Starwood Real Estate Income Trust, Inc. Notes to Consolidated Financial Statements
The following table presents the future lease payments due under the Company’s ground leases as of December 31, 2024 ($ in thousands): Year Operating Leases 2025 $ 714 2026 714 2027 714 2028 714 2029 714 Thereafter 24,351 Total undiscounted future lease payments 27,921 Difference between undiscounted cash flows and discounted cash flows (15,593) Total lease liability $ 12,328 The Company utilized its incremental borrowing rate, which was between 4.5% and 6%, to determine its lease liabilities. As of December 31, 2024, the weighted average remaining lease term of the Company’s operating leases was 35 years. Payments under the Company’s ground leases contain fixed payment components. The Company’s ground leases contained escalations prior to the Company’s hold period. Lessor The Company’s rental revenue primarily consists of rent earned from operating leases at the Company’s multifamily, single- family rental, industrial, office, self-storage and other properties. Leases at the Company’s industrial, office and other properties generally include a fixed base rent and certain leases also contain a variable component. The variable component of the Company’s operating leases at its industrial, office and other properties primarily consist of the reimbursement of operating expenses such as real estate taxes, insurance, and common area maintenance costs. Leases at the Company’s industrial, office and other properties are generally longer term and may contain extension and termination options at the lessee’s election. The Company’s rental revenue earned from leases at the Company’s multifamily, single-family rental and self-storage properties primarily consists of a fixed base rent and certain leases contain a variable component that allows for the pass-through of certain operating expenses such as utilities. Leases at the Company’s multifamily, single-family rental and self-storage properties are short term in nature, generally not greater than 12 months in length. The following table summarizes the fixed and variable components of the Company’s operating leases ($ in thousands): For the Year Ended December 31, 2024 2023 2022 Fixed lease payments $ 1,498,556 $ 1,540,130 $ 1,376,577 Variable lease payments 150,735 155,787 144,078 Rental revenue $ 1,649,291 $ 1,695,917 $ 1,520,655 The following table presents the undiscounted future minimum rents the Company expects to receive for its industrial, office, and other properties as of December 31, 2024 ($ in thousands). Leases at the Company’s multifamily, single-family and self-storage properties are short term, generally 12 months or less, and are therefore not included. Year Future Minimum Rents 2025 $ 268,710 2026 243,312 2027 214,445 2028 176,798 2029 151,733 Thereafter 357,324 Total $ 1,412,322
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