American Healthcare REIT, Inc. Leases Disclosure
15. Leases
Lessor
We have operating leases with tenants that expire at various dates through 2050. For the years ended December 31, 2025, 2024 and 2023, we recognized $162,611,000, $180,783,000 and $185,064,000, respectively, of revenues related to operating lease payments, of which $36,675,000, $36,729,000 and $38,415,000, respectively, was for variable lease payments.
As of December 31, 2025, the following table sets forth the undiscounted cash flows for future minimum base rents due under operating leases for each of the next five years ending December 31 and thereafter for properties that we wholly own (in thousands):
Year |
|
Amount |
|
|
2026 |
|
$ |
116,743 |
|
2027 |
|
|
111,821 |
|
2028 |
|
|
101,591 |
|
2029 |
|
|
90,105 |
|
2030 |
|
|
78,309 |
|
Thereafter |
|
|
430,141 |
|
Total |
|
$ |
928,710 |
|
Lessee
We lease certain land, buildings, campuses, office equipment and automobiles. We have lease agreements with lease and non-lease components, which are generally accounted for separately. Most leases include one or more options to renew, with renewal terms that generally can extend at various dates through 2107, excluding extension options. The exercise of lease renewal options is at our sole discretion. Certain leases also include options to purchase the leased property.
The depreciable life of assets and leasehold improvements are limited by the expected lease term, unless there is a transfer of title or purchase option reasonably certain of exercise. Certain of our lease agreements include rental payments that are adjusted periodically based on the United States Bureau of Labor Statistics’ Consumer Price Index and may also include other variable lease costs (i.e., common area maintenance, property taxes and insurance). Our lease agreements do not contain any material residual value guarantees or material restrictive covenants.
The components of lease costs were as follows (in thousands):
|
|
|
|
Year Ended December 31, |
|
|||||||||
Lease Cost |
|
Classification |
|
2025 |
|
|
2024 |
|
|
2023 |
|
|||
Operating lease cost(1) |
|
Property operating expenses, rental |
|
$ |
34,395 |
|
|
$ |
38,346 |
|
|
$ |
44,141 |
|
Finance lease cost: |
|
|
|
|
|
|
|
|
|
|
|
|||
Amortization of leased assets |
|
Depreciation and amortization |
|
|
59 |
|
|
|
2,146 |
|
|
|
1,360 |
|
Interest on lease liabilities |
|
Interest expense |
|
|
12 |
|
|
|
566 |
|
|
|
353 |
|
Sublease income |
|
Resident fees and services revenue or other |
|
|
(341 |
) |
|
|
(580 |
) |
|
|
(572 |
) |
Total lease cost |
|
|
|
$ |
34,125 |
|
|
$ |
40,478 |
|
|
$ |
45,282 |
|
Additional information related to our leases for the periods presented below was as follows (dollars in thousands):
|
|
December 31, |
|
|||||||||
Lease Term and Discount Rate |
|
2025 |
|
|
2024 |
|
|
2023 |
|
|||
Weighted average remaining lease term (in years): |
|
|
|
|
|
|
|
|
|
|||
Operating leases |
|
|
11.4 |
|
|
|
11.0 |
|
|
|
12.2 |
|
Finance leases |
|
|
3.6 |
|
|
|
3.8 |
|
|
|
1.5 |
|
Weighted average discount rate: |
|
|
|
|
|
|
|
|
|
|||
Operating leases |
|
|
5.85 |
% |
|
|
5.85 |
% |
|
|
5.76 |
% |
Finance leases |
|
|
11.25 |
% |
|
|
10.60 |
% |
|
|
7.78 |
% |
|
|
Year Ended December 31, |
|
|||||||||
Supplemental Disclosure of Cash Flows Information |
|
2025 |
|
|
2024 |
|
|
2023 |
|
|||
Operating cash outflows related to finance leases |
|
$ |
12 |
|
|
$ |
566 |
|
|
$ |
353 |
|
Financing cash outflows related to finance leases |
|
$ |
56 |
|
|
$ |
81 |
|
|
$ |
62 |
|
Right-of-use assets obtained in exchange for operating lease liabilities |
|
$ |
3,727 |
|
|
$ |
4,322 |
|
|
$ |
6,153 |
|
Operating Leases
As of December 31, 2025, the following table sets forth the undiscounted cash flows of our scheduled obligations for future minimum payments for each of the next five years ending December 31 and thereafter, as well as the reconciliation of those cash flows to operating lease liabilities on our accompanying consolidated balance sheet (in thousands):
Year |
|
Amount |
|
|
2026 |
|
$ |
28,106 |
|
2027 |
|
|
29,058 |
|
2028 |
|
|
29,467 |
|
2029 |
|
|
28,563 |
|
2030 |
|
|
26,673 |
|
Thereafter |
|
|
68,862 |
|
Total undiscounted operating lease payments |
|
|
210,729 |
|
Less: interest |
|
|
(75,126 |
) |
Present value of operating lease liabilities |
|
$ |
135,603 |
|
Finance Leases and Financing Obligations
As of December 31, 2025, the following table sets forth the undiscounted cash flows of our scheduled obligations for future minimum payments for each of the next five years ending December 31 and thereafter, as well as a reconciliation of those cash flows to finance lease liabilities and financing obligations (in thousands):
Year |
|
Amount |
|
|
2026 |
|
$ |
4,167 |
|
2027 |
|
|
3,905 |
|
2028 |
|
|
3,556 |
|
2029 |
|
|
32,334 |
|
2030 |
|
|
92 |
|
Thereafter |
|
|
— |
|
Total undiscounted payments |
|
|
44,054 |
|
Less: interest |
|
|
(10,152 |
) |
and financing obligations |
|
$ |
33,902 |
|
Historical Timeline
| Fiscal Year | Filed | |
|---|---|---|
| 2025 | Feb 27, 2026 | Showing above |
| 2024 | Feb 28, 2025 | |
| 2023 | Mar 22, 2024 | |
| 2022 | Mar 17, 2023 | |
| 2021 | Mar 25, 2022 | |
| 2020 | Mar 26, 2021 | |
| 2019 | Mar 19, 2020 | |
About Leases Disclosures
Lease disclosures under ASC 842 provide a comprehensive view of a company's leased asset portfolio, including the split between operating and finance leases, discount rates used to present-value future payments, and the maturity schedule of lease obligations. This section reveals a significant source of off-balance-sheet commitments that were largely hidden before the current standard.
Key signals: the weighted-average discount rate affects the size of recorded lease liabilities — a higher rate reduces the reported obligation, so compare the chosen rate against the company's incremental borrowing rate. The operating versus finance lease mix affects both EBITDA and operating income presentation. Watch the maturity table for concentration risk: large payment cliffs in specific years may create cash flow pressure. Variable lease payments excluded from the liability measurement represent real obligations that do not appear on the balance sheet. Compare total lease costs against prior-year operating lease expense to assess the true economic burden.