Item 2. Properties
Item 2. Properties
New San Carlos Headquarters Lease
On November 15, 2024, we entered into a sublease agreement, or the New Headquarters Lease, with a third party for Suite 100 in an existing building located at 825 Industrial Road, San Carlos, California, or the Building. Under the New Headquarters Lease, we will lease approximately 16,731 rentable square feet of space in the Building. The New Headquarters Lease is for a term of 24 months and commenced on December 12, 2024. The New Headquarters Lease includes two options to extend the term of the lease for 12 months each, exercisable under certain conditions and at a rate increased by 3% from the applicable monthly base rent as described in the New Headquarters Lease. Beginning on the commencement date, our monthly base rent under the New Headquarters Lease will be $0.1 million during the term. We are also responsible for paying operating expenses such as common area maintenance.
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San Carlos Headquarters Lease
On February 8, 2021, we entered into a lease agreement, or the Headquarters Lease, for laboratories and offices to be constructed in Suite 400 of the Building. Under the Headquarters Lease, we leased approximately 49,918 rentable square feet of space in the Building that served as the premises for our headquarters. The Headquarters Lease, which commenced in January 2022, had an initial term of 120 months and included 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 Headquarters Lease.
Commencing 210 days after the rent commencement date as the result of a rent abatement, our monthly base rent under the Headquarters Lease was approximately $0.3 million, subject to an annual increase of 3%. We were also responsible for paying operating expenses such as common area maintenance.
Minimum rental payments under the Headquarters Lease totaled $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.
On November 15, 2024, the Company entered into an Agreement for Termination of Lease and Voluntary Surrender of Premises with the Landlord, or the Termination Agreement, in connection with the termination of that certain Lease Agreement, dated as of February 8, 2021, with the Landlord, or the Prior Headquarters Lease, of Suite 400 of the Building, or the Prior Premises. Pursuant to the Termination Agreement, the Company and the Landlord agreed to terminate the Prior Headquarters Lease effective as of the earlier of (i) the date the Company vacates and surrenders the Prior Premises in accordance with all the conditions and requirements set forth in the Prior Headquarters Lease; or (ii) 11:59 p.m. Pacific Time on December 31, 2024.
In connection with the termination of the Prior Headquarters Lease, the Company agreed to surrender the Prior Premises and pay a lease modification payment to the Landlord upon mutual execution of the Termination Agreement.
The Prior Headquarters Lease termination is related to continued efforts by the Company to identify cost reduction opportunities. Concurrently with the termination of the Prior Headquarters Lease and the effectiveness of the Termination Agreement, the Company intends to relocate its offices to the Premises, with significantly reduced square footage and ongoing operating costs.
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
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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 premises, 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%.
American National Red Cross Lease
On February 1, 2022, we entered into an agreement to lease approximately 4,500 square feet of rentable area located in Pennsylvania, consisting of laboratories, clean room and office space, for a three-year term at a rate of approximately $17,000 a month subject to an annual increase of 2.5%.
Netherlands Office Lease
On July 28, 2023, we entered into an agreement to lease satellite office space in Amsterdam, Netherlands for a twelve-month term at a rate of approximately €5,400 per month, which was renewed in 2024 to extend the lease term through July 28, 2025. 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.