LEASES

12 Months Ended

Dec. 31, 2019

Overview of Significant Leases

We lease three facilities for office and laboratory space in Cambridge, Massachusetts that represent substantially all of our significant lease obligations. An overview of these significant leases are as follows:

675 West Kendall Street

We lease office and laboratory space located at 675 West Kendall Street, Cambridge, Massachusetts from BMR-675 West Kendall Street, LLC, or BMR, under a non-cancelable real property lease. In September 2019, we moved our corporate headquarters and research facility to this location from our 300 Third Street location. The lease commenced on May 1, 2018 and monthly rent payments became due commencing on February 1, 2019 upon substantial completion of the building improvements, and continue for 15 years, with options to renew for two five-year terms each. Exercise of these options was not determined to be reasonably certain and thus was not included in the operating lease liability on the consolidated balance sheet as of December 31, 2019.

Under the terms of the 675 West Kendall Lease, BMR agreed to contribute a total of $56.1 million toward the cost of base building and tenant improvements. As of December 31, 2019, in connection with base building and tenant improvements to date, we received substantially all of the funds from BMR.

In connection with the 675 West Kendall Lease, we were required to provide a $14.8 million security deposit that is recorded as restricted investments on our consolidated balance sheet as of December 31, 2019.

300 Third Street

We lease office and laboratory space located at 300 Third Street, Cambridge, Massachusetts under a non-cancelable real property lease agreement by and between us and ARE-MA Region No. 28, LLC, or ARE-MA, dated as of September 26, 2003, as amended. The term of the lease expires on January 31, 2034 with options to renew for two five-year terms each. Exercise of these options was not determined to be reasonably certain and thus was not included in the operating lease liability on the consolidated balance sheet as of December 31, 2019.

101 Main Street

We lease office space on several floors at 101 Main Street, Cambridge, Massachusetts under non-cancelable real property lease agreements by and between us and RREEF America REIT II CORP. PPP, or RREEF, entered into in March 2015 and May 2015 that will expire in March 2024 and June 2021, respectively, each with an option to renew for one five-year term. Exercise of these options was not determined to be reasonably certain and thus was not included in the operating lease liability on the consolidated balance sheet as of December 31, 2019.

Other Lease Disclosures

Our facility leases described above generally contain customary provisions allowing the landlords to terminate the leases if we fail to remedy a breach of any of our obligations under any such lease within specified time periods, or upon our bankruptcy or insolvency. The leases do not include any restrictions or covenants that had to be accounted for under the lease guidance.

Total rent expense, including operating expenses, under our real property leases was $52.4 million, $40.6 million and $18.7 million for the years ended December 31, 2019, 2018 and 2017, respectively.

The below table summarizes our costs included in operating expenses related to right of use lease assets we have entered into through December 31, 2019, in thousands:


Description	Year Ended December 31, 2019
Operating lease cost	$	38,613
Variable lease cost	15,209
Total	$	53,822

Short-term lease costs were not material for the year ended December 31, 2019.

Net cash paid for the amounts included in the measurement of the operating lease liability in our consolidated balance sheet and included in operating lease liability within operating activities in our consolidated statement of cash flow was $33.7 million for the year ended December 31, 2019. The weighted-average remaining lease term and weighted-average discount rate for all leases as of December 31, 2019 was 13.2 years and 8.2%, respectively.

Future lease payments for non-cancellable operating leases and a reconciliation to the carrying amount of the operating lease liability presented in the consolidated balance sheet as of December 31, 2019 were as follows, in thousands:


Year Ending December 31
2020	$	29,157
2021	37,597
2022	37,754
2023	36,250
2024	35,381
2025 and thereafter	356,567
Total undiscounted lease liability	532,706
Less imputed interest	(225,873)
Less impact of future leases not yet commenced	(3,010)
Total discounted lease liability	$	303,823

Current operating lease liability	$	27,688
Non-current operating lease liability	276,135
Total	$	303,823

Under the prior lease guidance, minimum payments under our non-cancelable facility leases, as of December 31, 2018, were as follows, in thousands:


Year Ending December 31
2019	$	32,228
2020	34,826
2021	34,410
2022	34,826
2023	35,270
Thereafter	390,455
Total	$	562,015