Alector, Inc. Leases Disclosure
7. Leases
In June 2018, the Company signed a lease agreement to lease approximately 105,000 square feet in office and laboratory space in South San Francisco which serves as the Company’s headquarters (the Headquarters). The lease expires in 2029 with an option to renew for a period of ten years. The landlord paid for $15.7 million of tenant improvements. In connection with the lease, the Company entered into a letter of credit arrangement in the amount of $1.5 million as collateral for the lease, which is classified as restricted cash on the consolidated balance sheets. In October 2020, the Company signed a lease agreement to lease approximately 18,700 square feet of office and laboratory space in Newark, California. The lease term ends on February 6, 2028 with an option to extend for an additional five years. The landlord is obligated to pay for up to $0.4 million of tenant improvements. The measurement of the lease liabilities for the leases excludes the options to extend the term of the lease as such extensions are not reasonably certain to occur. Variable lease costs for all of the Company’s leases consist of operating expenses for the spaces.
In October 2023, the Company entered into an agreement to sublease approximately 13,250 square feet of the Headquarters. This sublease expired in November 2024.
In February 2023, the Company entered into an agreement to sublease approximately 9,300 square feet of the Headquarters. This sublease expired in July 2025. The sublessee paid its proportionate share of operating expenses for the space.
In August 2024, the Company approved a plan to transition operations from its laboratory and office space in Newark, California to its South San Francisco headquarters. The Company recorded an impairment loss of $1.1 million and $2.2 million in general and administrative expenses to write-down the right-of-use asset and the leasehold improvements for the year ended December 31, 2025 and 2024.
In February 2025, the Company entered into an agreement to sublease approximately 13,000 square feet of the Headquarters. In August 2025, the subleased area was expanded to approximately 15,200 square feet. This sublease will expire in March 2029, and the sublessee pays its proportionate share of operating expenses for the space.
In December 2025, the Company entered into an agreement to sublease approximately 7,700 square feet of the Headquarters. This sublease will expire in July 2027.
For the year ended December 31, 2025, the Company recorded an impairment loss of $1.8 million related to the subleased space at its Headquarters, which was included in general and administrative expenses, to write-down the associated right-of-use asset and the leasehold improvements.
The components of lease expense were as follows:
|
|
December 31, |
|
|||||
|
|
2025 |
|
|
2024 |
|
||
|
|
(In thousands) |
|
|||||
Operating lease cost |
|
$ |
6,499 |
|
|
$ |
6,494 |
|
Variable lease cost |
|
|
3,674 |
|
|
|
3,410 |
|
Sublease income and reimbursement of variable lease cost |
|
|
(1,182 |
) |
|
|
(2,444 |
) |
Total |
|
$ |
8,991 |
|
|
$ |
7,460 |
|
As of December 31, 2025, the weighted-average remaining lease term for operating leases was 3.2 years and the weighted-average discount rate was 8.6%. Cash paid for amounts included in the measurement of lease liabilities for
the year ended December 31, 2025 and 2024 was $9.0 million and $8.7 million, respectively, was included in net cash used in operating activities in our consolidated statements of cash flows.
The following are the lease payments owed under the Company’s operating leases as of December 31, 2025:
|
|
(In thousands) |
|
|
2026 |
|
$ |
9,477 |
|
2027 |
|
|
9,804 |
|
2028 |
|
|
8,969 |
|
2029 |
|
|
2,209 |
|
Total undiscounted lease payments |
|
|
30,459 |
|
Less: Present value adjustment |
|
|
(3,915 |
) |
Total lease liability |
|
$ |
26,544 |
|
Historical Timeline
| Fiscal Year | Filed | |
|---|---|---|
| 2025 | Feb 25, 2026 | Showing above |
| 2024 | Feb 26, 2025 | |
| 2023 | Feb 27, 2024 | |
| 2022 | Feb 28, 2023 | |
| 2021 | Feb 24, 2022 | |
| 2020 | Feb 25, 2021 | |
| 2019 | Mar 24, 2020 | |
About Leases Disclosures
Lease disclosures under ASC 842 provide a comprehensive view of a company's leased asset portfolio, including the split between operating and finance leases, discount rates used to present-value future payments, and the maturity schedule of lease obligations. This section reveals a significant source of off-balance-sheet commitments that were largely hidden before the current standard.
Key signals: the weighted-average discount rate affects the size of recorded lease liabilities — a higher rate reduces the reported obligation, so compare the chosen rate against the company's incremental borrowing rate. The operating versus finance lease mix affects both EBITDA and operating income presentation. Watch the maturity table for concentration risk: large payment cliffs in specific years may create cash flow pressure. Variable lease payments excluded from the liability measurement represent real obligations that do not appear on the balance sheet. Compare total lease costs against prior-year operating lease expense to assess the true economic burden.