Ralph N. Borelli Chosen as CoStar Broker of the Year

CoStar Group names Borelli as 2005 Power Broker of the Year based on transactions representing 500 acres and more than $136 million in total value

San Jose, California, April 24, 2006 — It takes a special skill set to broker land transactions in densely populated, land-scarce Northern California . According to CoStar Group, Inc., a leading provider of information services to commercial real estate professionals, Ralph N. Borelli, president and CEO of Borelli Investment Company, has what it takes. Borelli has been chosen as a CoStar Power Broker regional winner for 2005 based on his completion of ten land transactions totaling nearly 504 acres and valued at $136.1 million — virtually all of that in the San Francisco Bay Area.

“It’s very flattering to be honored by an organization such as CoStar, which supplies critical information to brokers and developers throughout the U.S. and U.K.,” said Borelli, president and CEO of Borelli Investment Company.  “We specialize in putting together often complex land transactions for residential developers interested in providing much needed housing in the Bay Area.  It’s not uncommon for one of our land transactions to involve extensive entitlement work to obtain the permits and approvals necessary for a project to proceed.  Our considerable experience with land deals over the past five decades gives us an advantage on these kinds of challenging deals.”

One of Borelli’s most significant land transactions in 2005 was his brokering nearly 50 acres of surplus property owned by Santa Clara County near the Elmwood correctional facilities in Milpitas.  The county had originally purchased approximately 100 acres of farmland in 1884.  The Elmwood facilities were constructed in the 1960s, with the surplus land kept for future expansion.  When the county decided to sell the property, Borelli Investment Company worked closely with the three parties involved-Santa Clara County, the City of Milpitas (and its Redevelopment Agency) and the eventual buyer, KB Home—to broker a transaction that was a win for everyone.

KB Home will construct 800 single-family homes, townhomes, and condominiums on the site.  In the meantime, the county will retain long-term leases on a portion of the property that will be occupied by automobile dealerships.  And the City of Milpitas will benefit from the significant boost in tax revenues.

Among Borelli’s other noteworthy land transactions in 2005 were:

• A 360-acre parcel in Oakley, purchased by KB Home to combine with an adjacent property for a large, master-planned new home community.  Because of a short escrow and significant entitlement work that needed to be done, Borelli Investment Company arranged for a short-term, land-development joint-venture partner.  This allowed the escrow to close as scheduled without violating KB Home’s corporate guidelines against purchasing property with unresolved entitlement issues.
• A ten-acre portion of the old Hacienda Gardens Shopping Center on Meridian at Foxworthy in San Jose, which well-known homebuilder Toll Brothers will use to build a 200-unit luxury townhome complex called Willow Glen Place.  Using a structured, orderly distribution process, Borelli Investment Company was able to significantly increase the value for the seller, while maintaining a fair market price for the buyer.
• The sale of almost 30 acres of land from the Guglielmo Winery in Morgan Hill to a well-respected local commercial developer.
• The repositioning and sale of a former 18-acre storage yard for Union Pacific Railroad on East Williams Street in San Jose to KB Home for a new home development.  Facing significant environmental work before the property could be sold, Borelli Investment Company helped find a company to guarantee the cost of the clean-up – mitigating the risk for the buyer, and allowing the sale to proceed.

The CoStar Group Power Broker awards (scroll to the bottom of their page), which are co-sponsored by Real Estate Forum magazine, recognize the top brokers in more than 45 major markets across the U.S. and the U.K.  Brokers are selected based upon information on billions of dollars in lease and sales transactions, which are tracked in the firm’s comprehensive brokerage database.

“Our expertise in land sales is something we take great pride in,” Borelli remarked.  “We go beyond what the typical real estate broker does, drawing upon our extensive experience to bring transactions to a successful conclusion for all parties.  This award helps to further validate the uniqueness of our offerings to land owners and residential developers.”

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 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

Ralph N. Borelli Named Land Broker of the Year — Again

Borelli follows 2004 ASVB honor by closing seven transactions representing 117 acres and more than $118 million in total value, earning him his second consecutive win.

