The Company leases its corporate headquarters, which includes approximately 136,293 square feet of executive offices and research and development and business operations, in an office park in Hayward, California under a non-cancelable operating lease with terms that expire from 2025 to 2029, subject to options by the Company to extend the lease term. The Company also leases space in Brisbane, California under a non-cancelable operating lease that is expected to commence in 2021 and extend through 2031.

In June 2020, the Company entered into a lease amendment for 36,303 square feet of additional space in Hayward, California, that is expected to commence during 2021 for an eight-year term with undiscounted minimum lease payments totaling approximately $10.1 million. The new lease is subject to an option to extend the lease term for eight years. The lease amendment includes an allowance of approximately $1.0 million for tenant improvements. The space was delivered to the Company in August 2020, as a result the Company has recognized a right-of-use asset and a lease liability for the building on its balance sheet at December 31, 2020.

In December 2020, the Company entered into a lease agreement for 109,237 square feet of space in Brisbane, California, that is expected to commence in the second half of 2021 for a term of approximately ten years with undiscounted minimum lease payments totaling approximately $90.3 million. The lease is subject to two options to extend the lease term for a period of eight years each. The lease agreement includes an allowance of approximately $12.6 million for tenant improvements with an option to increase the allowance by $5.5 million. The space was under construction at December 31, 2020 and has not been delivered to the Company.

At December 31, 2020 the Company’s lease portfolio had a weighted average remaining term of 6.2 years. The leases require monthly lease payments that are subject to annual increases throughout the lease term. The optional period has not been considered in the determination of the right-of-use assets or lease liabilities associated with this lease as the Company did not consider it reasonably certain it would exercise the option.

The Company cannot determine the implicit rate in its leases, and therefore the Company uses its incremental borrowing rate as the discount rate when measuring operating lease liabilities. The incremental borrowing rate represents an estimate of the interest rate the Company would incur at lease commencement to borrow an amount equal to the lease payments on a collateralized basis over the term of a lease within a particular currency environment. The Company used an incremental borrowing rate of 10% as of the date of adoption for leases that commenced prior to January 1, 2020. The weighted average discount rate for the Company’s lease portfolio at December 31, 2020 was 7.3%.

For the year ended December 31, 2020, the Company incurred $2.7 million of lease costs included in operating expenses in the consolidated statements of income and comprehensive income in relation to its operating lease, a portion of which was variable rent expense and not included within the measurement of the Company’s operating ROU assets and lease liabilities. The variable rent expense consists primarily of the Company’s proportionate share of operating expenses, property taxes, and insurance and is classified as lease expense due to the Company’s election to not separate lease and non-lease components. Short-term lease costs were $0.2 million for the year ended December 31, 2020. At December 31, 2020, the Company’s operating lease right-of-use asset totaled $12.8 million, and the operating lease liability totaled $18.1 million. The short-term portion of the operating lease liability was $2.9 million and is contained within other current liabilities on the balance sheet, with the remaining $15.2 million liability reported on the balance sheet as operating lease liability, noncurrent.

Rent expense was $1.6 million for each of the years ended December 31, 2019 and 2018.

As of December 31, 2020, the Company’s future minimum lease payments were as follows (in thousands):

	Year Ended December 31,
	2020 ⁽¹⁾			2019 ⁽²⁾
2020		-			2,105
2021		4,041			2,195
2022		3,409			2,265
2023		3,522			2,339
2024		3,640			2,415
2025		3,340			2,072
Thereafter		4,311			-
Total undiscounted future minimum lease payments		22,263			13,391
Less: Imputed interest		(4,153	)	N/A
Total operating lease liabilities		18,110		N/A
Less: Current portion of operating lease liabilities (included in other current liabilities)		(2,867	)	N/A
Operating lease liabilities, noncurrent		15,243		N/A

Total undiscounted future minimum lease payments do not include approximately $90.3 million related to the Company’s Brisbane lease that has not yet commenced. This lease is expected to commence during 2021 with a lease term of approximately 10 years. Total minimum lease payments have not been reduced by minimum sublease rent income of approximately $0.1 million under a noncancelable sublease.

The Company has provided deposits for letters of credit totaling $0.2 million to secure its obligations under its lease, which have been classified as long-term assets on the Company’s consolidated balance sheet as of December 31, 2020.