In May 2022, the Company entered into a new operating lease agreement for 51,822 square feet of office and laboratory space in Redwood City, California for a term of approximately 11.7 years with total undiscounted minimum lease payments of approximately $56.5 million. The Redwood City lease contains annual rent escalation and rent abatement clauses as well as an allowance of approximately $9.8 million for tenant improvements. The Redwood City lease is subject to an option to extend the lease term for a period of five years. The optional period is not included in the lease term used to determine the ROU asset or lease liability associated with this lease as the Company did not consider it reasonably certain it would exercise the option. The Company consulted a qualified third-party valuation specialist and determined an incremental borrowing rate of 8.5% to be used as the discount rate of for measuring the related operating lease liabilities.

The Company also leases office and laboratory space in Gaithersburg, Maryland that has a term that expires in 2030 unless renewed. This operating lease agreement contains rent escalation, rent abatement clauses, tenant improvement allowances, and optional renewal clauses. Both Redwood City and Gaithersburg leases include variable lease payments, which are primarily related to common area maintenance and utility charges. The Company also has short-term operating leases with a term of one year or less.

The Lonza SOW contains an embedded lease as the Company has the exclusive use of, and control over, a portion of the manufacturing facility and equipment of the supplier during the contractual term of the manufacturing arrangement. The commencement date of the embedded lease is expected to be in the second half of 2022.

For the Company’s operating leases, the weighted-average remaining lease term was 11.0 years and the weighted-average discount rate was 8.5% as of June 30, 2022.

The Company's total operating lease costs were as follows (in thousands):


	Three Months Ended June 30, 2022		Six Months Ended June 30, 2022
Operating lease costs	$	664	$	827
Short-term lease costs		380		757
Variable lease costs		152		166
	$	1,196	$	1,750

As of June 30, 2022, future minimum operating lease payments were as follows (in thousands):


Through December 31, 2022	$	899
2023		3,075
2024		5,073
2025		5,618
2026		5,806
2027		6,000
Thereafter		36,868
Total operating lease payments		63,339
Less:
Tenant improvement incentive		(9,846	)
Imputed interest		(23,980	)
Present value of total operating lease liabilities	$	29,513

Supplemental cash flow information related to operating leases is as follows (in thousands):


	Six Months Ended June 30, 2022
Cash paid for amounts included in the measurement of operating lease liabilities	$	773
ROU assets obtained in exchange for operating lease liabilities		27,722