAM are considered nonlease components that are separated from lease components and are generally accounted for in accordance with the revenue recognition standard. However, the Company qualified for and elected the practical expedient related to combining the components because the lease component is classified as an operating lease and the timing and pattern of transfer of CAM income, which is not the predominant component, is the same as the lease component, for all asset classes. As such, consideration for CAM is accounted for as part of the overall consideration in the lease. Payments from customers for property taxes and insurance are considered non-components of the lease and therefore no consideration is allocated to them because they do not transfer a good or service to the customer. Fixed contractual payments from the Company’s leases are recognized on a straight-line basis over the terms of the respective leases. This means that, with respect to a particular lease, actual amounts billed in accordance with the lease during any given period may be higher or lower than the amount of rental revenue recognized for the period. Straight-line rental revenue is commenced when the tenant assumes control of the leased premises. Accrued straight-line rents receivable represents the amount by which straight-line rental revenue exceeds rents currently billed in accordance with lease agreements. Some of the Company’s leases are subject to annual changes in the Consumer Price Index (“CPI”). Although increases in CPI are not estimated as part of the Company’s measurement of straight-line rental revenue, for leases with base rent increases based on CPI, the amount of rent revenue recognized is adjusted in the period the changes in CPI are measured and effective. Additionally, some of the Company’s leases have extension options. Initial direct costs, primarily commissions related to the leasing of our facilities, are capitalized when material as incurred. Capitalized leasing costs are amortized on a straight-line basis over the remaining useful life of the respective leases. All other costs to negotiate or arrange a lease are expensed as incurred. Lease-related receivables, which include accounts receivable and accrued straight-line rents receivable, are reduced for credit losses, if applicable. The Company regularly evaluates the collectability of its lease-related receivables. The Company’s evaluation of collectability primarily consists of reviewing past due account balances and considering such factors as the credit quality of our tenant, historical trends of the tenant and changes in tenant payment terms. If the Company’s assumptions regarding the collectability of lease-related receivables prove incorrect, the Company could experience credit losses in excess of what was recognized in rental and other revenues. The Company recognized $147,682 and $138,410 of rental revenue related to operating lease payments for the years ended December 31, 2025 and 2024, respectively. Of these amounts $7,354 and $7,737, respectively, relate to variable rental revenue. ​ The aggregate annual cash to be received by the Company on the noncancelable operating leases related to its portfolio as of December 31, 2025 is as follows for the subsequent years ended December 31: ​
​ | ​ | ​ | ​
2026 | ​ ​ ​ | $ | 122,266
2027 | ​ |  | 111,053
2028 | ​ |  | 100,426
2029 | ​ |  | 87,011
2030 | ​ | ​ | 66,166
Thereafter | ​ |  | 228,275
Total | ​ | $ | 715,197
​ Information as Lessee The Company recorded a right of use asset and liability during the year ended December 31, 2025 for the five acquisitions completed during that period that have buildings located on land that is subject to ground leases. The Company used a discount rate of approximately 5.9% to record the right of use asset and liability for these ground leases, which approximated its incremental borrowing rate at the date of acquisition. During the year ended December 31, 2025, the Company incurred interest expense of $202 from ground leases that were classified as financing leases. Including these buildings, the Company has 12 buildings located on land that is subject to ground leases with a weighted average remaining term of approximately 44 years. Rental payments on these leases are adjusted periodically based on either the CPI or on a pre-determined schedule. The monthly payments on a pre-determined schedule are recognized on a straight-line basis over the terms of the respective leases. Changes in the CPI are not estimated as part of our measurement of straight-line rental expense. Some of the Company’s ground leases contain extension options and, where we determined it was reasonably certain that an extension would occur, they were included in our calculation of the right of use asset and liability. The Company recognized approximately $356 and $197 of ground lease expense during the years ended December 31, 2025 and 2024, respectively, of which $272 and $147 was paid in cash. The following table sets forth the undiscounted cash flows of our scheduled obligations for future lease payments on operating ground leases at December 31, 2025 and a reconciliation of those cash flows to the operating lease liability at December 31, 2025: ​
​ | ​ | ​ | ​
2026 | ​ ​ ​ | $ | 1,134
2027 | ​ |  | 1,150
2028 | ​ |  | 1,174
2029 | ​ |  | 1,193
2030 | ​ | ​ | 1,211
Thereafter | ​ |  | 25,988
Total | ​ | ​ | 31,850
Discount | ​ |  | (18,412)
Lease liability | ​ | $ | 13,438
​ Tenant Concentration ​ During the year ended December 31, 2025, the Company’s rental revenues were derived from 312 tenants leasing 189 buildings. During this period there were no tenants with rental revenue that exceeded 10% of the Company’s rental revenue.

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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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