The Company determines if an arrangement is or contains a lease at inception. Operating lease right-of-use (ROU) assets and liabilities are presented separately on our consolidated balance sheets. The Company does not have any finance leases.

Operating lease ROU assets and operating lease liabilities are recognized based on the present value of the future minimum lease payments over the lease term beginning at the commencement date. As the Company’s leases do not provide enough information to determine an implicit interest rate, the Company determines its incremental borrowing rate based on the rate of interest that the Company would have to pay to borrow on a collateralized basis over a similar term in a similar economic environment. The operating lease ROU assets also include any lease payments made and excludes lease incentives and initial direct costs incurred. Lease terms may include options to extend or terminate the lease when it is reasonably certain that the Company will exercise that option. Lease expense for minimum lease payments is recognized on a straight-line basis over the lease term.

As of December 31, 2019, the Company has operating leases for approximately 56,500 square feet of office and lab space in two separate facilities in South San Francisco, California (the “Existing Facilities”). All of the lease agreements associated with the Existing Facilities expire on or before April 30, 2020 and there are no options to extend the leases. The Company does not plan to cancel the existing lease agreements for its Existing Facilities prior to their respective expiration dates.

Information related to operating leases as of December 31, 2019 and upon adoption of ASC 842 on January 1, 2019 is as follows (in thousands, except for percentages and years):

	December 31, 2019			January 1, 2019
Assets
Operating lease right-of-use assets	$	417		$	1,940

Liabilities
Operating lease liabilities - current	$	383		$	2,126

Weighted average remaining lease term (years)		0.3			1.0
Weighted average discount rate		6	%		6	%

Information related to operating lease activity during the year ended December 31, 2019 follows (in thousands):

	Year Ended
	December 31, 2019
Operating lease right-of-use assets obtained in exchange for lease obligations	$	1,095

Operating lease rental expense	$	2,760

Operating lease payments	$	3,007

Future annual payments of operating lease liabilities as of December 31, 2019 are as follows (in thousands):

Year ending December 31:	Amount
2020		387
Total future lease payments		387
Less: imputed interest		(4	)
Total operating lease liabilities	$	383

In September 2018, the Company entered into a noncancelable operating lease (the “Lease”) for approximately 129,800 square feet of space in Brisbane, California (the “New Facility”). As of December 31, 2019, the Company has capitalized $9.1 million of tenant improvements as construction in progress within property and equipment. The lease commencement date was in January 2020 and the Company will record the ROU asset and lease liability on its balance sheet in accordance with ASC 842 in the first quarter of 2020. The Company will also reclass the amount included as tenant improvement within property and equipment on the December 31, 2019 balance sheet to leasehold improvements within property and equipment and amortize it over the lease term of 10 years. The Lease grants the Company an option to extend the Lease for an additional 10-year period. As of December 31, 2019, future minimum rental payments under the Lease during the 10-year term are $93.2 million in the aggregate. The Lease further provides that the Company is obligated to pay to the landlord certain costs, including taxes and operating expenses.

In September 2018, the Company provided a standby letter of credit of $1.9 million as security for its obligations under the Lease. This standby letter of credit is classified on the balance sheet as restricted cash and other.

Future annual minimum operating lease payments due under the Lease are as follows (in thousands):

Year ending December 31:	Amount
2020		5,454
2021		8,461
2022		8,757
2023		9,063
2024		9,381
Thereafter		52,063
Total	$	93,179

The adoption of ASC 842 did not materially affect the amount or timing of operating lease rent expense to be recognized during the year ended December 31, 2019 as compared to accounting under the prior guidance. Operating lease rent expense for the year ended December 31, 2019, 2018 and 2017 was $2.8 million, $2.1 million and $1.4 million, respectively, which is included in operating expenses on the Company’s consolidated statements of operations and comprehensive loss. The operating leases require the Company to share in prorated operating expenses and property taxes based upon actual amounts incurred; those amounts are not fixed for future periods and, therefore, are not included in the future commitments listed above.