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.
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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.