Leases

9 Months Ended

Sep. 30, 2023

4. Leases

As of September 30, 2023, our lease portfolio consists entirely of operating leases, most of which are for corporate offices. Our operating leases have remaining lease terms with various expiration dates through 2031, and some leases include options to extend the term for up to an additional 10 years.

Lease Costs

Expense for operating leases is recognized on a straight-line basis over the lease term as an operating expense. We have lease agreements which require payments for lease and non-lease components (i.e., common area maintenance) that are accounted for as a single lease component. Variable lease payment amounts that cannot be determined at the commencement of the lease such as maintenance costs, utilities, and service charges, are not included in right-of-use (“ROU”) assets or lease liabilities but rather are expensed as incurred and recorded as variable lease expense. We often receive customary incentives from our landlords such as tenant improvement allowances (“TIAs”) and rent abatement periods, which effectively reduce total lease payments owed for the leases.

The following table sets forth the components of lease expense for the three and nine months ended September 30, 2023 and 2022 (in thousands, exclusive of sublease income):


	Three Months Ended September 30,				Nine Months Ended September 30,
	2023		2022		2023		2022
Operating lease cost	$	2,359	$	1,708	$	6,650	$	4,968
Short-term lease cost	350		170		1,138		334
Variable lease cost	1,311		952		3,296		2,878
Total	$	4,020	$	2,830	$	11,084	$	8,180

Sublease income totaled $0.3 million and $1.0 million for the three and nine months ended September 30, 2023, respectively.

Supplemental Lease Information

Supplemental balance sheet information related to operating leases as of September 30, 2023 and December 31, 2022 is presented in the following table (in thousands, except for lease term and discount rate):


	September 30, 2023			December 31, 2022
Right-of-use assets for operating leases	$	40,501		$	37,248

Operating lease liabilities, current	$	11,003		$	8,681
Operating lease liabilities, net of current portion	60,339			57,225
Total operating lease liabilities	$	71,342		$	65,906

Weighted average remaining lease term (in years)	7.7			8.4

Weighted average discount rate	9.4		%	9.4		%

Supplemental cash flow and expense information related to operating leases for the three and nine months ended September 30, 2023 and 2022 is shown below (in thousands):


	Three Months Ended September 30,				Nine Months Ended September 30,
	2023		2022		2023		2022
Operating cash outflows for operating leases	$	2,223	$	2,099	$	6,374	$	6,258

Amortization of operating lease right-of-use assets	693		364		1,936		995
Interest expense on operating lease liabilities	1,667		1,332		4,714		3,957

For the three and nine months ended September 30, 2023, TIA reimbursements totaled $1.0 million and $2.6 million, respectively. There were no TIA reimbursements for the three months ended September 30, 2022, while TIA reimbursements totaled $2.0 million for the nine months ended September 30, 2022.

A summary of our future minimum lease commitments under non-cancellable operating leases as of September 30, 2023 is shown below (in thousands):


	Operating Leases
2023 (excluding the nine months ended September 30, 2023)	$	3,223
2024	13,269
2025	12,924
2026	13,245
2027	13,501

Thereafter	47,285
Total lease payments	103,447
Less: imputed interest	(32,105)
Total	$	71,342