The Company leases certain equipment and facilities under operating leases which expire at various dates through December 2028. Gross rent expense was $4.0 million, $3.9 million and $4.1 million during the years ended December 31, 2018, 2017 and 2016, respectively.

In July 2015, the Company entered into a lease agreement for office space in San Mateo, California with a lease term until December 2028 (“San Mateo facility”). The Company uses the San Mateo facility for corporate headquarter functions, as well as product and engineering, sales and marketing, and administrative operations. The space rented is for the total office space available in the building, which was in the process of being constructed at the time the lease agreement was executed. Because of the Company’s involvement during the construction period, the Company is considered for accounting purposes to be the owner of the construction project. Accordingly, the building under construction was accounted for as owned real estate and was capitalized in the Company’s consolidated balance sheets as property and equipment-building with a corresponding non-current financing obligation on leased facility. Construction was completed in 2016 and the Company capitalized $71.8 million of construction costs for the building (see Note 5 for additional information). Additionally, the Company incurred additional leasehold improvement costs of which $14.3 million was reimbursed by the landlord (of which $6.8 million and $7.5 million was incurred during 2017 and 2016, respectively).

As of December 31, 2018 and 2017, the corresponding liability related to the construction costs incurred by the landlord totaled $92.0 million and $93.4 million, respectively, and is reflected in the consolidated balance sheets as financing obligations on leased facility. The obligation will be settled through monthly lease payments to the landlord and will include imputed interest on the unpaid financing obligation and ground lease.

As discussed in Note 1 above under “Accounting Pronouncements Not Yet Adopted”, the Company plans to adopt the requirements of ASU 2016-02 as of January 1, 2019 and currently expects that the San Mateo Lease will be classified as an operating lease.

The Company previously leased office space in Palo Alto, California with a lease term until March 2026 (“Palo Alto facility”). The Company used the Palo Alto facility for corporate headquarter functions, as well as product and engineering, sales and marketing and administrative operations. As a result of the Company’s involvement during the construction period, the Company was considered the owner of the building and accounted for the building as owned real estate. In October 2016, the Company and the landlord entered into a Lease Termination Agreement to terminate the Palo Alto facility lease effective as of December 30, 2016. The landlord concurrently entered into a new lease with a new lessee for the Palo Alto facility and the Company did not incur any lease termination penalties as a result of the early lease termination. As the Company’s continuing involvement ended upon termination of the lease, the Company derecognized the building’s net book value of $60.1 million, which approximated the financing obligation’s carrying value at the time of exiting the premises. In addition, the Company also entered into an Asset Purchase Agreement with the new lessee for sale of certain property and equipment for $3.0 million and recognized a gain of $0.9 million which is included in other non-operating income (expense) in the consolidated statements of operations for the year ended December 31, 2016.

As of December 31, 2018, future minimum lease payments under operating leases and financing obligations, net of sublease income, by year were as follows:

	Gross Minimum Lease Payments
(in thousands)	Financing Obligation- Leased Facility		Operating Leases		Sublease Income			Minimum Lease Payments, net
2019	$	10,621	$	3,172	$	(5,409	)	$	8,384
2020		10,956		2,479		(3,940	)		9,495
2021		11,291		926		(2,799	)		9,418
2022		11,649		635		(336	)		11,948
2023		12,008		708		—			12,716
Thereafter		65,949		2,832		—			68,781
Total	$	122,474	$	10,752	$	(12,484	)	$	120,742

In addition to commitments above, we have open non-cancellable purchase orders for the procurement of goods and services in the ordinary course of business totaling $15.7 million to be received through 2021.

As of December 31, 2018, the Company had standby letters of credit for $7.8 million which were issued in connection with certain leases.

From time to time, the Company is subject to legal proceedings and litigation arising in the ordinary course of business, which may include, but is not limited to, patent and privacy matters, labor and employment claims, class action lawsuits, as well as inquiries, investigations, audits and other regulatory proceedings. Periodically, the Company evaluates developments in its legal matters and records a liability when it believes that it is both probable that a loss has been incurred and the amount can be reasonably estimated. Significant judgment is required to determine both the likelihood of there being, and the estimated amount of, a loss related to such matters, and the Company's judgment may be incorrect.

There are currently no legal matters or claims that have arisen from the normal course of business that the Company believes would have a material impact on the Company’s financial position, results of operations or cash flows.

The Company’s subscription services are generally warranted to perform materially in accordance with the Company’s online help documentation under normal use and circumstances. Additionally, the Company’s arrangements generally include provisions for indemnifying customers against liabilities if its subscription services infringe a third party’s intellectual property rights. Furthermore, the Company may also incur liabilities if it breaches the security or confidentiality obligations in its arrangements. To date, the Company has not incurred significant costs and has not accrued a liability in the accompanying consolidated financial statements as a result of these obligations.