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Leases | 9 Months Ended
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Sep. 30, 2024
Leases |
Leases | (8) Leases The Company enters into operating leases primarily for standalone homes, luxury condos and hotel rooms and suites. As of September 30, 2024, active leases have remaining terms ranging from less than 1 year to 19 years, and generally contain extension options at the approval of both parties. The Company has not generally included these renewal periods in the lease term as it is not reasonably certain that the renewal option will be exercised. Lease expense for operating lease payments is recognized on a straight-line basis over the lease term. Variable lease expense includes expenses incurred as a result of the lease agreement, which are not considered known expenses at lease inception and are recognized as incurred. Variable expenses can include, but are not limited to, revenue shares, owner buyback adjustments and usage-based agreements. Operating lease expense and variable lease expense are included in cost of revenue within the Condensed Consolidated Statements of Operations and Comprehensive Income (Loss). The following table details the composition of operating lease expense (in thousands):
​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​
​ | ​ | Three Months Ended September 30, | ​ | ​ | Nine Months Ended September 30,
​ | ​ | 2024 | ​ | 2023 | ​ |  | 2024 | ​ | 2023
Operating lease expense | ​ | $ | 18,076 | ​ | $ | 20,232 | ​ | ​ | $ | 56,634 | ​ | $ | 65,390
Variable lease expense | ​ | $ | 225 | ​ | $ | 187 | ​ | ​ | $ | 726 | ​ | $ | 689
​ The maturities of the Company’s operating lease liabilities as of September 30, 2024 are as follows (in thousands): ​
​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​
Fiscal Year Ending | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | Operating leases
Remainder of 2024 | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | $ | 18,574
2025 | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | 65,499
2026 | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | 45,570
2027 | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | 32,555
2028 | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | 23,767
2029 and thereafter | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | 54,906
Total minimum lease payments | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | 240,871
Less: interest expense | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | (48,232)
Present value of lease obligations | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | 192,639
Less: current lease obligations | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | (55,276)
Long-term lease obligations | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | $ | 137,363
​ As of September 30, 2024, the Company was party to 10 leases that had not yet commenced. Future payments under these leases were $14.1 million as of September 30, 2024. The following table presents additional information about the Company’s operating lease obligations: ​
​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​
​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | September 30, |  | December 31,
​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | 2024 |  | 2023
Weighted-average remaining lease term (in years) | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | 5.1 | ​ | 5.6
Weighted-average discount rate | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | 9.10% | ​ | 8.23%
​ Impairment of Right-of-Use Assets The Company tests long-lived assets for recoverability whenever events or changes in circumstances suggest that the carrying value of an asset or group of assets may not be recoverable. During the three and nine months ended September 30, 2024, the Company reviewed cash flow forecasts of leases against the carrying value of their right-of-use assets. The Company determined that none of the right-of-use assets for leases had net carrying values that exceeded their estimated undiscounted future cash flows and therefore no impairment was recorded for the three and nine months ended September 30, 2024. During the three and nine months ended September 30, 2023, the Company reviewed cash flow forecasts of leases against the carrying value of their right-of-use assets. The Company determined that the right-of-use assets for thirty-eight leases had net carrying values that exceeded their estimated undiscounted future cash flows. These leases were primarily related to one group of underperforming properties in a single geographic location. The Company then estimated the fair value of the asset groups based on their cash flows discounted at a rate commensurate with the risk involved and based on assumptions representative of market participants. The carrying values of the asset groups exceeded their fair values and, as a result, the Company recorded right-of-use asset impairments of $4.3 million and no impairment of property and equipment for the three months ended September 30, 2023 and right-of-use asset impairments of $34.0 million and property and equipment impairment of $0.3 million for the nine months ended September 30, 2023. These impairments are recorded in asset impairments and (gain) on lease termination within the Company’s Condensed Consolidated Statements of Operations and Comprehensive Income (Loss). Gain on Lease Termination The Company entered into a Lease Termination and Surrender Agreement on August 12, 2024, subsequently amended on August 30, 2024, effective August 31, 2024, (the “Termination Agreement”) of certain previously impaired, underperforming leases under which the Company did not previously have termination rights. The Termination Agreement resulted in a decrease to the Company’s right-of-use assets of $4.6 million and corresponding decrease to operating lease liabilities of approximately $41.7 million, resulting in a gain on lease termination of $37.1 million, which was recorded to asset impairments and (gain) on lease termination within the Condensed Consolidated Statements of Operations and Comprehensive Income (Loss). Additionally, as part of the Termination Agreement, the Company agreed to pay a termination fee of $6.6 million, subject to certain adjustments, payable in installments from August 2024 to March 2025. The $6.6 million termination fee was recognized against asset impairments and (gain) on lease termination within the Condensed Consolidated Statements of Operations and Comprehensive Income (Loss) for the three and nine months ended September 30, 2024 and the remaining unpaid termination fee of $5.7 million as of September 30, 2024 is recorded within accounts payable and accrued liabilities within the Company’s Condensed Consolidated Balance Sheet. Last, as part of the Termination Agreement, the Purchaser agreed to act as guarantor of the $6.6 million termination fee and as compensation for that guarantee the Company agreed to pay the Purchaser $0.6 million ratably over six months beginning January 2025, which was recorded to asset impairments and (gain) on lease termination within the Condensed Consolidated Statements of Operations and Comprehensive Income (Loss) for the three and nine months ended September 30, 2024 and the balance due as of September 30, 2024 is recorded within accounts payable and accrued liabilities within the Condensed Consolidated Balance Sheet.

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