Leases
Lessee
We lease land, buildings, office space and certain equipment. Many of our leases include a renewal option to extend the term from one to 25 years or more. Renewal options that we are reasonably certain to exercise are recognized in our right-of-use assets and lease liabilities. As most of our leases do not provide a rate implicit in the lease agreement, we generally use our incremental borrowing rate available at lease commencement, underlying collateral for the lease and the ability to borrow against that collateral on a secured basis to determine the present value of lease payments. The incremental borrowing rates were determined using our longer term borrowing rates (actual pricing through 30 years, as well as other longer term market rates).
The components of lease expense were as follows for the periods presented (in thousands):
| | | | | | | | | | | | | | | | | | | | | | | | | | |
| | | | Year Ended December 31, |
| | | Classification | | 2025 | | 2024 | | 2023 |
Operating lease cost: (1) | | | | | | | | |
| Real estate lease expense | | Property operating expenses | | $ | 104,006 | | | $ | 42,110 | | | $ | 21,970 | |
| Non-real estate investment lease expense | | General and administrative expenses | | 6,255 | | | 5,190 | | | 7,243 | |
| Financing lease cost: | | | | | | | | |
| Amortization of leased assets | | Property operating expenses | | 8,596 | | | 5,852 | | | 5,854 | |
| Interest on lease liabilities | | Interest expense | | 10,583 | | | 4,332 | | | 4,050 | |
| Sublease income | | Rental income | | — | | | — | | | (3,933) | |
| Total | | | | $ | 129,440 | | | $ | 57,484 | | | $ | 35,184 | |
(1) Includes short-term leases, which are immaterial.
Maturities of lease liabilities as of December 31, 2025 are as follows (in thousands):
| | | | | | | | | | | | | | |
| | Operating Leases | | Financing Leases |
| 2026 | | $ | 116,886 | | | $ | 29,740 | |
| 2027 | | 117,630 | | | 29,494 | |
| 2028 | | 117,061 | | | 27,951 | |
| 2029 | | 116,662 | | | 28,424 | |
| 2030 | | 117,309 | | | 28,979 | |
| Thereafter | | 2,516,907 | | | 1,289,541 | |
| Total lease payments | | 3,102,455 | | | 1,434,129 | |
| Less: Imputed interest | | (1,459,606) | | | (893,985) | |
| Total present value of lease liabilities | | $ | 1,642,849 | | | $ | 540,144 | |
Supplemental balance sheet information related to leases in which we are the lessee is as follows for the periods presented (in thousands, except lease terms and discount rate):
| | | | | | | | | | | | | | | | | |
| | Classification | | December 31, 2025 | | December 31, 2024 |
| Right of use assets: | | | | | |
| Operating leases - real estate | Right of use assets, net | | $ | 1,537,490 | | | $ | 1,094,549 | |
| Financing leases - real estate | Right of use assets, net | | 620,555 | | | 106,582 | |
| Real estate right of use assets, net | | | 2,158,045 | | | 1,201,131 | |
| Operating leases - non-real estate investments | Receivables and other assets | | 25,073 | | | 7,605 | |
| | | | | |
| Total right of use assets, net | | | $ | 2,183,118 | | | $ | 1,208,736 | |
| | | | | |
| Lease liabilities: | | | | | |
| Operating leases | | | $ | 1,642,849 | | | $ | 1,150,062 | |
| Financing leases | | | 540,144 | | | 108,037 | |
| Total lease liabilities | | | $ | 2,182,993 | | | $ | 1,258,099 | |
| | | | | |
| Weighted average remaining lease term (years): | | | | | |
| Operating leases | | | 24.3 | | 28.1 |
| Financing leases | | | 40.3 | | 51.2 |
| | | | | |
| Weighted average discount rate: | | | | | |
| Operating leases | | | 4.8 | % | | 5.0 | % |
| Financing leases | | | 5.9 | % | | 6.0 | % |
Supplemental cash flow information related to leases was as follows for the periods indicated (in thousands):
| | | | | | | | | | | | | | | | | | | | | | | |
| | | Year Ended December 31, |
| | Classification | | 2025 | | 2024 | | 2023 |
| Cash paid for amounts included in the measurement of lease liabilities: | | | | | | |
| Operating cash flows from operating leases | Decrease (increase) in receivables and other assets | | $ | 32,238 | | | $ | 13,108 | | | $ | (590) | |
| Operating cash flows from operating leases | Increase (decrease) in accrued expenses and other liabilities | | (26,175) | | | (10,570) | | | (2,037) | |
| Operating cash flows from financing leases | Decrease (increase) in receivables and other assets | | 5,163 | | | 885 | | | 3,061 | |
| Financing cash flows from financing leases | Other financing activities | | 182 | | | 1,211 | | | (2,704) | |
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.