In July 2017, the Company entered into a lease of office and laboratory space for its headquarters in Watertown, Massachusetts, or the Watertown Lease. The Watertown Lease had a non-cancelable term of ten years with an option to extend for one additional five-year period and is subject to rent escalation throughout the term. Additionally, the Watertown Lease required the Company to provide collateral, which was recorded as restricted cash on the consolidated balance sheets. The Watertown Lease commenced in April 2018. The Watertown Lease was classified as an operating lease and, upon the commencement in April 2018, the Company recorded a lease liability of $15.1 million and a right-of-use asset of $16.7 million, which is inclusive of $1.5 million of construction costs funded by the Company. In initially calculating the lease liability and the right-of-use asset, the Company did not include the additional five-year period option as management did not believe there was reasonable certainty that the Company would exercise the option. In addition to rent, the Company is also responsible for paying its pro rata share of costs incurred for common area maintenance, real estate taxes and property insurance related to the leased space, which are accounted for as variable lease costs.

In November 2021, the Company entered into an amendment to the Watertown Lease, or the Amended Lease. The Amended Lease serves to extend the lease term of the Company’s existing leased space, or the Existing Leased Space, and provides additional office and laboratory space, or the Newly Leased Space. The Amended Lease commenced in January 2022 and the Company’s obligation to pay rent on the Newly Leased Space commencing two months after the lease commencement date for the Newly Leased Space and terminating in January 2032, which is 10 years from the rent commencement date for the Newly Leased Space. The Amended Lease is subject to fixed rate rent escalations, provides for up to $2.6 million in tenant improvements, and provides an option for the Company to extend the lease term of the Amended Lease for one additional five-year period. Upon executing the Amended Lease, the Company increased its collateral to $3.3 million, which is recorded as restricted cash on the accompanying consolidated balance sheets. In addition to rent, under the terms of the Amended Lease, the Company is also responsible for paying its pro rata share of costs incurred for common area maintenance, real estate taxes and property insurance related to the leased space, including both the Existing Leased Space and, as of January 2022, the Newly Leased Space, which amounts are accounted for as variable lease costs.

As the Amended Lease extends the term of the Existing Leased Space and provides access to the Newly Leased Space, in accordance with the provisions of ASC 842, the Company accounted for the Amended Lease as two separate contracts: 1) modification of the existing lease agreement to extend the lease term of the Existing Leased Space, and 2) new lease agreement for the right-of-use of the Newly Leased Space.

As the Company maintained control of the Existing Leased Space upon execution of the Amended Lease, the Company recorded an increase in right-of-use asset and lease liability of $20.1 million related to the new rental payments during the extended term and current incremental borrowing rate of the Existing Leased Space upon execution of the Amended Lease. The calculation of the lease liability and the right-of-use asset of the Existing Leased Space does not include the additional five-year period option as the Company does not believe there is reasonable certainty that the option will be exercised.

As the lease for the Newly Leased Space did not commence prior to December 31, 2021, the Company did not record a right-of-use asset or the corresponding lease liability for the Newly Leased Space on the accompanying consolidated balance sheets as of December 31, 2021. The undiscounted lease payments for the Newly Leased Space are expected to be $62.1 million, which is not included in the future lease payments table below but will be included in the financial statements for periods ending after the lease commencement date for the Newly Leased Space. As stated above, the Amended Lease provides for up to $2.6 million of tenant improvement allowance. As of December 31, 2021, no tenant improvement allowances have been recorded as the improvements will begin in 2022.

	Years Ended December 31,
	2021		2020		2019
Lease cost:
Operating lease cost	$	2,686	$	2,550	$	2,550
Variable lease cost		857		1,066		1,020
Total lease cost	$	3,543	$	3,616	$	3,570

The following table summarizes the lease term and incremental borrowing rate applied in arriving at the lease liability:

	As of December 31,
	2021			2020
Remaining lease term	10.2 years			7.3 years
Incremental borrowing rate		5.2	%		10.0	%

Future lease payments under non-cancelable leases as of December 31, 2021 for each of the years ending December 31 are as follows (in thousands):

Undiscounted lease payments*:
2022	$	2,994
2023		3,491
2024		3,596
2025		3,704
2026		3,815
Thereafter		25,085
Total undiscounted lease payments		42,685
Less: imputed interest		(10,574	)
Total operating lease liability as of December 31, 2021	$	32,111

*As stated above, this table does not include lease payments for the Newly Leased Space under the Amended Lease as the commencement date is subsequent to December 31, 2021.