5. Commitments and contingencies On June 3, 2013, the Company entered into a new nine-year building lease for approximately 43,600 square feet of space in Cambridge, Massachusetts, commencing on the earlier of the substantial completion of the build-out work or January 1, 2014. The lease has monthly lease payments of $209 the first 12 months with annual rent escalations thereafter and provides a rent abatement of $209 per month for the first six months. The Company has the option to extend this lease by an additional five years. As the Company obtained access to the newly leased space on July 22, 2013 in order to begin the build-out, this is considered the lease commencement date for accounting purposes, thus rent expense began on this date and will be recognized on a straight-line basis over the term of the lease. In addition, the lease provides a contribution from the landlord towards the initial build-out of the space of up to $6,538. The Company capitalizes the leasehold improvements as property and equipment and records the landlord incentive payments received as deferred rent and amortizes these amounts as reductions to rent expense over the lease term. The total operating lease obligation of the non-cancelable lease term of this agreement is $24,209. Future minimum annual lease payments as of September 30, 2013, under this non-cancelable operating lease through the end of the lease term are as follow: $1,253 in 2014; $2,582 in 2015; $2,659 in 2016; $2,739 in 2017; $2,821 in 2018; and $12,155 in the aggregate thereafter. In accordance with the lease, the Company entered into a cash-collateralized irrevocable standby letter of credit in the amount of $1,253, naming the landlord as beneficiary. This letter of credit is reduced to $1,044, $835, and $627 upon the rent commencement date and the first and second anniversaries of the rent commencement date, respectively. The Company s current building lease in Cambridge, Massachusetts, expires on March 31, 2015. The Company plans to relocate to its new facility pr