Single-tenant, 102,540 sq. ft. structure is one of the first office buildings in Cupertino designed to meet the city’s Green Building Program standards

Groundbreaking is slated for this April

Borelli Investment Company has announced that the 10900 North Tantau building, a headquarters-class, single-tenant, 102,540 square foot office building in the heart of Cupertino, has received all of its entitlements and been approved by the Cupertino City Council. 10900 North Tantau will be the first office building in Cupertino to meet “green”standards for the structure’s core and shell under the U.S. Green Building Council’s LEED Silver guidelines.

The building is being developed by Tantau Investments, LLC, acting as principals, made up of four partners: Ron Tate, Larry Wallerstein, John Salera, and Ralph Borelli. The voluntary “green” building effort by Tantau Investments is in keeping with the principals’ history of leadership in both environmental remediation for re-use of in-fill land, and in the growing trend of companies convinced that “green” not only saves tenants on energy costs, but also that it’s the right thing to do for the planet’s future. Groundbreaking on the two-story building is slated for April.

“We are pleased to be at the forefront of Cupertino’s pioneering effort to build more environmentally friendly office space,” said Ralph Borelli of Borelli Investment Company, which has been selected to market the building.

“We are also very excited to be able to offer a building of this stature in what has become Silicon Valley’s most desirable locale—with Cupertino having the lowest vacancy rate in the valley, currently at only three percent. Plus, with neighbors such as Agilent, Apple, HP, and the new Kaiser Hospital next door, moving into 10900 North Tantau will put a business in some pretty elite company.”

The 6.6-acre site is situated in the wellestablished Vallco Industrial Park near the intersection of North Tantau Avenue and Homestead Road—directly behind the new Kaiser Hospital. Cupertino is a very comfortable, yet relatively affordable community with great schools, city parks, and services. The building will also put employees within minutes of I-280 and Hwy 85, and a short drive from Mineta SJ International Airport, and the Vallco Fashion Park or Westfield Valley Fair shopping malls.

10900 North Tantau will provide plenty of onsite parking, with spaces for up to 400 cars if the building is used for offices and 500 cars if it’s used for medical—with a full “trips” allocation from the Cupertino planning department.“It’s virtually impossible to find space like this in Cupertino today ”Borelli noted. “This really is an uncommon opportunity.”

It’s Good to be Green

The two-story 10900 North Tantau building will have an expansive glass line around its entire exterior—including a dramatic rounded, two-story lobby atrium at its center. This will fulfill the city’s desire to create a greater sense of interactivity with its neighbors, while still using high-quality, environmentally sound glass that meets both the Leadership in Energy and Environmental Design (LEED) and California’s Title 24 energy efficiency standards.

The completed core and shell will allow for a large number of executive offices around the perimeter with exterior views. The building’s tenant will have a great deal of flexibility on how to build out the interior and what amenities to include—such as granite or marble floors in the lobby, high-speed elevators, conference rooms with advanced video and audio conferencing technology, a fitness facility and/or showers and dressing rooms in the bathrooms for joggers and bicyclers.

Most importantly, the developer’s demonstration of social consciousness by its willingness to invest in meeting the full specifications of the LEED Silver certificate under the Shell and Core program, as established by the U.S. Green Building Council, should pay significant dividends for the future tenant through reduced operating costs.“Energy costs are continuing to rise, and the environment is certainly a concern for all of us,”said John Salera, director of acquisitions for Freestone Properties, Inc., who is also marketing the building. “We’re pleased to be able to respond to Cupertino’s wish to encourage the construction of environmentally sensitive buildings, and we also know the bottom line benefits will be attractive to companies looking for a regional office or headquarters in this exclusive area.”

The architect for the 10900 North Tantau project is Sylvester R. Ramirez Associates, AIA. The general contractor is Devcon Construction, Inc. Occupancy is expected to be available in late 2008 or the first quarter of 2009.

Other Opportunities Desired

Tantau Investments is currently in the market for additional opportunities to acquire and develop similar properties as well as environmentally challenged in-fill pieces in other parts of Silicon Valley and the Bay Area. The four partners in Tantau Investments have more than 150 years of combined experience in the development business, with Larry Wallerstein of Tate Development having significant expertise in successfully developing LEED-compliant or environmentally challenged sites throughout the Bay Area. Tantau Investments’ partners include:

For further information about 10900 North Tantau or to discuss other potential acquisition or development opportunities, please contact one of the above partners.

