Applied Optoelectronics, Inc. filed a Form 8-K on September 1, 2026, disclosing that the company entered into two industrial building lease agreements dated August 31, 2026, with Hightower Phase II Owner, LLC for buildings to be constructed in Houston, Texas.

Key Highlights

  • Two new leases signed: Applied Optoelectronics entered lease agreements for Building 4 (approximately 356,186 rentable square feet) and Building 5 (approximately 737,621 rentable square feet), both located on Chimney Rock Road in Houston, Texas 77053.
  • Initial monthly rents: Building 4 carries a monthly basic rent of $220,835.32 for Lease Months 1 through 12; Building 5 carries $457,325.02 for the same period, with both increasing annually through the 120-month term.
  • Aggregate security deposits of $11.3 million: $750,000 is payable upon execution, with the remaining $10.55 million due within 10 days of the applicable commencement date.
  • Purchase option included: The company holds an option to purchase both buildings together for an aggregate price of $146,570,138, subject to adjustment for post-completion square-footage variances at $134 per square foot, with any upward adjustment capped at 1%.
  • Structural modification payment: Upon execution, the company is required to pay approximately $2.55 million for structural-steel design modifications intended to accommodate possible future rooftop solar panel installation.
  • Substantial completion timeline: The landlord anticipates substantial completion approximately 16 months from the date of the leases, with rent abatement provisions if completion extends beyond 18 months and a company termination right if delivery has not occurred by 24 months.

Applied Optoelectronics Expands Houston Footprint with Phase II Industrial Leases

According to the filing, Applied Optoelectronics (NASDAQ:AAOI) entered into two separate lease agreements on August 31, 2026, with Hightower Phase II Owner, LLC, an affiliate of the landlord under the company's three previously disclosed Phase I lease agreements dated May 8, 2026. The premises are intended for "light manufacturing, warehouse and related ancillary uses," as described in the filing. Building 4 is located at 17331 Chimney Rock Road and Building 5 at 17433 Chimney Rock Road, both in Houston, Texas 77053.

The filing discloses that each lease carries an initial term of 120 full calendar months, plus any partial month from the commencement date. The commencement date under each lease will be the earliest of: the date the company begins occupying and conducting business at the premises, the date of substantial completion, or the date substantial completion would have occurred absent any tenant delay. Basic rent is payable monthly beginning on the first day of the second Lease Month, following the initial installment due upon execution, and increases annually. The company is also responsible for 100% of operating costs, taxes, and insurance costs allocated to each building.

The filing states that the leases include linked termination rights tied to the Phase I leases: the landlord may terminate the new leases if the company fails to timely exercise or complete its purchase option for Buildings 1, 2, and 3 under the Phase I leases, and the company may terminate the new leases if it terminates one or more Phase I leases under specified conditions. The purchase option for Buildings 4 and 5 must be exercised before 30 days following the earlier of substantial completion or the date substantial completion would have occurred but for tenant delay days. The form purchase and sale agreement requires earnest money of $2.0 million and a closing date no later than 45 days after the earlier of full execution or the applicable purchase-notice deadline.

What Was Disclosed

Applied Optoelectronics disclosed the execution of two industrial building leases with a combined footprint of approximately 1,093,807 rentable square feet in Houston, Texas, including rent terms, security deposit requirements, a purchase option, and linked termination provisions tied to existing Phase I leases.