In 2021, when SolarEdge (Nasdaq: SEDG) was at its peak, it signed a massive deal with the Azrieli Group (TASE: AZRG) to build and lease an office campus near Cinema City at the Glilot Junction, where Tel Aviv, Herzliya and Ramat Hasharon meet. Now, as the company struggles with its business and is reportedly on the verge of further downsizing, the question is, what will happen to the massive campus, which is scheduled to be ready for occupancy in 2025?
The under-construction campus for SolarEdge, which develops systems to maximize energy production from solar installations and related products, is located north of the Cinema City complex and east of the Big Glilot site under construction nearby. The SolarEdge site is 16.5 acres (4.125 acres). The 43,000-square-meter campus will feature five levels of underground parking. Permits for excavation and lining were obtained in June 2022, and a full building permit for the entire project was obtained in October 2023.
In the latest report by the Azrieli Group on the acquisition of the project site and the agreement with SolarEdge, it was stated that the total cost of the project, including the land, is estimated at approximately NIS 990 million, and that the annual net operating income from leasing the project is estimated at NIS 78 million. The lease agreement extends for fifteen years, with an option to extend it to 24 years and eleven months, from the date of delivery.
Under the agreement, SolarEdge will be responsible for managing and maintaining the campus. The company may try to find subtenants to cover its costs, as Wix.com (NASDAQ: WIX) has done for its campus, which is also located near the Glilot intersection (south of Cinema City).
SolarEdge declined to comment on the report.
SolarEdge has a production facility in the Tziporit Industrial Park, while its headquarters are in Herzliya Pituach. The factory in Tziporit is called Sella 1, after the company’s founder and former CEO, the late Guy Sella, who passed away in 2019. Sella 2 is located in South Korea, where SolarEdge acquired a company a few years ago. In addition, the company has sites it leases in the United States, various countries in Europe and Asia, and Australia.
Before the previous round of layoffs in January this year, SolarEdge employed 5,633 people, 3,160 of whom were in Israel. In January, it laid off 900 employees, 500 of whom were in Israel. The move was interpreted as an attempt to adapt the company’s cost structure to changing market conditions and return to profitable growth. The company estimated that the layoffs would save $75-80 million a quarter. However, SolarEdge’s business has continued to be difficult in the months since the layoffs.
This article was published in Globes, Israeli Business News – en.globes.co.il – on July 15, 2024.
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