Borelli’s Junction Office Center Wins BOMA Award Named Best Renovated Building of 2006 by Building Owners and  Managers Association – Silicon Valley

San Jose, Calif., October 18, 2006 — Borelli Investment Company’s Junction Office Center, a two-building, 77,000 square foot office condominium complex at 2051-2055 Junction Avenue in North San Jose, has been named Best Renovation of 2006 by the Building Owners and Managers Association (BOMA) Silicon Valley. Offering 52 units from 750 to 3,000 square feet, Junction Office Center has been another in a series of successful business condominium projects for Borelli, with more than 50 percent of the complex already sold or in escrow. Businesses can buy—not lease—space at Junction, and enjoy all the tax benefits and potential long-term appreciation usually available only to larger organizations capable of purchasing an entire building.

Originally built in 1984, the two two-story buildings set around a central courtyard had aged significantly over the years. Borelli Investment Company invested nearly $10 million in the renovation, completing a sweeping upgrade that included a new roof, sophisticated new heating and air conditioning system that offers better zone control and greater efficiency, upgraded elevators, completely redone restrooms with showers, ADA improvements, a full seismic retrofit, a new parking lot, and extensive landscaping. A new facade brought out the sweeping glasslines and saw the addition of awnings over the two entrances. The elegant lobbies feature high ceilings and polished granite floors, with a number of works of art as added touches.

“Borelli Investment Company has a distinguished reputation for the work they do in commercial real estate development and management,” said Robert Jacobvitz, executive director of BOMA Silicon Valley. “The judges were impressed with the high quality of the retrofit. Junction Office Center has a unique role as an office condominium created from old concrete tilt-up buildings. This is a very good example of Borelli’s innovative business model, and may be the wave of the future in Silicon Valley.”

Many Business Conveniences

Each of the 52 office suites is fully carpeted and includes a coffee bar with sink and cabinets. Condo owners are provided individual controls for heating and air conditioning, have separate metering for electrical usage, and enjoy high-speed web browsing and Internet access over the building’s T1 line as part of their regular association dues. Additional customizing is easy, because businesses own, not rent, the space.

All owners can use the state-of-the-art common conference room with the latest meeting support tools such as large-screen video, Web-based videoconferencing, audioconferencing, and PowerPoint capabilities.

Junction Office Center’s location in the heart of the technology-rich Golden Triangle—formed by the intersections of I-880, Hwy 101, and Hwy 237—reduces commutes and makes it easy to see clients any time of the day. The complex is close to a VTA light rail station and a short drive to Mineta San Jose International Airport. The generous parking ratio of 5.3 spaces per 1,000 square feet provides plenty of spots for employees and customers, and on-site services include UPS, FedEx, and US Postal Service drop boxes.

“We are so enthusiastic about Junction Office Center that we recently purchased several units and moved our company into 5,500 square feet of space there,” remarked Tom Purtell, chief operating officer of Borelli Investment Company. “We are pleased to have been chosen by BOMA Silicon Valley for this honor, and think this speaks to the quality and attention-to-detail owners will find at Junction. This is an office smaller businesses will want their customers to visit, again and again.”

Interested businesses can learn more about Junction Office Center by contacting Larry Bengiveno at Borelli Investment Company at (408) 453-4700 or larry@borelli.com. Businesses can also visit the web site at www.junctionofficecondos.com.

About BOMA Silicon Valley         BOMA Silicon Valley has served the commercial real estate industry for over 22 years. Founded in 1983, BOMA Silicon Valley today represents well over 75 million square feet of commercial real estate in Silicon Valley. The Association is dedicated to professional, ethical property management and provides its members with legislative advocacy, industry information, educational opportunities, and a forum for networking with peers.

