Annual report pursuant to Section 13 and 15(d)

Orion Office REIT, Leases

v3.22.1
Orion Office REIT, Leases
 12 Months Ended
Dec. 31, 2021
Leases [Abstract]  
Leases
Note 11 – Leases
Lessor
As of December 31, 2021, the Company is the lessor for its 92 office properties. The Company’s operating leases have non-cancelable lease terms ranging from 0.08 years to 16.26 years as of December 31, 2021 and 0.30 years to 13.12 years as of December 31, 2020, respectively. Certain leases with tenants include options to extend or terminate the lease agreements or to purchase the underlying assets. Lease agreements may also contain rent increases that are based on an index or rate (e.g., the consumer price index or LIBOR).
The following table presents future minimum operating lease payments due to the Company over the next five years and thereafter as of December 31, 2021 (in thousands).
Future Minimum
Operating Lease Payments
2022 $ 153,592 
2023 128,580 
2024 96,850 
2025 64,544 
2026 61,916 
Thereafter 239,317 
Total $ 744,799 
Lessee
The Company is the lessee under operating lease arrangements and corporate office leases, which meet the criteria under U.S. GAAP for an operating lease. As of December 31, 2021, the Company’s operating leases had remaining lease terms ranging from 0.9 years to 63 years, which includes options to extend. Under the ground lease arrangements, the Company pays variable costs, including property operating expenses and common area maintenance. The weighted-average discount rate used to measure the lease liability for the Company’s operating leases was 3.14% as of December 31, 2021. As the Company’s leases do not provide an implicit rate, the Company used an estimated incremental borrowing rate based on the information available at the lease guidance adoption date or the Merger Effective Time, as applicable, in determining the present value of lease payments.
Operating lease costs for the year ended December 31, 2021 were $0.3 million. Operating lease costs for each of the years ended December 31, 2020 and 2019 were $0.1 million. No cash paid for operating lease liabilities was capitalized.
The following table reflects the maturity analysis of payments due from the Company over the next five years and thereafter for ground and corporate office lease obligations as of December 31, 2021 (in thousands).
Future Minimum Lease Payments
2022 1,008 
2023 778 
2024 452 
2025 442 
2026 442 
Thereafter 13,383 
Total 16,505 
Less: imputed interest 6,248 
Total $ 10,257 
The following table reflects the maturity analysis of payments due from the Company over the next five years and thereafter for ground lease obligations as of December 31, 2020 (in thousands).
Future Minimum Lease Payments
2021 107 
2022 111 
2023 113 
2024 113 
2025 113 
Thereafter 3,432 
Total 3,989 
Less: imputed interest 1,887 
Total $ 2,102 
Leases
Note 11 – Leases
Lessor
As of December 31, 2021, the Company is the lessor for its 92 office properties. The Company’s operating leases have non-cancelable lease terms ranging from 0.08 years to 16.26 years as of December 31, 2021 and 0.30 years to 13.12 years as of December 31, 2020, respectively. Certain leases with tenants include options to extend or terminate the lease agreements or to purchase the underlying assets. Lease agreements may also contain rent increases that are based on an index or rate (e.g., the consumer price index or LIBOR).
The following table presents future minimum operating lease payments due to the Company over the next five years and thereafter as of December 31, 2021 (in thousands).
Future Minimum
Operating Lease Payments
2022 $ 153,592 
2023 128,580 
2024 96,850 
2025 64,544 
2026 61,916 
Thereafter 239,317 
Total $ 744,799 
Lessee
The Company is the lessee under operating lease arrangements and corporate office leases, which meet the criteria under U.S. GAAP for an operating lease. As of December 31, 2021, the Company’s operating leases had remaining lease terms ranging from 0.9 years to 63 years, which includes options to extend. Under the ground lease arrangements, the Company pays variable costs, including property operating expenses and common area maintenance. The weighted-average discount rate used to measure the lease liability for the Company’s operating leases was 3.14% as of December 31, 2021. As the Company’s leases do not provide an implicit rate, the Company used an estimated incremental borrowing rate based on the information available at the lease guidance adoption date or the Merger Effective Time, as applicable, in determining the present value of lease payments.
Operating lease costs for the year ended December 31, 2021 were $0.3 million. Operating lease costs for each of the years ended December 31, 2020 and 2019 were $0.1 million. No cash paid for operating lease liabilities was capitalized.
The following table reflects the maturity analysis of payments due from the Company over the next five years and thereafter for ground and corporate office lease obligations as of December 31, 2021 (in thousands).
Future Minimum Lease Payments
2022 1,008 
2023 778 
2024 452 
2025 442 
2026 442 
Thereafter 13,383 
Total 16,505 
Less: imputed interest 6,248 
Total $ 10,257 
The following table reflects the maturity analysis of payments due from the Company over the next five years and thereafter for ground lease obligations as of December 31, 2020 (in thousands).
Future Minimum Lease Payments
2021 107 
2022 111 
2023 113 
2024 113 
2025 113 
Thereafter 3,432 
Total 3,989 
Less: imputed interest 1,887 
Total $ 2,102