Leases

9 Months Ended

Sep. 30, 2020

LEASES

Effective January 1, 2019, we adopted the new lease accounting guidance in Topic 842. As the lessee and lessor, we have elected the package of practical expedients permitted in Topic 842. See Note 2 (Summary of Significant Accounting Policies) for additional disclosure on Topic 842.

As a Lessor. All leases on our properties are classified as noncancelable operating leases, and the related rental income is recognized on a straight-line basis over the terms of the related leases. Differences between rental income earned and amounts due per the respective lease agreements are capitalized or charged, as applicable, to accrued rents and accounts receivable. Percentage rents are recognized as rental income when the thresholds upon which they are based have been met. Recoveries from tenants for taxes, insurance, and other operating expenses are recognized as revenues in the period the corresponding costs are incurred. We combine lease and nonlease components in lease contracts, which includes combining base rent, recoveries, and percentage rents into a single line item, Rental, within the consolidated statements of operations and comprehensive income (loss).

A summary of minimum future rents to be received (exclusive of renewals, tenant reimbursements, contingent rents, and collectability adjustments under Topic 842) under noncancelable operating leases in existence as of September 30, 2020 is as follows (in thousands):


Years Ended December 31,	Minimum Future Rents(1)
2020 (remaining)	$	21,140
2021	79,101
2022	68,060
2023	56,561
2024	44,593
Thereafter	125,900
Total	$	395,355

(1) These amounts do not reflect future rental revenues from the renewal or replacement of existing leases and exclude reimbursements of operating expenses and rental increases that are not fixed.

As a Lessee. We have office space, automobile, and office machine leases, which qualify as operating leases, with remaining lease terms of one to three years.

The following table summarizes the fixed, future minimum rental payments, excluding variable costs, which are discounted by our weighted average incremental borrowing rates to calculate the lease liabilities for our operating leases in which we are the lessee (in thousands):


Years Ended December 31,	September 30, 2020
2020 (remaining)	$	226
2021	447
2022	85
2023	40
2024	35
2025	23
Total undiscounted rental payments	856
Less imputed interest	37
Total lease liabilities	$	819

For the three months ended September 30, 2020 and 2019, the total lease costs were $253,000 and $245,000, respectively, and for the nine months ended September 30, 2020 and 2019, the total lease costs were $809,000 and $740,000, respectively. The weighted average remaining lease term for our operating leases was 1.9 years at September 30, 2020. We do not include renewal options in the lease term for calculating the lease liability unless we are reasonably certain we will exercise the option or the lessor has the sole ability to exercise the option. The weighted average incremental borrowing rate was 4.5% at September 30, 2020.