Borelli Investment Company is one of the oldest commercial real estate firms in the Santa Clara Valley, with more than 50 years of experience. The company provides a full range of commercial real estate services—from development and property management to land sales and consulting for sales and leasing. More information about Borelli Investment Company’s services may be obtained by calling (408) 453-4700 or going to www.borelli.com

Contact: Buddy Parsons, President Borelli Investment Company   2051 Junction Avenue, Suite 100 San Jose, CA 95131 Ph: 408.453.4700 Fax: 408.453.4636 E-mail: info@borelli.com

http://www.borelli.com

If you are a real estate investor, here’s a question: when did you last review your real estate portfolio? Just like your stock portfolio or insurance policies, your real estate investments should receive an annual review.

Markets change, properties age, interest rates move up and down — all these factors make it a good idea to sit down with a professional and review your real estate investments regularly. In this issue of Borelli Investment Company’s Commercial Real Estate Insider, we provide four tips for your next review.

“It just makes good sense to do a comprehensive review of your real estate investments, from time to time,” explained Ralph N. Borelli, chief executive officer of Borelli Investment Company. “This will better enable you to decide whether to stand pat, or reposition or redeploy any of your invested capital.”

Tips for a Successful Real Estate Investment Review

• Learn the ABCs about ROE
• Estimate projected income going forward
• Evaluate capitalization rates
• Go beyond the numbers

The ABCs of ROE

The first thing you should do is analyze your return on equity (ROE) on an annual basis. This is really the return on imputed equity—based on the expected sales price of a property, less debt and closing costs. By dividing your current cash flow by the imputed equity you have in a property, you can calculate your current ROE.

“Many people will hold a property for years, never realizing that the annual ROE is two or three percent,” Borelli explained. “Holding a property for another year is a little like buying it again; there are other investment opportunities for that money. So, if you’re aware of what your return is, you can make better decisions.”

Crystal Ball Gazing – With Help

The next step involves evaluating a property’s rent prospects going forward, over perhaps one to five years. This type of crystal ball gazing is best done with the help of a real estate investment professional you trust.

“If you anticipate that rents will rise or fall—driving your ROE higher or lower—this could impact your decision of whether to hold or sell a property,” commented Borelli. “Looking ahead is critical, because it helps to stay ahead of the herd when buying or selling.”

Other important considerations include whether major capital expenditures will be required for roofs, mechanical systems, structural improvements, parking lots, or similar upgrades. In addition, lease roll-over exposure can significantly impact your operating cash flow.

Calculating the Cap Rate

Step three in a detailed analysis involves computing the capitalization (cap) rate, another measure of value in real estate investments. The cap rate is calculated by dividing a property’s annual net operating income over its projected sales price.

While it was common a few years ago for cap rates to be 8.5 to 9.0 percent, those rates have declined recently as investors appear willing to pay more to buy properties producing less net operating income. The cap rate can be very helpful in gauging the appetite of buyers before deciding whether to sell or hold a property.

Going Beyond the Numbers

The final step in analyzing your real estate investments has nothing to do with numbers. Instead, it has everything to do with you and your life objectives and circumstances. Sometimes, a decision to sell may be driven by estate planning needs, or gifting desires. You may simply be at a point where you want to slow down a bit, and reduce your risk, or the opposite—where you are willing to assume more risk in hopes of earning a higher return. Or, you may simply decide it’s time to do something else with your money. Any of these reasons could be valid considerations in reviewing your real estate portfolio.

“At Borelli Investment Company, we work with many clients to help them review their holdings as needed,” Borelli said. “A regular review of your investments will help ensure that your portfolio keeps working hard for you, through up and down cycles year after year.”

Fall has arrived, and with it, the certainty that the end of another year can’t be far away. If you’re like most people, you know you should be doing tax planning to reduce your tax liability if possible, but you’re not sure where to start.

“One of the best deductions available today is for purchases of business real estate,” said Buddy R. Parsons, president of Borelli Investment Company. “And there’s no easier way for companies and professional firms of all sizes to invest in real estate than by buying their own business condominium.”

