12. Leases

Operating Leases

The Company currently leases office space and research laboratory space in various facilities under operating agreements expiring at various dates through 2025.

The following table contains information about our current significant leased properties as of December 31, 2016:

Location	Approximate Square Feet		Use	Lease expiry date
Cranbury, New Jersey		90,000	Office and laboratory	September 2025
Durham, North Carolina		5,603	Office	June 2018
Buckinghamshire, United Kingdom		9,821	Office	September 2020
Munich, Germany		4,316	Office	April 2017

In addition to the above, we also maintain small offices in the Italy, France, Netherlands and Spain. We believe that our current office and laboratory facilities are adequate and suitable for our current and anticipated needs. We believe that, to the extent required, we will be able to lease or buy additional facilities at commercially reasonable rates.

Rent expenses for the Company's facilities are recognized over the term of the lease. The Company recognizes rent starting when possession of the facility is taken from the landlord. When a lease contains a predetermined fixed escalation of the minimum rent, the Company recognizes the related rent expense on a straight-line basis and records the difference between the recognized rental expense and the amounts payable under the lease as deferred rent liability. Tenant leasehold improvement allowances are reflected in accrued expenses on the consolidated balance sheets and are amortized as a reduction to rent expense in the statement of operations over the term of the lease.

At December 31, 2016, aggregate annual future minimum lease payments under these leases are as follows:

(in thousands)		2017			2018			2019			2020			2021 and beyond			Total
Minimum lease payments		$	2,666		$	2,483		$	2,421		$	2,349		$	10,537		$	20,456

Rent expense, including fees for utilities and common area maintenances for the years ended December 31, 2016, 2015 and 2014 were $3.5 million, $2.6 million and $2.4 million, respectively.

Capital Leases

In 2016, the Company purchased equipment of approximately $0.9 million through financing arrangements. These financing arrangements include interest of approximately 0.2-5.7%, and lease terms of 36-48 months.

At December 31, 2016, aggregate annual future minimum lease payments under these leases, including interest, are as follows (in thousands):

Years ending December 31:
2017	$	355
2018		355
2019		134
2020		—
2021 and beyond		—

Total principal obligation	$	844