Copper Property CTL Pass Through Trust Quarterly report pursuant to Section 13 or 15(d)

Quarterly report pursuant to Section 13 or 15(d)

LEASES (Tables)

LEASES (Tables)

9 Months Ended

Sep. 30, 2024

The disaggregation of the Trust’s lease income as either fixed or variable lease income based on the criteria specified in Financial Accounting Standards Board (“FASB”) Accounting Standard Codification ("ASC") Topic 842 is as follows:


	Three Months Ended September 30,					Nine Months Ended September 30,
	2024			2023		2024			2023
Fixed lease income	$	24,660		$	25,425	$	74,698		$	76,634
Variable lease income (a)	493			—		1,494			—
Straight-line rental income, net (b)	(568)			(585)		(1,719)			(1,763)
Ground lease reimbursement income (c)	1,027			1,019		3,089			3,035
Other
Amortization of above and below market lease intangibles (d)	(617)			(546)		(1,760)			(1,667)
Lease income	$	24,995	(e)	$	25,313	$	75,802	(e)	$	76,239

(a)Variable lease income consists of lease payments based on either an index or a rate.

(b)Represents the impact of straight-line rent (contractual rent exceeds straight-line rent).

(c)Ground lease reimbursement income consists of lease payments due from the tenant for land leased under non-cancellable operating leases.

(d)Represents above and below market lease amortization recognized straight-line over the lease term.

(e)Includes lease income from the two Retail Properties classified as held for sale as of September 30, 2024.

Undiscounted lease payments to be received under operating leases

As of September 30, 2024, undiscounted lease payments to be received under operating leases, excluding the two Retail Properties classified as held for sale and amounts resulting from CPI adjustments, for the next five years and thereafter are as follows:


	Lease Payments
Period from October 1 to December 31, 2024	$	24,106
2025	96,425
2026	96,425
2027	96,425
2028	96,425
Thereafter	1,157,097
Total	$	1,566,903

Components of ground lease rent expense

The components of ground lease rent expense, which are included within “Operating expenses” in the accompanying consolidated statements of operations for the three and nine months ended September 30, 2024 and 2023, were as follows:


	Three Months Ended September 30,				Nine Months Ended September 30,
	2024		2023		2024		2023
Amortization of:
Above market ground lease intangibles	$	(160)	$	(160)	$	(480)	$	(480)
Below market ground lease intangibles	365		365		1,095		1,095
Right-of-use assets	251		252		755		760
Interest expense	1,039		1,038		3,116		3,111
Ground lease rent expense	$	1,495	$	1,495	$	4,486	$	4,486

Undiscounted future rental obligations to be paid under long-term ground and office leases

As of September 30, 2024, undiscounted future rental obligations to be paid under the long-term ground leases by Penney Intermediate Holdings LLC under the terms of the Master Lease on behalf of the Trust, including fixed rental increases, for the next five years and thereafter, are as follows:


	Lease Obligations
Period from October 1 to December 31, 2024	$	1,035
2025	4,116
2026	4,138
2027	4,197
2028	4,257
Thereafter	215,902
Less imputed interest	(195,854)
Lease liabilities as of September 30, 2024	$	37,791