LEASES
The Company determines if a contractual arrangement is a lease at inception. As a lessee, the Company has non-cancelable lease agreements for real estate and its corporate office space that are classified as operating leases. The Company's operating leases are included in operating lease right-of-use ("ROU") assets and operating lease liabilities in its consolidated balance sheets. Operating lease ROU assets and liabilities are recognized at commencement date based on the present value of lease payments over the lease term. As the Company's operating leases do not provide an implicit rate, and such rate is not readily determinable, the Company used its incremental borrowing rate based on the information available at commencement date in determining the discount rate for the present value of the lease payments. To the extent that the lease agreements provide for fixed increases throughout the term of the lease, the Company recognizes lease expense on a straight-line basis over the expected lease terms.
Real Estate Leasehold Interests
The Company has seven properties that are subject to non-cancelable leasehold interest agreements with remaining lease terms ranging from 9 to 49 years, inclusive of extension options that the Company anticipates exercising. Rent expense under these leasehold interest agreements is included in property operating expenses in the accompanying consolidated statements of operations and amounted to $1.6 million, $1.6 million and $1.6 million for the years ended December 31, 2025, 2024 and 2023, respectively.
Office Leases
The Company has entered into a non-cancelable lease agreement for its corporate office space with a remaining lease term of approximately two years. Rent expense related to this office lease is included in general and administrative expenses in the accompanying consolidated statements of operations and amounted to $0.5 million, $0.4 million and $0.4 million for the years ended December 31, 2025, 2024 and 2023, respectively.
Solar Panel Leases
During year ended December 31, 2022, the Company entered into non-cancelable lease agreements for solar panels with remaining lease terms of 17 years. Rent expense related to these solar panel leases is included in general and administrative expenses in the accompanying consolidated statements of operations and amounted to $0.2 million, $0.2 million and $0.2 million for the years ended December 31, 2025, 2024 and 2023, respectively.
The weighted-average remaining lease term and the weighted-average discount rate for the Company's operating leases as of December 31, 2025 are as follows:
| | | | | | | | | | |
| | December 31, 2025 | | |
| Weighted-average remaining lease term | | | | |
| Real estate leasehold interests | | 22 years | | |
| Office lease | | 2 years | | |
| Solar Panels | | 17 years | | |
| Weighted-average remaining discount rate | | | | |
| Real estate leasehold interests | | 4.8 | % | | |
| Office lease | | 5.0 | % | | |
| Solar Panels | | 4.3 | % | | |
As of December 31, 2025, the future minimum lease payments under the Company's operating leases, for which the Company is a lessee, are as follows (dollars in thousands):
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| Year Ending December 31, | | Real Estate Leasehold Interests | | Office Lease | | Solar Panels | | Total |
| 2026 | | $ | 1,520 | | | $ | 553 | | | $ | 165 | | | $ | 2,238 | |
| 2027 | | 1,536 | | | 510 | | | 165 | | | 2,211 | |
| 2028 | | 1,542 | | | — | | | 170 | | | 1,712 | |
| 2029 | | 1,548 | | | — | | | 182 | | | 1,730 | |
| 2030 | | 1,599 | | | — | | | 182 | | | 1,781 | |
| 2031 through 2092 | | 23,466 | | | — | | | 2,645 | | | 26,111 | |
| Total lease payments | | $ | 31,211 | | | $ | 1,063 | | | $ | 3,509 | | | $ | 35,783 | |
| Less imputed interest | | (12,040) | | | (49) | | | (1,074) | | | (13,163) | |
| Total | | $ | 19,171 | | | $ | 1,014 | | | $ | 2,435 | | | $ | 22,620 | |