Leases

3 Months Ended

Mar. 31, 2023

Leases [Abstract]

Leases

4. Leases

On February 11, 2023, the Company executed a lease assignment as sub-lessee pursuant to which the Company will sublease approximately 179,496 square feet of office space in San Mateo, California for a lease term of approximately seven years (the “Sub-Lessee Agreement”). Concurrent with the execution of the Sub-Lessee Agreement, the Company executed a sublease as sub-lessor pursuant to which it will sublease a total of approximately 78,911 square feet of its San Mateo, California corporate headquarters (the “San Mateo Headquarters”) to the sub-lessee for a lease term of approximately four years (the “Sub-Lessor Agreement”).

The total lease payments under the Sub-Lessee Agreement are approximately $85.6 million over the lease term and the Company expects to take possession of the assigned space in the second quarter of 2023. The total lease payments due to the Company under the Sub-Lessor Agreement are $22.2 million over the lease term and the Company provided possession to the sub-lessee to one of the floors in April 2023, with possession of the remaining floor expected to be provided during the third quarter of 2023.

As a result of the Sub-Lessor Agreement, the Company recognized a $7.0 million impairment loss within general and administrative expenses in its condensed consolidated financial statements during the three months ended March 31, 2023, which included $4.8 million related to the San Mateo Headquarters operating lease right-of-use asset and $2.2 million related to property and equipment, net associated with the San Mateo Headquarters.