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Build-to-Suit Lease
6 Months Ended
Jun. 30, 2016
Leases Operating [Abstract]  
Build-to-Suit Lease

NOTE 8—BUILD-TO-SUIT LEASE

In December 2015 the Company entered into a long-term property lease which includes construction by the lessor of a building with approximately 41,400 square feet of space, in Richmond, California. The lease agreement expires five years after substantial completion of the building, which is estimated to occur in late 2016. The Company has two options to extend the lease term for up to a combined additional ten years.

The Company is deemed, for accounting purposes only, to be the owner of the entire project including the building shell, even though it is not the legal owner. In connection with the Company’s accounting for this transaction, the Company will capitalize costs of construction as a build-to-suit property within property and equipment, net, and recognize a corresponding build-to-suit lease obligation for the same amount. As of June 30, 2016, $0.2 million of costs were capitalized in construction in progress with a corresponding build-to-suit lease obligation recognized related to this lease.

Upon construction a portion of the monthly lease payment will be allocated to land rent and recorded as an operating lease expense and the non-interest portion of the amortized lease payments to the landlord related to the rent of the building will be applied to reduce the build-to-suit lease obligation.