San Jose, Calif., March 29, 2006 — Ralph N. Borelli, president and CEO of Borelli Investment Company, has been named the 2005 Land Broker of the Year by the Association of Silicon Valley Brokers (ASVB).  Borelli, who was also the 2004 ASVB Land Broker of the Year, closed seven land transactions in Silicon Valley in 2005, totaling nearly 117 acres and valued at $118.7 million.  This earned Borelli the 2005 ASVB honor in a landslide, putting him at nearly four times the value of his nearest rival.

One of Borelli’s most significant land transactions in 2005 was his brokering of surplus property owned by Santa Clara County near the Elmwood correctional facilities in Milpitas.  The nearly 50-acre parcel had been held by the county for possible expansion of the jail for many years.  Facing a significant budget shortfall in 2002, the county made the decision to sell.  Borelli Investment Company helped bring all the parties together – Santa Clara County, the City of Milpitas and its Redevelopment Agency, and winning homebuilder KB Home.  The property will support nearly 800 single family homes, townhomes, and condominiums from KB Home, worth approximately $500 million at build-out.  In addition, the county has retained a long-term ground lease on part of the property, which will support three large automobile dealerships – generating a substantial amount of lease revenue for the county and sales tax revenue for Milpitas.

“I’m very honored to receive this award from the ASVB for the second year in a row,” said Borelli, president and CEO of Borelli Investment Company.  “I’ve always enjoyed the creativity required to complete land transactions in Silicon Valley.  A lot of parcels have multiple owners or need repositioning or entitlement work before a deal can be closed.  We have always made land sales an integral part of our business, giving us valuable experience in completing complex deals.”

Borelli’s other noteworthy land transactions in 2005 included: a ten-acre section of the old Hacienda Gardens Shopping Center on Meridian at Foxworthy in San Jose, which Toll Brothers will use to build a 200-unit luxury townhome complex called Willow Glen Place; the sale and joint venture development of approximately 66 acres of land from the Guglielmo Winery in Morgan Hill to create the largest retail complex in Morgan Hill – with 700,000 square feet of space; and the repositioning and sale of a former 18-acre storage yard for Union Pacific Railroad on East Williams Street in San Jose to KB Home for a new home development.

“Land brokerage is one of the specialties of our firm,” Borelli noted.  “With so little vacant land in Silicon Valley, we enjoy the unique challenges each transaction presents.  And we don’t mind ‘getting our hands dirty’ to bring the buyer and seller together and obtain a good deal for each party.”

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 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

Office Condos Tap a Diverse Market

Ownership brings sense of security, flexibility in achieving firm’s goals

By Jon Ann Steinmetz, San Jose Mercury News, February 28, 2006

When the Ringwood Business Center started construction in 2004, the developers quickly discovered their location was even better than they realized.

“It was right smack dab in the right community — a highly populated Asian community in the Berryessa area,” said Larry Bengiveno, vice president of development for Borelli Investment.

The project of commercial condominiums — small office spaces that business owners can buy rather than rent — generated so much interest that the company started marketing to Asian buyers in Chinese-language newspapers. CEO Ralph Borelli has been a guest on Chinese radio and TV real estate shows.

“We’re tapping into that market as best we can,” Bengiveno said. “It’s very important to locate in an area where they want to be — they are the buyers. And you could be five blocks off and it could affect your sales.”

Local office condo buyers are a diverse bunch in general. According to TMC Development, which arranges federal loans for small businesses, more than half of Bay Area office condo buyers since January 2001 have been classified as members of minority groups.

Sixty percent of the owners at Borelli Investment’s four San Jose office condo complexes are Latino, Indian or other Asian-American. At Venture Corp.’s Venture Commerce Center in South San Jose, 42 percent of the 28 buyers are non-white; another Venture property in Newark is 100 percent Asian- and Indian-owned. Businesses include real estate, financial planning, construction, engineering and law offices.