Borelli Investment Company is a leader in business condominiums, with a wide range of office condos of all sizes at Junction Office Center and AirTech Office Condominiums in San Jose. With a down payment of as little as $36,500, companies can own rather than lease space and gain a number of significant financial benefits, which include:

IRC Section 179 Deduction

This section of the tax code allows business owners to deduct up to $108,000 from company profits for a business asset in the first year it’s placed into service—whether that asset is computer equipment or an office condominium. One way to take advantage of the Section 179 deduction is to use an accounting method called cost segregation. This is the process of identifying and segregating building components by their true useful lives—5, 7, 15, or 39 years—for accelerated depreciation. Under Section 179, you can deduct the cost of certain classes of assets against taxable income in the first year—up to the $108,000 maximum.

And here’s the best part. For a Section 179 deduction (you can also read about Section 179 from the IRS website) all you have to do is place the asset in service before the end of the year, and you qualify for a full-year deduction. That makes closing a transaction on a business condominium in the coming weeks one of the best things you can do to reduce your taxes!

Additional Benefits of Cost segregation

In addition to supporting IRC Section 179 deductions, cost segregation enables you to depreciate the portion of a building’s costs that support personal property or are directly related to your business activities over much shorter lifetimes than the standard 39 years for commercial property.

Accelerating the depreciation of a substantial portion of your office condominium’s value can significantly increase your write-offs in the early years, generating considerable upfront savings. This savings—plus the Section 179 deductions—has reduced the effective out-of-pocket costs for the down payment for many buyers to nearly zero. Imagine purchasing a business condominium with no net out-of-pocket costs!

Businesses also can deduct loan interest and other typical costs of doing business from their taxes.

Long-term appreciation

Owning your business property also lets you enjoy the expected appreciation over time that has long been associated with prime real estate in Silicon Valley. An office condominium gives you a much more affordable way to “get in” and start enjoying the benefits of business property ownership.

For more information about how tax and other financial opportunities apply at Borelli Investment Company’s Junction Office Center and AirTech Office Condominiums, contact Larry Bengiveno at (408) 453-4700 or larry@borelli.com. Be sure to check with your CPA about how specific benefits will impact your personal financial situation before buying.

Borelli Investment Company Relocates to Junction Office Center

Buying into Business Condominiums Benefits

How do you know if a real estate firm is giving you a straight story? When it follows its own advice! For several years, Borelli Investment Company has been extolling the benefits of property ownership through business condominiums. In mid-September, the company became one of the many satisfied owners at the 2006 BOMA award-winning Junction Office Center—relocating to the ground floor of the two-story building at 2051 Junction Avenue, Suite 100, near Brokaw Road in San Jose.

“We no longer owned or managed the building we had occupied for a number of years on Technology Drive in San Jose,” said Buddy R. Parsons, president of Borelli Investment Company. “We realized Junction Office Center provided the perfect answer. It’s in a great location. The space is first class, so it will project a highly professional image to our clients. And, as owners, we’ll get all of the benefits we’ve talked about since we began selling business condominiums: tax advantages, including special tax credits, equity growth, potential appreciation, and more.”

5,500 Square Feet in Offices

Borelli Investment Company occupies approximately 5,500 square feet, about the same amount of space it had been using at its Technology Drive offices. In addition to its own space, company employees will enjoy access to amenities such as large common conference rooms with the latest video and other high-technology equipment, showers in the brand new multi-stalled restrooms, high-speed Internet service, the latest heating and air conditioning systems for a comfortable work environment year-round, and new elevators. Other improvements as part of Junction’s $10 million renovation include ADA accommodations, extensive landscaping, and a new roof.

Borelli clients will enjoy plenty of convenient parking, right at the door. The two-building office center is located in the heart of the famous Golden Triangle, formed by the intersections of I-880, Hwy 101, and Hwy 237. This will make for easy commutes by car—with light rail only a few blocks away.

“We really do believe that business condominiums make absolute sense for companies of any size—including ours,” Parsons explained. “When we got the opportunity to ‘put our money where our mouth is’, so to speak—we made the move.”

Junction Office Center offers a total of 52 office condos in the two, two-story buildings set around a central courtyard. More than 50 percent of the project is already sold or in escrow. For more information, contact Larry Bengiveno or call (408) 453-4700. Interested parties can click on the Junction logo at the bottom of this page.

