5. Leases

Lease Agreements

In January 2012, we entered into an operating lease agreement with Selig Holdings Company LLC to lease approximately 66,000 square feet of office space in Seattle, Washington for a term of 120 months, commencing May 1, 2012. We have two five-year options to extend the term of the lease at a market rate determined according to the lease. The initial rent amount was based on $27.00 per square foot per annum, but no payments were due during the initial five months of the lease term. Rent increases three percent over the prior year’s amount for each year thereafter for the duration of the lease. In addition, we were provided an allowance of $3.3 million for certain tenant improvements made by us.

In December 2017, we entered into an agreement to sublease approximately 44,000 square feet of our Seattle office space. No payments were due through May 2018, after which monthly rent is due through the sublease termination date in April 2022. Monthly sublease rent increases by a minor amount each January 1. In connection with the sublease, we recognized a loss and a deferred liability of $1.6 million, representing future rental payments plus related expenses in excess of the future sublease payments to be received. The loss was recorded in Selling, general and administrative expense during the year ended December 31, 2017. Other current liabilities and Other liabilities in the consolidated balance sheet include $0.2 million and $0.4 million, respectively, related to the sublease agreement as of December 31, 2018, and $0.8 million and $0.6 million, respectively, as of December 31, 2017.

Rent expense, net of sublease-related income of $1.6 million and $0.1 million for the year ended December 31, 2018 and 2017, amounted to $0.1 million and $1.6 million for the years ended December 31, 2018 and 2017, respectively.

Future Minimum Lease Payments

Future minimum lease commitments for non-cancelable operating leases, net of sublease rentals, at December 31, 2018 were as follows (in thousands):



	Operating		Sublease
	Lease Payments		Rentals Receipts		Net
2019	$	2,581	$	1,365	$	1,216
2020	2,632		1,410		1,222
2021	2,628		1,454		1,174
2022	883		499		384
Thereafter	—		—		—
Total minimum lease commitments	$	8,724	$	4,728	$	3,996