Item 2. Properties
Item 2. Properties
San Carlos Headquarters Lease
On February 8, 2021, we entered into a lease agreement, or the New Headquarters Lease, for laboratories and offices to be constructed in Suite 400 of an existing building located at 825 Industrial Road, San Carlos, California, or the Building. Under the New Headquarters Lease, we lease approximately 49,918 rentable square feet of space in the Building that currently serves as the premises for our headquarters. The New Headquarters Lease, which commenced in January 2022, has an initial term of 120 months. The New Headquarters Lease includes an option to extend the term of the lease for 60 months, exercisable under certain conditions and at a market rate as described in the New Headquarters Lease.
Commencing 210 days after the Rent Commencement Date as the result of a rent abatement, our monthly base rent under the New Headquarters Lease is approximately $0.3 million, subject to an annual increase of 3%. We are also responsible for paying operating expenses such as common area maintenance.
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Minimum rental payments under the New Headquarters Lease total $36.7 million for the entire term of the lease, which does not include rental payments related to our one-time option to extend for an additional five years. In addition, the lessor has provided a tenant improvement allowance of up to $8.2 million, of which, to date, we have received reimbursements associated with this tenant improvement allowance totaling $8.1 million. We do not expect to receive any additional reimbursements associated with this tenant improvement allowance.
Commercial Manufacturing Facility Agreement
On May 28, 2019, we entered into a lease agreement, or the Commercial Manufacturing Facility Lease, for a build-to-suit commercial manufacturing facility, laboratories, and offices located in Philadelphia, Pennsylvania. Under the Commercial Manufacturing Facility Lease, we lease approximately 136,000 rentable square feet of space in a building located at 300 Rouse Boulevard, Philadelphia, Pennsylvania known as the Iovance Cell Therapy Center, or the i CTC. The construction of the i CTC began in July 2019 and in the third quarter of 2021 we completed the commissioning activities as well as certain tenant improvements. The Commercial Manufacturing Facility Lease includes an option to extend the term of the lease by giving the landlord prior written notice thereof at least 18 months in advance of expiration date, exercisable under certain conditions as described in the Commercial Manufacturing Facility Lease, such that the overall term, when added to the initial term, shall be 359 months.
Our monthly base rent under the Commercial Manufacturing Facility Lease is approximately $0.3 million, subject to an annual increase of 2% for the first ten years. Commencing on the first day of each lease year thereafter, for the remainder of the lease term, monthly rent is subject to an annual increase of the greater of 2% or 75% of the average ten-year consumer price index. We are also responsible for paying operating expenses, such as common area maintenance.
Tampa Lease
Our research and development facilities consist of 8,673 square feet in a facility located at the University of South Florida Research Park in Tampa, Florida. These facilities are leased under an agreement with a lease term through December 2024 for approximately $20,500 a month. In June 2020, we amended the lease agreement to further increase the rentable space to 13,139 square feet and extend the lease term to June 5, 2025, for approximately $34,500 a month. On December 22, 2021, we entered into a second amendment to lease an additional 2,731 square feet of space through June 5, 2025, co-terminus with the existing leased space. Upon completion of tenant improvements of the premise, lease payments will be approximately $45,000 per month.
Philadelphia Office Lease
On May 2, 2019, we entered into an agreement to lease approximately 1,500 square feet of office space in Philadelphia, Pennsylvania until July 1, 2019, for a rate of $2,000 a month, and then approximately 4,500 square feet of office space for the remainder of a three-year term at an initial rate of $11,063 per month, subject to annual increases of 2.5%. On September 1, 2021, we entered into an agreement to extend the lease term for an additional three years to July 31, 2025, for approximately $11,900 a month, effective as of June 1, 2022, subject to annual increases of 2.5%.
On August 1, 2020, we entered into an agreement to lease approximately 2,965 square feet of a training facility space in Plymouth Meeting, Pennsylvania for a twelve-month term at a rate of approximately $6,500 per month.
Netherlands Office Lease
On July 28, 2023, we entered into an agreement to lease a satellite office space in Amsterdam, Netherlands for a twelve-month term at a rate of approximately 5,400 € per month. Such agreement automatically renews for successive periods unless cancelled with no less than three months’ notice prior to the end of the current term.
We believe that our existing facilities are adequate to meet our current needs, and that suitable additional alternative spaces will be available in the future on commercially reasonable terms.