 Borelli Investment Company brokers challenging land transaction involving
three parcels near Cochrane Road and Highway 101

San Jose, Calif., August 14, 2006 — Following the successful completion of 2 1/2 years of negotiations to assemble 66 acres of land in Morgan Hill, ground has been broken on Miramonte Center, a 660,000 square foot complex that will be the largest shopping center in the city’s history. The upscale “lifestyle” center located on Cochrane Road on the east side of Highway 101 will be anchored by Target and complemented by a wide variety of other retail establishments and restaurants—all connected by pedestrian features such as tree-lined walkways and courtyards.

“We wanted to bring theSouthValleysomething unique—unlike large indoor malls and typical shopping center,” said John B. DiNapoli, vice president of JP DiNapoli Companies, Inc., co-developers of the complex with Browman Development Company. “MiramonteCenteroffersSouthValleyresidents a shopping experience they won’t find anywhere else.”

Putting the Parcels Together

Before ground could be broken onMiramonteCenter, years of behind-the-scenes spadework was required to put the various parcels together to create a large enough piece of land to develop. While the formal negotiations leading to the assembly of the 66-acre parcel took 2 1/2 years, a number of other attempts to do something with the land had been made over the years.

“One parcel had been owned by the prominent Morgan Hill Guglielmo winemaking family for more than 80 years,” said Ralph Borelli, CEO of Borelli Investment Company. “Brokers had unsuccessfully talked to the Guglielmo’s about office and residential developments in the past. Another parcel had multiple owners with varying interests and concerns. Finding the right terms to ensure the transaction was acceptable to all the landowners and the developers, and would also meet the city’s general plan provisions, was not easy.”

One advantage that Borelli Investment Company had was its long history in theSanta ClaraValleycommercial real estate market. Started by Ralph’s father Nelo, Borelli Investment is in its 51st year of serving the Valley. The mutual trust established between Ralph and the Guglielmo family served as a cornerstone for building an agreement that everyone was satisfied with.

In addition, Borelli Investment Company has considerable experience working on complicated transactions involving negotiations with other brokers, joint venture partners, zoning and entitlement issues, Environmental Impact Reports (EIRs), and long timeframes.

“Very few land transactions in theSanta ClaraValleyare simple,” Borelli commented. “Our firm has extensive experience handling complex transactions, some of which have taken a decade or more to complete. We actually enjoy the challenges, especially when they lead to a development that is as exciting asMiramonteCenter.”

Contemporary Design

MiramonteCenterfeatures a contemporary, art deco design that should be extremely well received. The buildings will be very colorful, washed in bright earth tones that fit well with the surrounding hills and valley floor. Shoppers will enter offCochrane Roadby driving up a main boulevard that runs between the buildings, which will also be connected by pedestrian walkways linking courtyard-like gathering places.

In addition to the Super Target anchor store, the developers expect to sign one other “big box” anchor and a wide selection of specialty stores.

MiramonteCenteris projected to have a $100 million value at build-out. The center should open in the summer of 2007, barring complications. In addition to developers JP DiNapoli Companies, Inc. and Browman Development Company, the Guglielmo Family Partnership and Morgan Hill Ventures I, LP are acting as joint venture partners. Devcon will be the general contractor for the project.

“Morgan Hillhas needed its own high-profile, lifestyle center for many years,” noted Borelli. “We were pleased to be able to play an important role in helping to make this possible.”

Celebrating more than 50 years in business in the Santa Clara Valley, Borelli Investment Company is one of the oldest commercial real estate firms in Northern California. The company provides a full range of commercial real estate services—from development and construction management to land sales and consulting for sales and leasing. More information about Borelli Investment Company’s services may be obtained by calling (408) 453-4700 or visiting www.borelli.com.

Contact:
Ralph Borelli, CEO
Borelli Investment Company
1770 Technology Dr.
San Jose, CA 95110
Ph: 408.453.4700
Fax: 408.453.4636
E-mail: ralph@borelli.com
http://www.borelli.com