We lease our corporate headquarters in South San Francisco, California under a non-cancellable lease agreement that expires in April 2021. In connection with the lease, we are required to maintain a letter of credit in the amount of $0.2 million to the landlord, which expires and is renewed every 12 months, and is classified as restricted cash in our consolidated balance sheet. In November 2018, we entered into a lease agreement for additional office space in Thousand Oaks, California that expires in February 2026. Additionally, we entered into a new lease for our office and lab space in Aurora, Colorado, effective May 2019, that expires in April 2024.

In February 2017, we entered into a lease agreement for approximately 90,580 square feet of office, lab and cellular therapy manufacturing space in Thousand Oaks, California. The initial 15-year term of the lease commenced on February 15, 2018, upon the substantial completion of landlord’s work as defined under the agreement. The contractual obligations during the initial term are $16.4 million in aggregate. We have the option to extend the lease for two additional periods of ten and nine years, respectively, after the initial term. In connection with the lease, we were required to issue a letter of credit in the amount of $1.2 million to the landlord, which is recorded as long-term restricted cash in our consolidated balance sheet.

Based on the terms of the lease agreement and on our involvement in certain aspects of the construction, we were deemed the owner of the building during the construction period in accordance with U.S. GAAP in effect prior to January 1, 2019. Under this build-to-suit lease arrangement, we recognized construction in progress based on all construction costs incurred by both us and the landlord. We also recognized a financing obligation equal to all costs funded by the landlord.

Due to completion of the construction by the landlord and not having met the criteria for sale-lease back accounting, we transferred the $10.3 million of landlord’s construction costs previously capitalized as construction in progress to a build-to-suit asset, and recognized a corresponding long-term financing obligation for the same amount in long-term liabilities in our consolidated balance sheets. In addition, we recorded $0.3 million of capitalized interest during the construction period through December 31, 2018. A portion of the monthly lease payment was 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 rent of the building was applied to the lease financing liability. Further, we recorded ground lease expense of $0.4 and $0.3 million for the years ended December 31, 2018 and 2017, respectively, in our consolidated statement of operations and comprehensive loss, representing the estimated cost of renting the land during the construction period. Due to the adoption of ASU No. 2016-02, Leases (Topic 842), no ground lease expense was recognized for the year ended December 31, 2019.

The maturities of lease liabilities under our operating and finance leases as of December 31, 2019 were as follows:

	Operating Leases				Finance Leases
Years Ending December 31,		(in thousands)
2020		$	2,867			$	308
2021			2,740				127
2022			2,610				116
2023			2,685				29
2024			2,591				—
Thereafter			11,887				—
Total lease payments		$	25,380			$	580
Less: amount representing interest			(9,932	)			(67	)
Present value of lease liabilities		$	15,448			$	513

Balance as of December 31, 2019
Other current liabilities		$	1,312			$	269
Operating lease liabilities			14,136				—
Other long-term liabilities			—				244
Total		$	15,448			$	513

	Year Ended
	December 31, 2019
	(in thousands)
Operating lease cost:
Operating lease cost	$	2,578
Short-term lease cost		770
Total operating lease cost	$	3,348
Finance lease cost:
Amortization expense	$	324
Interest on lease liabilities		56
Total finance lease cost	$	380

Future minimum payments under our operating, finance and capital leases as of December 31, 2018 were as follows:

	Operating Leases			Finance Leases		Capital Leases
Years Ending December 31,		(in thousands)
2019	$		1,107	$	934	$	540
2020			1,666		962		234
2021			1,555		991		29
2022			1,337		1,020		—
2023			1,375		1,051		—
Thereafter			3,122		11,458		—
Total minimum payments	$		10,162	$	16,416	$	803
Less: amount representing interest							(65	)
Present value of capital lease obligations							738
Less: current portion							(490	)
Capital lease obligation, net of current portion						$	248

Rent expense under operating leases for the years ended December 31, 2018 and 2017 was $2.2 million and $1.4 million, respectively.

	Year Ended
	December 31, 2019
	(in thousands, except lease term and discount rate)
Supplemental Cash Flows Information
Cash paid for amounts included in the measurement of lease liabilities:
Operating cash flows for operating leases	$	2,346
Operating cash flows for finance leases		50
Financing cash flows for finance leases		486

Operating lease assets obtained in exchange for lease obligations:	$	838
Finance lease assets obtained in exchange for lease obligations:		323

Weighted Average Remaining Lease Term
Operating leases	10.3 years
Finance leases	2.5 years
Weighted Average Discount Rate
Operating leases		10.4	%
Finance leases		10.0	%

The Company’s ARO consists of a contractual requirement to remove the tenant improvements at our manufacturing facility in Thousand Oaks, California and restore the facility to a condition specified in the lease agreement. The Company records an estimate of the fair value of its ARO in long-term liabilities in the period incurred. The fair value of the ARO is also capitalized in property and equipment, net and depreciated over the lease term. The fair value of our ARO was estimated by discounting projected cash flows over the estimated life of the related assets using our credit adjusted risk-free rate.