13 - LEASES

Effective April 4, 2011, the Company entered into a seven-year sub-sublease agreement for its main office in New York, New York. The term of the sub-sublease commenced June 1, 2011, with a free base rental period until October 31, 2011. Following the expiration of the free base rental period, the monthly base rental payments were $82 per month until May 31, 2015 and thereafter were $90 per month until the end of the seven-year term. Pursuant to the sub-sublease agreement, the sublessor was obligated to contribute $472 toward the cost of the Company’s alterations to the sub-subleased office space. The Company has also entered into a direct lease with the over-landlord of such office space that commenced immediately upon the expiration of such sub-sublease agreement, for a term covering the period from May 1, 2018 to September 30, 2025; the direct lease provided for a free base rental period from May 1, 2018 to September 30, 2018. Following the expiration of the free base rental period, the monthly base rental payments are $186 per month from October 1, 2018 to April 30, 2023 and $204 per month from May 1, 2023 to September 30, 2025. For accounting purposes, the sub-sublease agreement and direct lease agreement with the landlord constitute one lease agreement.

The Company adopted ASC 842 using the transition method on January 1, 2019 (refer to Note 2 — Summary of Significant Accounting Policies) and has identified this lease as an operating lease. Total operating lease cost recorded during the three months ended March 31, 2019 was $452, which was recorded in General and administrative expenses in the Condensed Consolidated Statements of Operation. Variable rent expense, such as utilities and escalation expenses, are excluded from the determination of the operating lease liability, as the Company has deemed these insignificant.

Supplemental Condensed Consolidated Balance Sheet information related to the Company’s operating leases as of March 31, 2019 are as follows:


	March 31,
	2019
Operating Lease:
Operating lease right-of-use asset	$	9,425

Current operating lease liabilities	$	1,613
Long-term operating lease liabilities		11,092
Total operating lease liabilities	$	12,705

Weighted average remaining lease term (years)		6.51
Weighted average discount rate		5.15	%

Maturities of operating lease liabilities as of March 31, 2019 are as follows:


	March 31,
	2019
Remainder of 2019	$	1,672
2020		2,230
2021		2,230
2022		2,230
2023		2,378
Thereafter		4,292
Total lease payments		15,032
Less imputed interest		(2,327)
Present value of lease liabilities	$	12,705

Maturities of operating lease liabilities as of December 31, 2018 are as follows:


	December 31,
	2018
2019	$	2,230
2020		2,230
2021		2,230
2022		2,230
2023		2,378
Thereafter		4,292
Total lease payments		15,590

Supplemental Condensed Consolidated Cash Flow information related to leases are as follows:


	For the Three
	Months Ended
	March 31,
	2019
Cash paid for amounts included in the measurement of lease liabilities:
Operating cash flows from operating lease	$	557

Under the previous leasing guidance under ASC 840, the Company had deferred rent at December 31, 2018 of $3,468. Rent expense pertaining to this lease for the three months ended March 31, 2018 under ASC 840 was $452.

During the second quarter of 2018, the Company began chartering-in third-party vessels. Under ASC 842, the Company is the lessee in these agreements. The Company has elected the practical expedient under ASC 842 to not recognize right-of-use assets and lease liabilities for short-term leases. During the three months ended March 31, 2019, all charter-in agreements for third-party vessels were less than twelve months and considered short-term leases. Refer to Note 2 — Summary of Significant Accounting Policies for the charter hire expenses recorded during the three months ended March 31, 2019 for these charter-in agreements.