Borelli Development Deals Span Product Types and Geographies

Slowdown? What slowdown? You’ll have to pardon the people at Borelli Investment Company if they just shrug and shake their head when talk turns to whether the residential real estate market’s troubles are extending into the commercial real estate market.

Borelli just completed its best year in history—putting together four development deals that will result in the building of major projects.

• Aster Avenue Associates—Borelli raised $10 million in one week to fund the building of a community of 80 affordable townhomes in a close-in Sunnyvale location by KB Home, one of the nation’s leading home builders. Market value when complete: $50 million
• Fontana—Borelli raised funds to sell or lease a 38,000 square foot parcel for development of a casual dining restaurant in an ideal location adjacent to a soon-to-open, 115- room Hilton Garden Inn, on a 4.5 acre parcel just off the I-10 in Fontana, in Southern California’s Inland Empire. Market value when complete: $25 million
• Club Auto Sport—Borelli has raised funds for, and is developing Club Auto Sport—Silicon Valley’s first purpose-built commercial condominium facility for cars and car enthusiasts, with additional benefits such as timesaving concierge services and an exclusive club for owners. Market value when complete: $40 million
• 10900 North Tantau—This joint venture investment fund will help develop and build a single-tenant, two-story, 102,540 square foot headquarters office building in the heart of Cupertino. (See related story.) Market value when complete: $60 million

“The four deals, when finished, will result in projects totaling approximately $175 million in market value,” said Ralph Borelli. “This was our biggest year yet at Borelli Investment Company, and it comes at a time when some people have wondered whether commercial real estate would be impacted by the negative news from the sub-prime mortgage crisis. The answer is, ‘not in our experience’.”

Playing in Different Markets One of the interesting things about Borelli’s transactions in 2007 was how the four deals spanned a diversity of product types—from housing and retail to office and specialty condominiums. In addition, the geographies where the projects are or will be built are highly diversified:

• Cupertino, an affluent bedroom community in Silicon Valley, with a handful of headquarters for elite high-tech businesses such as Apple, Agilent, and HP
• Sunnyvale, an area that has a broad mix of technology and other businesses, but clearly is in need of much more affordable housing
• North San Jose, the Golden Triangle for hightech businesses bounded by I-880 and Hwys 101 and 237
• Fontana, an emerging market with a large Kaiser medical facility, several shopping centers, distribution centers, and some residential—but drastically underserved by restaurants—in an area an hour east of downtown Los Angeles.

“I think that today’s market is very different from 10, 15, or 25 years ago,” Borelli  noted. “Success requires greater creativity. You can’t just churn out one R&D spec tilt-up after another, and expect to make money—for you or your investors. At Borelli, we remain open to any possibility that looks promising, as long as the underlying fundamentals are right.  We take a lot of care with our due diligence, but we definitely are not hesitant to embrace creativity.”

Borelli Investment Company almost always has syndication opportunities available for qualified investors, including several projects that are currently in the pipeline right now. Readers who may be interested in investing should contact Ralph Borelli at (408) 453-4700, or e-mail ralph@borelli.com.

Peterson Joins Borelli as CFO

Steve Peterson, whose career was launched at a NYC CPA firm with clients ranging from well-known Wall Street companies, to fast-rising Silicon Valley startups has joined Borelli Investment Company as Chief Financial Officer (CFO).

“We are in a period of tremendous growth companywide, driven in part by the success of our commercial condominium developments—including Club Auto Sport—as well as our large property management portfolio and land transactions,” said Buddy Parsons, president of Borelli Investment Company. “There are tremendous opportunities across the board in everything we do in commercial real estate, and Steve’s financial management experience and entrepreneurial capabilities put us in a better position to capitalize on them.”

Peterson began his career with Main Hurdman in New York, where his clients included Cablevision and Pfizer. He then worked eleven years in various senior financial management positions for Capital Cities/ABC (now owned by Disney), and was CFO of book publisher, HarperCollins of San Francisco, a division of News Corporation.

