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OPERATING LEASES

12 Months Ended

Jul. 31, 2021

5. OPERATING LEASES:

Lessor

The Company leases office and retail space to tenants under operating leases in commercial buildings. The rental terms range from approximately 5 to 49 years. The leases provide for the payment of fixed base rent payable monthly in advance as well as reimbursements of real estate taxes and common area costs. The Company has elected to account for lease revenues and the reimbursements of common area costs as a single component included as rental income in our consolidated statements of operations.

The following table disaggregates the Company’s revenues by lease and non-lease components:

	Years Ended July 31,
	2021		2020
Base rent - fixed	$	18,355,925	$	17,392,398
Reimbursements of common area costs		751,618		781,119
Non-lease components (real estate taxes)		1,105,336		1,358,329
Rental income	$	20,212,879	$	19,531,846

Rental income for each of the fiscal years 2021 and 2020 is as follows:

	Years Ended July 31,
	2021		2020
Minimum rentals
Company owned property	$	11,798,456	$	10,940,491
Leased property		6,557,469		6,451,907
		18,355,925		17,392,398
Contingent rentals
Company owned property		1,237,614		1,454,827
Leased property		619,340		684,621
		1,856,954		2,139,448
Total	$	20,212,879	$	19,531,846

Future minimum non-cancelable rental income for leases with initial or remaining terms of one year or more is as follows:

	Company
	Owned		Leased
Year Ended July 31,	Property		Property		Total
2022	$	11,118,307	$	4,934,146	$	16,052,453
2023		9,790,555		3,252,460		13,043,015
2024		7,779,932		2,968,843		10,748,775
2025		7,411,636		2,583,441		9,995,077
2026		6,562,590		2,448,958		9,011,548
After 2026		33,453,204		7,336,769		40,789,973
Total	$	76,116,224	$	23,524,617	$	99,640,841

Lessee

The Company’s real estate operations include leased properties under long-term, non-cancelable operating lease agreements. The leases expire at various dates through 2073, including options to extend or terminate the lease when it is reasonably certain the Company will exercise that option. Certain leases provide for increases in future minimum annual rental payments as defined in the lease agreements.

Effective April 1, 2020, four of the Company’s property leases were extended. The effect of these lease extensions on the measurement of operating lease right-of-use assets, liabilities and rent expense follows:

	Operating		Operating		Monthly
	Lease Right-		Lease		Rent
	of-Use-Asset		Liability		Expense
Upon initial adoption, August 1, 2019	$	27,104,937	$	17,863,507	$	249,955
After various lease extensions through April 30, 2020	$	37,698,819	$	29,326,365	$	277,570

Operating lease costs for leased real property was exceeded by sublease rental income from the Company’s real estate operations as follows:

	Years Ended July 31,
	2021			2020
Sublease income	$	7,176,809		$	7,136,528
Operating lease cost		(4,767,660	)		(4,517,273	)
Excess of sublease income over lease cost	$	2,409,149		$	2,619,255

As of July 31, 2021, our operating leases had a weighted average remaining lease term of 17.37 years and a weighted average discount rate of 2.87%.

	Years Ended July 31,
	2021		2020
Other information:
Operating cash flows from operating leases	$	2,024,246	$	1,931,545

The following is a maturity analysis of the annual undiscounted cash flows of the operating lease liabilities as of July 31, 2021:

	Operating
Year ended July 31	Leases
2022	$	2,116,363
2023		2,132,944
2024		2,150,128
2025		2,167,284
2026		2,223,672
Thereafter		25,327,631
Total undiscounted cash flows		36,118,022
Less: present value discount		(8,277,092	)
Total Lease Liabilities	$	27,840,930