Leases

12 Months Ended

Dec. 31, 2020

Operating Leases

Our leases consist of a Lease Agreement (the Mission Bay Lease) with ARE-San Francisco No. 19, LLC (ARE) for our 153,203 square foot corporate office and R&D facility located at 455 Mission Bay Boulevard, San Francisco, California (the Mission Bay Facility) and a Lease Agreement (the Third Street Lease) with Kilroy Realty Finance Partnership, L.P. (Kilroy) for an additional 135,936 square foot facility to support our R&D operations at 360 Third Street, San Francisco, California (the Third Street Facility). The following table presents key information regarding these leases (dollars in thousands):


	Mission Bay Facility		Third Street Facility
Lease commencement	September 2017		June 2018
Lease term	January 2030		January 2030
Space delivered during the year ended December 31, 2019
Square footage	13,907		67,105
Right-of-use asset and lease liability recognized	$	6,698	$	50,993
Space delivered during the year ended December 31, 2020
Square footage	4,940		—
Right-of-use asset and lease liability recognized	$	2,133	$	—
Renewal terms	Two consecutive five-year terms		One five-year term

•The monthly base rent for both facilities will escalate over the term of the lease at various intervals.

•Both leases include various covenants, indemnities, defaults, termination rights, security deposits and other provisions customary for lease transactions of this nature.

•During the term of the Mission Bay Lease, we are responsible for paying our share of operating expenses specified in the lease, including utilities, common area maintenance, insurance costs and taxes.

•For the Third Street Lease, our fixed annual base rent on an industrial gross lease basis includes certain expenses and property taxes paid directly by the landlord. We have a one-time right of first offer with respect to certain additional rental space at the Third Street Facility.

We recognize rent expense for these operating leases on a straight-line basis over the lease period. The components of lease costs, which we include in operating expenses in our Consolidated Statements of Operations, were as follows (in thousands):


	Year Ended December 31,
	2020		2019		2018
Operating lease cost	$	18,985	$	14,697	$	7,972
Variable lease cost	8,179		6,408		4,497
Total lease costs	$	27,164	$	21,105	$	12,469

During the year ended December 31, 2020 and 2019, we recorded operating lease expense of $19.0 million and $14.7 million, respectively, and paid $16.2 million and $8.4 million, respectively, of operating lease payments related to our lease liabilities, which we include in net cash provided by (used in) operating activities in our Consolidated Statements of Cash Flows.

As of December 31, 2020, the maturities of our operating lease liabilities were as follows (in thousands):


Year ending December 31,
2021	$	17,938
2022	20,141
2023	20,780
2024	21,439
2025	22,117
2026 and thereafter	97,764
Total lease payments	200,179
Less: portion representing interest	(46,380)
Less: lease incentives	(3,511)
Operating lease liabilities	150,288
Less: current portion	(13,915)
Operating lease liabilities, less current portion	$	136,373

As of December 31, 2020, the weighted-average remaining lease term is 9.1 years and the weighted-average discount rate used to determine the operating lease liability was 5.9%.