In 1996, Peterson co-launched an Internet startup that grew quickly before being acquired by a public telecom company (GST). Peterson continued with the company as VP Finance and General Manager of the Internet division for the Western U.S. Since 2001, he has successfully managed several other startups in various industries. Peterson has sold three businesses to public companies, raised more than $10 million in debt funding and $30 million in equity funding, plus successfully managed a business undergoing a bankruptcy reorganization.

“I have worked with the Borelli team in the past and like the way they run their business,” Peterson said. “It is exciting to be part of this organization at a time when there’s so much potential to build the company in special ways.”

Peterson, a CPA, holds an MBA from Golden Gate University and a Bachelor’s of Science Degree in Accounting from Villanova. He resides with his family in Danville.

Staff Spotlight: Lee Jatta

In this issue of the Insider, Borelli’s Staff Spotlight introduces you to Lee Jatta, one of the many professionals in Borelli’s property management department. Dedicated property managers like Lee ensure that each property is managed to maximize its long-term value for the owner, while promptly responding to tenant needs. Lee’s decade of experience and commitment to tenants and owners is what makes Borelli Investment Company the first choice for small to medium-sized property owners in Silicon Valley.

Tenants know they can count on Lee to get things done

Experience:

Started with Borelli Investment Company in 1995 in accounting. Moved to the property management department in 1996. Primarily supported Oakmead Terrace-a landmark office project in Sunnyvale-for many years, but has also managed other office, industrial, and retail properties in Silicon Valley.

Responsibilities:

Responds quickly and effectively when maintenance issues arise-such as plumbing, heating and air conditioning problems; burned-out lights, or tenant lock-outs. Also manages tenant improvements to meet all space requirements and conform to city codes.

Business Philosophy:

“I try to be prompt, efficient, and fair to all the parties involved. My goal is to be highly professional at all times, and courteous and conscientious in my dealings with everyone.”

Secret to Success:

“Lee is a very detail-oriented person,” said Tom Purtell, Chief Operating Officer of Borelli Investment Company. “He does not cut corners, nor miss deadlines. Tenants know they can count on Lee to get things done.”

Borelli Announces New Syndicatd Investment Opportunity

Although the nation’s housing market has cooled somewhat lately, Silicon Valley’s housing market remains strong, driven by a rapidly improving job market. Demand is particularly high for housing that is more affordable, targeted to first-time homebuyers. That’s what makes Borelli Investment Company’s new syndicated investment opportunity in affordably priced production housing in Sunnyvale so intriguing.

A Quality KB Home Townhome Community in Close-In Sunnyvale

KB Home is the largest new homebuilder in California, and one of the top five builders in the U.S. The company is planning to build a small community of 80 townhomes in an ideal close-in location near Lawrence Expressway and Monroe in the heart of Sunnyvale. The townhomes will be in close proximity to thousands of high-tech jobs, near major transportation arteries, and easy walking distance to a CalTrain station. Although actual prices have not yet been determined, the townhomes will be at the affordable end of the spectrum for Silicon Valley. With the added fuel savings due to shorter commutes, the new community should be just what many homebuyers are looking for.

Borelli Investment Company plans to raise $5 million in equity capital to participate in a joint venture with KB Home. Interested individuals will be able to invest in $100,000 shares, with a projected annual return of 12 percent over the expected 18 to 24 month holding period for the fund.

“Silicon Valley is very constrained on its housing,” said Ralph N. Borelli. “We have natural geographic boundaries that limit our expansion, and the conversion of outdated industrial properties to housing has been slowed recently by city planners, who are protecting their industrial base to take advantage of the recovering job market. As a result, demand remains very strong for this type of entry-level housing in Silicon Valley.”

All entitlements have been cleared for the KB Home community and necessary approvals have been obtained, so once the tenants have vacated the four older industrial buildings currently on the property, the project will be ready to proceed.

This is not an offer to sell, nor a solicitation of an offer to buy shares in the BIC-015, LLC-Aster Avenue Associates fund.  Investment shares in the fund are offered only in conjunction with the offering prospectus.  Please read carefully before you make any investment decision, and consult with an investment professional for advice and guidance regarding your personal financial situation.