Leases, Codification Topic 842

6 Months Ended

Jun. 30, 2025

Operating Leases

The Company’s real estate investments are leased under operating leases. In addition to its lessor arrangements on its real estate investments, as of June 30, 2025 and December 31, 2024, the Company was lessee in 51 operating ground leases and lessee in one operating lease for its executive office. The Company's tenants, who are generally subtenants under these ground leases, are responsible for paying the rent under these ground leases. As of June 30, 2025, rental revenue from one of the Company's tenants, who is also a subtenant under certain ground leases, is being recognized on a cash basis. In addition, two of the Company's ground leases do not currently have subtenants. In the event the tenant fails to pay the ground lease rent or if the property does not have a subtenant, the Company is primarily responsible for the payment, assuming the Company does not sell or re-tenant the property.

The following table summarizes rental revenue, including sublease arrangements and lease costs, for the three and six months ended June 30, 2025 and 2024 (in thousands):


		Three Months Ended June 30,				Six Months Ended June 30,
	Classification	2025		2024		2025		2024
Lease revenue
Operating leases	Rental revenue	$	143,768	$	138,606	$	283,547	$	274,400
Sublease income - operating ground leases	Rental revenue	6,583		6,487		13,163		12,974

Lease costs
Operating ground lease cost	Property operating expense	$	6,708	$	6,539	$	13,376	$	13,086
Operating office lease cost	General and administrative expense	224		224		448		448

EPR PROPERTIES 10-Q