In August 2007, the Company entered into an operating lease, as amended, for office and laboratory space in Watertown, Massachusetts. The lease includes certain rent escalations. In July 2023, the Company amended the lease to extend the expiration of the lease term from April 2024 to April 2027. Under the terms of the amended lease, the Company no longer has the right to terminate the lease after January 1, 2024. The Company has accounted for the amendment as a lease modification and changes to the right of use asset and liability was reflected within the consolidated balance sheets as of December 31, 2023. The impact to the right of use asset as of the lease amendment date was $4.9 million.

The Company maintains a letter of credit of approximately $0.3 million securing its obligations under the operating lease which is secured by approximately $0.3 million, which are included as restricted cash in the consolidated balance sheets. Rent expense is recognized on a straight-line basis over the terms of occupancy.

In May 2022, the Company executed a lease agreement located at 880 Winter Street in Waltham, Massachusetts. The leased premises comprise approximately 29,000 square feet of office and lab space, and the lease provides for base rent of $2.2 million per year, which will increase 3% per year over the noncancellable term ending on June 30, 2033. The Company has the option to extend the lease for one additional five-year term and is responsible for its share of real estate taxes, maintenance, and other operating expenses applicable to the leased premises. The Company did not include the option to extend the lease for the additional five-year term in its evaluation of the right-of-use asset and lease liability.

Upon lease commencement on December 21, 2023, following substantial completion of construction to prepare the premises for the Company’s use, the Company recorded the lease as a component of its operating lease right-of-use asset and operating lease liabilities. The improvements to prepare the leased premises for the Company’s intended use were funded by (i) the landlord, through a tenant allowance of $5.9 million and (ii) approximately $8.3 million funded by the Company. The Company recorded a right-of-use asset upon lease commencement in the amount of $27.6 million. In connection with the lease, a security deposit was delivered to the landlord in the form of an irrevocable standby letter of credit collateralized by $1.1 million of deposits with the financial institution which is recorded as restricted cash.

The Company also has two leases for two separate spaces in the same building at 880 Winter Street in Waltham, Massachusetts. The Company refers to the first lease as the “Waltham Lease” and the second lease arrangement as the “Waltham Sublease” as the Company, as a tenant, is subleasing space from under an existing lease arrangement whereby the lessee to the headlease has agreed to sublease the space to the Company under a sublease agreement.

In December 2023, the Company executed a sublease agreement for additional laboratory and office space located at 880 Winter Street in Waltham, Massachusetts. The subleased premises comprise approximately 24,000 square feet, and the sublease provides for base rent of $1.8 million per year, which will increase 3% per year over the noncancellable term ending on November 30, 2032. The Company is also responsible for its share of real estate taxes, maintenance, and other operating expenses applicable to the subleased premises.

Upon sublease commencement on January 3, 2024, the Company recorded the sublease as a component of its operating lease right-of-use asset and operating lease liabilities. In connection with the sublease, a security deposit was delivered to the sublandlord in the form of an irrevocable standby letter of credit collateralized by $0.6 million of deposits with the financial institution which is recorded as restricted cash.

The components of lease cost recorded in the Company’s consolidated financial statements were as follows (in thousands):


	Year Ended December 31,
	2024		2023
Lease Cost:
Operating lease cost	$	6,410	$	1,966
Variable lease cost		2,514		1,202
Total lease cost	$	8,924	$	3,168

Variable lease payments include the Company’s allocated share of costs incurred and expenditures made by the landlord in the operation and management of the building.

The weighted-average remaining lease term and discount rate related to the Company’s operating leases were as follows:


	As of December 31, 2024
Weighted-average remaining lease term (in years)		7.4
Weighted-average discount rate		6.2	%


	As of December 31, 2023
Weighted-average remaining lease term (in years)		8.2
Weighted-average discount rate		6.6	%


Year ending December 31,
2025	$	6,121
2026		6,494
2027		5,131
2028		4,507
2029		4,642
Thereafter		16,010
Total maturities		42,905
Less: Imputed interest		(8,525	)
Present value of operating lease liability		34,380
Less: Current portion of operating lease liability		(4,121	)
Total operating lease liability, net of current portion	$	30,259

Total rent expense under the Company's leases amounted to $6.4 million for the year ended December 31, 2024 and $2.0 million for the year ended December 31, 2023. The Company evaluated the above leases for impairment indicators and determined that the right-of-use assets were impaired. Additional details are included within Note 7 above.