We have operating lease agreements for the laboratory and office facilities that we occupy in Seattle, Washington and South San Francisco, California, as well as server space. Our leases include an amendment to our previous lease in South San Francisco, California to rent 19,867 additional square feet, which commenced during the nine months ended September 30, 2020 and provides for a $0.6 million tenant improvement allowance. As of September 30, 2020, we were not party to any finance leases. Our leases have remaining terms of 1.6 years to 11.8 years, and include options to extend certain of the leases up to 10.0 years and terminate certain of the leases after 3.0 years. We adjust lease terms for these options only when it is reasonably certain we will exercise these options. As of September 30, 2020, it was reasonably certain that we would exercise our option to terminate two of our leases after 3.0 years.

Other information related to our operating leases as of September 30, 2020 was as follows:

The following table reconciles our undiscounted operating lease cash flows to our operating lease liabilities as of September 30, 2020 (in thousands):

2020 (excluding the nine months ended September 30, 2020)	$	1,532
2021		6,887
2022		6,886
2023		6,450
2024		5,956
Thereafter		30,979
Total undiscounted lease payments		58,690
Less:
Imputed interest rate		(11,682	)
Tenant improvement receivables		(673	)
Total operating lease liabilities	$	46,335
Less: current portion		(3,969	)
Operating lease liabilities, less current portion	$	42,366

Operating lease expense was $1.4 million and $3.7 million for the three and nine months ended September 30, 2020, respectively. Variable lease expense for operating leases was $0.7 million and $1.8 million for the three and nine months ended September 30, 2020, respectively. Rent expense recognized under ASC 840, inclusive of operating and maintenance costs, was $1.3 million and $3.6 million for the three and nine months ended September 30, 2019, respectively.

Cash paid for amounts included in the measurement of lease liabilities for the nine months ended September 30, 2020 was $1.8 million, net of $1.8 million of cash received for tenant improvement allowances.

In August 2019, we entered into an agreement to rent 100,000 square feet in a to-be-constructed building in Seattle, Washington. In connection with the lease, we entered into a $2.1 million letter of credit with one of our existing financial institutions. Due to our significant involvement during the construction process of the leased building, we qualified as the deemed owner of the building under build-to-suit lease accounting guidance that proceeded ASC 842. The resulting asset and long-term financing obligation recorded on our balance sheet for the cost of the building was derecognized upon adoption of ASC 842. As of September 30, 2020, we have incurred $2.4 million in certain tenant improvement costs relating to the to-be-constructed building, which are presented within the other long-term liabilities line item on our unaudited condensed balance sheet as of September 30, 2020. These costs will be reimbursed by the landlord. The related receivable of $2.4 million is presented within the prepaid expenses and other current assets line item on our unaudited condensed balance sheet as of September 30, 2020.

This lease will be assessed for classification and a lease liability and corresponding ROU asset will be recorded upon lease commencement. Future non-cancellable undiscounted lease payments total $89.8 million, payable over the lease term of 12.7 years.