Leases

Operating Leases

The Company currently leases office and research laboratory space, equipment and vehicles in various facilities under operating agreements expiring at various dates through 2028.

The following table contains information about our current significant leased properties as of December 31, 2018:



Location	Approximate Square Feet	Use	Lease expiry date
Cranbury, New Jersey	90,000	Office and laboratory	September 2025
United Kingdom	46,617	Office	August 2028
Princeton, New Jersey	21,922	Office	January 2022

In addition to the above, we also maintain offices in Germany, Netherlands, Italy, Spain, France, Japan, Canada, Denmark, and Australia. 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, 2018, aggregate annual future minimum lease payments under these leases are as follows:



(in thousands)	2019		2020		2021		2022		2023 and beyond		Total
Minimum lease payments	$	6,244	$	4,063	$	3,560	$	3,371	$	13,649	$	30,887

Rent expense, including fees for utilities and common area maintenances for the years ended December 31, 2018, 2017 and 2016 were $5.7 million, $3.9 million and $3.5 million, respectively.

Subsequent to December 31, 2018, the Company entered into several new lease arrangements for additional office and research laboratory space in the U.S. and internationally. These leases will be accounted for under ASU 2016-02, Leases (Topic 842) during the first quarter of 2019. The future minimum lease payments of these leases range from approximately $1.5 million to $6.1 million annually over the next five years.

Capital Leases

In 2018, the Company purchased vehicles of approximately $0.2 million through financing arrangements. These financing arrangements include interest of approximately 5.0%-7.0%, and lease terms of 36-48 months.

In 2016, the Company purchased equipment of approximately $0.9 million through financing arrangements. These financing arrangements include interest of approximately 2.0%-5.7%, and lease terms of 36-48 months.

At December 31, 2018, aggregate annual future minimum lease payments under these leases, including interest, are as follows (in thousands):



Years ending December 31:
2019	$	194
2020	60
2021	47
2022	30
2023 and beyond	—
Total principal obligation	$	331