LEASES (Tables)

6 Months Ended

Jun. 30, 2024

Lessee - Future minimum lease payments and total operating lease liabilities

Future minimum lease payments and total operating lease liabilities from our ground leases as of June 30, 2024 are as follows (dollars in thousands):


		Ground Leases
2024		$	6,222
2025			12,442
2026			12,442
2027			12,442
2028			12,442
Thereafter			405,452
Total future minimum lease payments (undiscounted)			461,442
Difference between future undiscounted cash flows and discounted cash flows			(277,366)
Total operating lease liabilities (discounted)		$	184,076

Lessee - components of operating lease expenses

The components of operating lease expenses were as follows (dollars in thousands):


		Three Months Ended June 30,						Six Months Ended June 30,
		2024			2023			2024			2023
Lease expense:
Contractual lease expense		$	3,350		$	3,292		$	6,700		$	6,584
Variable lease expense (a)			43			33			83			61
Total operating lease expense (b)(c)		$	3,393		$	3,325		$	6,783		$	6,645

(a)

Variable lease expense includes adjustments such as changes in the consumer price index and payments based on a percentage of a community’s revenue.

(b)

Lease expense is reported within the line item Other operating expenses on the Consolidated Statements of Operations.

(c)

For the six months ended June 30, 2024, Operating lease right-of-use assets and Operating lease liabilities amortized by $1.8 million and $1.8 million, respectively. For the six months ended June 30, 2023, Operating lease right-of-use assets and Operating lease liabilities amortized by $1.7 million and $1.6 million, respectively. Due to the net impact of the amortization, the Company recorded less than $0.1 million and less than $0.1 million of total operating lease expense during the three months ended June 30, 2024 and 2023, respectively, and less than $0.1 million and less than $0.1 million of total operating lease expense during the six months ended June 30, 2024 and 2023, respectively.

Lessor - Future minimum lease payments

Future minimum lease payments from our retail and commercial leases as of June 30, 2024 are as follows (dollars in thousands):


		Retail and Commercial Leases
2024		$	13,282
2025			25,327
2026			22,517
2027			18,851
2028			16,064
Thereafter			60,516
Total future minimum lease payments (a)		$	156,557

(a)We have excluded our apartment home leases from this table as our apartment home leases generally have initial terms of 12 months or less.