Item 2. Properties
ITEM 2. PROPERTIES
As of July 26, 2025, Village owns the sites of nine of its supermarkets (containing 576,000 square feet of total space). The remaining 28 stores (containing 1,534,000 square feet of total space), the central commissary and the corporate headquarters are leased, with initial lease terms generally ranging from 20 to 30 years, usually with renewal options. The stores are freestanding or are located in shopping centers or city storefronts. Most of the Company’s leases contain renewal options at increased rents of five years each at the Company’s sole discretion. These options enable Village to retain the use of facilities in desirable operating areas. Each renewal option is evaluated when recognizing the lease right-of-use assets and liabilities, and the Company utilizes the lease term for which it is reasonably certain to use the underlying asset. Leases with an initial term of 12 months or less are not recorded on the balance sheet. The Company is obligated under all leases to pay for real estate taxes, utilities and liability insurance, and under certain leases to pay additional amounts based on maintenance and a percentage of sales in excess of stipulated amounts. The Company accounts for rent holidays, escalating rent provisions, and construction allowances on a straight-line basis over the term of the lease. The Company owns all trade fixtures and equipment in its stores
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and several other properties including retail shopping centers and parcels of vacant land, which are available as locations for possible future stores or other development.
As of July 26, 2025, finance lease right-of-use assets of $9,017 are included in property, equipment and fixtures, net in the Company's consolidated balance sheet.
The annual rental payment, including finance leases, for all of the Company's leased facilities for the year ended July 26, 2025 was approximately $38,160. For additional information on lease obligations, see Note 7 to the consolidated financial statements.
During fiscal 2022, the Company entered into a partnership agreement for a 30% interest in the development of a retail center in Old Bridge, New Jersey, which includes the Village Old Bridge replacement store with an operating lease obligation of $4,328 as of July 26, 2025. As of July 26, 2025, Village has invested $17,694 into the real estate partnership, which is accounted for as an equity method investment included in Investments in Real Estate Partnerships on the Consolidated Balance Sheet. No additional equity investment is expected for this project.
Village is a limited partner in two additional partnerships, one of which owns a shopping center in which one of our leased stores is located. The Company is also a general partner in a partnership that is a lessor of one of the Company's freestanding stores.
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