SUNNYVALE, Calif. – GSI Technology , Inc. (NASDAQ: NASDAQ:GSIT), a provider of semiconductor memory solutions, has agreed to sell its headquarters for $11.85 million in cash. The property, located at 1213 Elko Drive in Sunnyvale, California, comprises approximately 44,277 square feet of industrial and office space.
The purchase and sale agreement with D.R. Stephens & Company, LLC, was executed on Monday, April 2, 2024, and includes standard terms such as representations, warranties, and covenants. The agreement allows the purchaser a 45-day diligence period during which they can terminate the agreement for any reason and receive a refund of their $250,000 deposit.
Should the purchaser cancel the agreement after this period but before the closing, the deposit becomes non-refundable, unless the termination is due to GSI Technology's default.
Upon the sale's completion, GSI Technology will lease back the entire property for an initial term of ten years, ensuring the continuity of its operations without interruption. The company retains the option to extend the lease for two additional five-year terms.
The initial base rent is set at approximately $90,768 per month, with a 3% annual increase starting from the first anniversary of the closing date. GSI Technology will also be responsible for operational expenses including maintenance, insurance, property taxes, and utilities.
This strategic move allows GSI Technology to unlock the value of its real estate assets while maintaining its operational base in Sunnyvale. The transaction is detailed in the SEC filing, with the full terms of the sale and subsequent lease agreement available for review in the exhibits attached to the filing.
The information provided is based on GSI Technology's SEC filing.
InvestingPro Insights
In the wake of GSI Technology's recent real estate transaction, insights from InvestingPro provide a broader financial context for the company. According to real-time metrics, GSI Technology has a market capitalization of $116.86 million, reflecting the company's valuation in the eyes of investors. Despite a challenging revenue growth rate, which has seen a decrease of 33.43% over the last twelve months as of Q3 2024, GSI Technology has managed significant returns in the stock market. Specifically, the company's stock has seen a one-month price total return of 28.33% and an even more impressive three-month price total return of 81.18%.
From an operational perspective, GSI Technology is facing some headwinds, as evidenced by an operating income margin of -98.98% over the same period, which points to challenges in converting revenues to operating income. However, an InvestingPro Tip highlights that the company holds more cash than debt on its balance sheet, which provides a degree of financial flexibility. Additionally, the company's liquid assets exceed short-term obligations, further indicating a stable liquidity position.
For investors interested in the semiconductor memory solutions sector, GSI Technology's recent stock performance and balance sheet strength are noteworthy. There are additional InvestingPro Tips available, including insights into the company's valuation, price volatility, and dividend policy. For those looking to delve deeper into GSI Technology's financials and stock performance, InvestingPro offers a comprehensive suite of tools and analytics. To access these additional tips and make the most of the InvestingPro platform, use coupon code PRONEWS24 to get an additional 10% off a yearly or biyearly Pro and Pro+ subscription.
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