Quarterly report pursuant to Section 13 or 15(d)


3 Months Ended
Mar. 31, 2019
Leases [Abstract]  
11. Leases
On October 3, 2014, the Company entered into a 15-year lease for office space at 2 Gansevoort Street, New York, NY 10014, at an average annual rent of $2.7 million. The Company took possession of this space, which serves as its principal executive offices, in December 2015, and took occupancy in April 2016. Total rent expense, over the full term of the lease for this space will approximate $40.7 million. In conjunction with the lease,
the Company
 entered into Desk Space Agreements with two related parties: OPPM and TGTX, to occupy 10% and 45%, respectively, of the office space that requires them to pay their share of the average annual rent of $0.3 million and $1.1 million, respectively. The total net rent expense will approximate $16.0 million over the lease term. These initial rent allocations will be adjusted periodically for each party based upon actual percentage of the office space occupied. Additionally,
the Company has 
reserved the right to execute desk space agreements with other third parties and those arrangements will also affect the cost of the lease actually borne by us.
In October 2015, the Company entered into a 5-year lease for approximately 6,100 square feet of office space in Waltham, MA at an average annual rent of approximately $0.2 million. The Company took occupancy of this space in January 2016.
In June 2017, Journey extended its lease for 2,295 square feet of office space in Scottsdale, AZ by one year, at an average annual rent of approximately $55,000. Journey originally took occupancy of this space in November 2014. In August 2018, Journey amended their lease and entered into a new two-year extension for 3,681 square feet of office space in the same location in Scottsdale, AZ at an annual rate of approximately $94,000. The term of this amended lease commenced on December 1, 2018 and will expire on November 30, 2020.
On October 27, 2017, Mustang entered into a lease agreement with WCS - 377 Plantation Street, Inc., a Massachusetts nonprofit corporation (“Landlord”). Pursuant to the terms of the lease agreement, Mustang agreed to lease 27,043 square feet from the Landlord, located at 377 Plantation Street in Worcester, MA (the “Facility”), through November 2026, subject to additional extensions at Mustang’s option. Base rent, net of abatements of $0.6 million over the lease term, totals approximately $3.6 million, on a triple-net basis. Mustang
has made 
improvements to the facility of approximately $3.9 million.
The Facility initiated cell processing operations for both personalized CAR T and gene therapies in late 2018.
The Company leases copiers under agreements classified as operating leases that expire on various dates through 2021. 
Most of the Company’s lease liabilities result from the lease of its New York City, NY office, which expires in 2031 and Mustang’s Worcester, MA cell processing facility lease which expires in 2026. Such leases do not require any contingent rental payments, impose any financial restrictions, or contain any residual value guarantees.  Certain of the Company’s leases include renewal options and escalation clauses; renewal options have not been included in the calculation of the lease liabilities and right of use assets as the Company is not reasonably certain to exercise the options.  The Company does not act as a lessor or have any leases classified as financing leases. At March 31, 2019, the Company had operating lease liabilities of $26.5 million and right of use assets of $22.6 million, which were included in the condensed balance sheet.
During the three months ended March 31, 2019, the Company recorded $0.8 million as lease expense to current period operations.
As of
($ in thousands)
March 31, 2019
Lease cost        
Operating lease cost   $ 796  
Shared lease costs     (477 )
Variable lease cost     26  
Total lease cost   $ 345  
The following tables summarize quantitative information about the Company’s operating leases, under the adoption of 
Topic 842
($ in thousands)
Three Months Ended

March 31, 2019
Operating cash flows from operating leases
Right-of-use assets exchanged for new operating lease liabilities
Weighted-average remaining lease term – operating leases (years)
Weighted-average discount rate – operating leases
($ in thousands)
Future Lease 
Nine months ended December 31, 2019
Year ended December 31, 2020
Year ended December 31, 2021
Year ended December 31, 2022
Year ended December 31, 2023
Total operating lease liabilities
Less: present value discount
Net operating lease liabilities, short-term and long-term
At December 31, 2018, the total future minimum lease payments under all leases were:
($ in thousands)
Total minimum lease payments