Owning vs. leasing

Commercial condominiums accounted for all of Silicon Valley’s new office construction in 2005 — 348,000 square feet, according to brokerage NAI BT Commercial. Condo units, typically 750 to 3,500 square feet, allow small-business owners to buy their own space rather than lease, an option that has been popular with interest rates near historic lows. Many purchases are financed through Small Business Administration loans with 10 percent down.

Most businesses lease their space, and ownership is a relatively new phenomenon. Several complexes — some new construction, others converted vacant buildings — have opened in the past year in the South Bay, mostly in San Jose. Last month, Keenan Lovewell Ventures opened The Vineyard, a 35-unit complex in Mountain View.

Besides tapping into a growing demand for small office space, Borelli and other developers are benefiting from Silicon Valley’s diverse population of entrepreneurs.

“The Chinese always believe in land,” said broker Tenny Tsai of NAI BT Commercial, who works with many Asian clients. “Condos don’t really have land, but we feel if everything else fails, we still have the building; we still have the soil. You can control your own destiny.”

For some entrepreneurs, it’s a nuts-and-bolts matter based on finances and personal preference.

“It makes more sense to own rather than to lease, and it makes more business sense to have an asset vs. purely a liability,” said real estate broker Bernice Johnson McHenry of Simply Success, who is a member of the National Coalition of 100 Black Women. She and business partner Carla Hudson moved into their office at the Venture Commerce Center in October.

Fred Wikkeling, who owns Exit Strategy Realty with his wife, Jeannette Williams, agreed. “It’s an opportunity to have your own rather than renting from someone else,” he said. “I’m not sure why it’s mostly minority, but everyone I talk to as owners saw it as an opportunity to own.

Raj Budwal, a financial adviser, considers his $675,000 office his retirement investment.

“I’m self-employed; I don’t have a retirement plan or 401(k),” he said. “If I’m paying rent, I’m just throwing money away day in and day out and I’m not getting anything.”

But for others, the ability to own a piece of commercial property, no matter how small, takes on a deeper significance.

“It’s a big thing in the Indian culture to own your own real estate. It’s something people yearn for,” said Harpreet Chadha, who owns two units at Ringwood, for Legacy Resources, his estate planning firm, and Heritage Ventures, owner of the Una Mas restaurants.

For Realty World franchise owner Yasmin Rodriguez, buying a 1,350-square-foot space at the Venture Commerce Center was the fulfillment of a personal goal — and one that was a long time coming. Her Small Business Association loan took months longer than she expected, and she lost out on the larger condo she had hoped to buy. Still, she says it was worth the sacrifice.

“It’s definitely something I’m very proud of as a young Latina businesswoman,” she said.

“I walk in every day and I open that door and have that key in my hand, and I know that it’s something I own, and it’s something that’s pretty to look at, and clients appreciate it.”

Rodriguez and condo neighbor Wikkeling said they were so interested in buying their own space that they’d come take pictures during construction.

“I’d come here every day and watch them put the walls up,” Wikkeling said.

“I have pictures from the time the dirt was out here,” said Rodriguez, who recently persuaded a friend to buy a unit in the same complex.

Chadha likes owning his properties to provide financial stability and to have something to pass on for posterity. For now, he enjoys the autonomy as well.

His rental office had two offices: one for him and one for his assistant.

“Here, I have three offices and three cubicles and a very nice conference room, and I can walk into it anytime I want.”

Golden Bay Properties owner Alex Ayala agreed. He bought his own office after being frustrated with landlords who didn’t maintain rental properties to his standards.

“There’s this belief that real estate offices are supposed to be nice,” he said. “It was very difficult out there, so I just decided to buy my own and do the tenant improvements.”

Personal touch

David Ocampo, principal of Milagro Marketing, wanted the freedom to express the creativity that’s his stock in trade.

“The type of business I’m in, you always want to represent yourself in kind of a fresh, funky way. And when you’re renting, it’s hard to drop the hardwood floor in and do the molding that you want and paint the walls.”

His $290,000, 750-square-foot unit at Ringwood with mustard yellow and blue walls boasts custom-built desks and an abundance of natural light.

