Note 8  Commitments and Contingencies Lessee Arrangement - Ground Lease The Company entered into a ground lease agreement in 2016 related to the acquisition of 1140 Avenue of the Americas under a leasehold interest arrangement. On January 1, 2019, the Company adopted ASU 2016- 02 and recorded an ROU asset and lease liability related to this lease, which is considered an operating lease under the new standard (see Note 2  Summary of Significant Accounting Polices for additional information on the impact of adopting the new standard). As of June 30, 2019 , the Companys balance sheet includes an ROU asset and liability of $55.7 million and $54.9 million , respectively, which are included in operating lease right-of-use asset and operating lease liability, respectively, on the consolidated balance sheet. In determining operating ROU asset and lease liability for the Companys existing operating lease upon the adoption of the new lease guidance, the Company was required to estimate an appropriate incremental borrowing rate, which it estimated to be 8.57% on a fully-collateralized basis for the term of the lease. Since the term of the Companys ground lease is significantly longer than the terms of borrowings available to the Company on a fully-collateralized basis, the Companys estimate of this rate required significant judgment. The Companys ground operating lease has a weighted-average remaining lease term of 47.5 years as of June 30, 2019 . For the three and six months ended June 30, 2019 , the Company paid cash of $1.2 million and $2.4 million for amounts included in the measurement of lease liabilities and recorded expense of $1.2 million and $2.4 million , respectively, on a straight-line basis in accordance with the standard. The Company incurred ground rent expense of $1.2 million and $2.4 million during the three and six months ended June 30, 2018 , respectively. The lease expense is recorded in property operating expenses in the consolidated statements of operations and comprehensive loss. The Company did not enter into any additional ground leases as lessee during the six months ended June 30, 2019 . The following table reflects the ground lease rent payments due from the Company and a reconciliation to the net present value of those payments as of June 30, 2019 : (In thousands) Future Base Rent Payments 2019 (remainder) $ 2,373 2020 4,746 2021 4,746 2022 4,746 2023 4,746 Thereafter 211,992 Total $ 233,349 Less: Effects of discounting (178,461 ) Total present value of lease payments $ 54,888 The following table reflects the ground lease rent payments due from the Company as of December 31, 2018: (In thousands) Future Base Rent Payments 2019 $ 4,746 2020 4,746 2021 4,746 2022 4,746 2023 4,746 Thereafter 211,992 Total $ 235,722 Litigation and Regulatory Matters In the ordinary course of business, the Company may become subject to litigation, claims and regulatory matters. There are no material legal or regulatory proceedings pending or known to be contemplated against the Company. Environmental Matters In connection with the ownership and operation of real estate, the Company may potentially be liable for costs and damages related to environmental matters. As of June 30, 2019 , the Company has not been notified by any governmental authority of any non-compliance, liability or other claim, and is not aware of any other environmental condition that it believes will have a material adverse effect on the results of operations.