Commitments and Contingencies
|12 Months Ended|
Dec. 31, 2022
|Commitments and Contingencies Disclosure [Abstract]|
|Commitments and Contingencies||COMMITMENTS AND CONTINGENCIES
In connection with the execution of certain lease agreements, we have committed to provide capital improvements on certain of our farms. Below is a summary of certain of those projects for which we have incurred or accrued costs as of December 31, 2022 (dollars in thousands):
(1)Our obligation to provide capital to fund these improvements does not extend beyond these respective dates.
(2)Pursuant to contractual agreements, we will earn additional rent on the cost of these capital improvements as the funds are disbursed by us.
Ground Lease Obligations
In connection with certain farms acquired through a leasehold interest, we assumed certain ground lease arrangements under which we are the lessee. These operating ground leases have lease expiration dates ranging from February 2025 through December 2041, and none of these leases contain any extension, renewal, or termination options. At lease commencement, the net present value of the minimum lease payments was determined by discounting the respective future minimum lease payments using a discount rate equivalent to our fully-collateralized borrowing rate ranging from 4.22% to 8.72%.
As of December 31, 2022 and 2021, we recorded the following as a result of these operating ground leases (dollars in thousands, except for footnotes):
(1)Operating lease right-of-use assets are shown net of prepaid lease payments of approximately $6,000 and $7,000 for the years ended December 31, 2022 and 2021, respectively, and are included within , net on the accompanying Consolidated Balance Sheets.
(2)Included within , net on the accompanying Consolidated Balance Sheets.
Future minimum lease payments due under the remaining non-cancelable terms of these leases as of December 31, 2022, are as follows (dollars in thousands):
(1)Certain annual lease payments are set at the beginning of each year to then-current market rates (as determined by the lessor). The amounts shown above represent estimated amounts based on the lease rates currently in place.
As a result of these ground leases, we recorded lease expense (included within Property operating expenses on the accompanying Consolidated Statement of Operations and Comprehensive Income) of approximately $92,000, $81,000, and $59,000 during the years ended December 31, 2022, 2021, and 2020, respectively.
In the ordinary course of business, we may be involved in legal proceedings from time to time. We are not currently subject to any material known or threatened litigation.
No definition available.
The entire disclosure for commitments and contingencies.
Reference 1: http://fasb.org/us-gaap/role/ref/legacyRef