The light is no coincidence. Borelli and Bengiveno say they consider feng shui — the Chinese art of positioning objects for harmony and balance — when they build now.

“We pay attention to our addressing, the way a building faces. We no longer bisect windows with trees or poles,” Bengiveno said.

“Our clients are teaching us how to sell product to them.”

Contact Jon Ann Steinmetz via kconrad@mercurynews.com or (408) 920-5073.

Do the Math.
Any Way You Figure It, Owning Adds Up

Most small to medium-sized businesses don’t think about buying business space. But with today’s real estate market and tax laws, that has changed.

Buying the right business condominium is a far better value than leasing. Just do the math. Put 10% down with SBA financing, subtract first-year IRC Section 179 write-offs of up to $100,000. And cost segregation that significantly accelerates depreciation.

Even before considering other tax deductions and potential appreciation, you’re dollars ahead! Borelli Investment Company is the Silicon Valley’s business condominium specialist. To learn more visit these Borelli complexes at the website listed.

A Land Repositioning Made to Order

HIGHLIGHTS

• Repositioning of ten-acre, former shopping center site in San Jose
• Created structured, orderly disposition process that focused demand, while demonstrating seller commitment
• Obtained winning bid that represented significant value enhancement for seller, and fair market price for buyer
• Winning bidder, Toll Brothers, will build approximately 200 townhomes and condominiums at Willow Glen Place

In its day, Hacienda Garden Shopping Center on Meridian Avenue in San Jose was a busy hub of activity. One of countless small shopping centers in the Bay Area designed to bring convenience to California’s carefree suburban lifestyle, Hacienda Gardens offered a medium-sized anchor retailer, supermarket, and a number of specialty retailers to shoppers in a sunny outdoor setting.

But that was in the 1960s, and by 2005 — with the growth of major regional malls such as Valley Fair and Oakridge — time had passed Hacienda Gardens by.

CHALLENGE

Surrounded by well-kept residential neighborhoods, Hacienda Gardens was ideally suited to be repositioned for high-density residential. The owners — KT Properties joint venture of Cupertino — decided to divide the old shopping center into two parcels. On one parcel, KT Properties plans a major renovation to transform the property into a master-planned, mixed use development. The northerly ten acres at Foxworthy and Meridian Avenues were put on the market for homebuilders.

Borelli Investment Company was one of a number of brokers that began working with KT Properties to find a buyer for the property at a price that would benefit both the buyer and seller.

Early in the process, a number of brokers and prospective buyers were involved, and rather than generating higher demand, this simply seemed to create more confusion. The risk to KT Properties was that the property would be sold for considerably less than market value.

SOLUTION

Borelli Investment Company proposed a more orderly disposition process that would afford all prospective homebuilders an equal opportunity to bid for the property, while at the same time, demonstrating the owner’s commitment to sell and focusing the demand in a way that would drive the offers to appropriate levels for such a well-located parcel.

Borelli Investment Company prepared comprehensive packages describing all aspects of the opportunity, and submitted the packages to approximately one dozen qualified homebuilders. This gave each bidder a clear sense of the opportunity and a thorough understanding of how the winning bidder would be selected.

RESULTS

Almost one year after beginning to work with KT Properties, Borelli Investment Company’s collaborative efforts to bring structure to the marketing process paid off with a multi-million dollar transaction that represented a substantial value enhancement to the seller — and a good deal for the buyer, Toll Brothers, America’s Luxury Homebuilder.

Toll Brothers is building Willow Glen Place, a community of approximately 200 townhomes and condominiums reminiscent of the California Bungalow style. Each residence features spacious floor plans with luxurious master bedroom suites with walk-in closet and private bath, and kitchens with well-crafted cabinets and granite slab countertops. Community amenities include a pool, spa, gym, and clubhouse — plus a tot playground.

By working closely with KT Properties to create a more orderly marketing effort than the typical land brokerage process, Borelli Investment Company helped close a transaction that was made to order for both the buyer and seller — resulting in another acclaimed Toll Brothers development offering high-quality, luxury housing.