| Item 1.01. | Entry into a Material Definitive Agreement. |
On January 22, 2024, Sage Therapeutics, Inc. (the “Company”) entered into a lease agreement (the “Lease”) with 55 Cambridge Parkway, LLC, a Delaware limited liability company (the “Landlord”), pursuant to which the Company will lease approximately 30,567 square feet of office space located at 55 Cambridge Parkway, Cambridge, Massachusetts (the “Premises”). The Company intends to relocate its corporate headquarters to the Premises upon the expiration on August 31, 2024 of (i) the lease of 63,017 square feet of office space for the Company’s current headquarters at 215 First Street, Cambridge, Massachusetts; and (ii) the lease of 40,419 square feet of additional office space at 245 First Street, Cambridge, Massachusetts, each in accordance with its terms.
The term of the Lease will commence on the later of (1) September 1, 2024, or (2) the date on which the improvements to the Premises are, or are deemed to be, substantially completed (the “Commencement Date”). The Company’s obligation for the payment of rent for the Premises begins six months after the Commencement Date (the “Rent Commencement Date”). The Lease has an initial term of sixty-six months, measured from the Commencement Date (the “Term”). The monthly base rent due under the Lease initially shall be $224,158 per month for the first year following the Rent Commencement Date and is scheduled to increase by approximately 3% per annum for each subsequent year of the Term. The Company has the option to extend the Lease one time for an additional five-year period, subject to the terms therein. The Lease also provides for a construction allowance (the “Allowance”) not to exceed approximately $3.4 million to be applied to the construction costs of the Premises. The Allowance must be used on or before the one-year anniversary of the Commencement Date or will be deemed forfeited with no further obligation by the Landlord.
In connection with its entry into the Lease and as a security deposit, the Company has provided the Landlord a letter of credit in the amount of approximately $1.4 million, which the Company and the Landlord have agreed may be reduced to approximately $1.2 million following the third anniversary of the Rent Commencement Date, provided that no event of default by the Company has occurred. The Landlord has the right to terminate the Lease upon customary events of default.
The foregoing summary of the Lease is qualified in its entirety by reference to the full text of the Lease, a copy of which the Company intends to file with the Securities and Exchange Commission as an exhibit to the Company’s Quarterly Report on Form 10-Q for the quarter ending March 31, 2024.
| Item 2.03. | Creation of a Direct Financial Obligation or an Obligation under an Off-Balance Sheet Arrangement of Registrant. |
The information set forth above in Item 1.01 of this Current Report on Form 8-K regarding the letter of credit is incorporated into this Item 2.03 by reference.
