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.

Borelli Investment Company Closing Out Ringwood Business Center

Three-building, 72,000 square foot business condominium complex sells 46 of 47 units in a little over one year

San Jose, California, January 9, 2006 — Borelli Investment Company has announced a virtual sell-out at Ringwood Business Center, a new 72,200 square foot, three-building business condominium complex in North San Jose.

Ringwood began selling its 47 business condominium units ranging from 750 square feet to 3,500 square feet just over a year ago, and at this writing, only one unit is left.

“Business condominiums are hot in general, and Ringwood units were in high demand from day one” said Ralph Borelli, president of Borelli Investment Company, developer of the project.  “Ringwood business condominiums allow owners to buy, not lease — building equity, while enjoying the tax benefits of property ownership. The concept makes so much sense, it’s a natural winner.”

Located in International Business Park

The single-story complex is well located in North San Jose’s International Business Park.  Borelli Investment Company purchased a prime parcel left over from a larger business complex next door, and then developed an attractive, modern-looking business center.  Ringwood owners have easy access to major transportation arteries such as I-680, I-880, and the Montague Expressway, and are less than five miles from San Jose International Airport. Ample parking exists on-site, with a ratio of four cars-per-thousand square feet of space.

“Demand has remained so strong over the past year that several investors have already bought and re-sold units with a substantial appreciation in value,” Borelli commented.  “We have quite a range of owners in the complex — including professional firms, contractors, a machine shop, and even a dental lab.  Ringwood is a great place to do business.”

Borelli Investment Company handles all owner upgrades as needed.  SBA financing — requiring only 10 percent down — is available through Mid-Peninsula Bank.  Borelli Investment Company also offers lease-to-own plans, which allow a business to make purchase decisions months or years down the road, with a portion of the lease payments applied to the eventual down payment.

For more information about the final unit at Ringwood Business Center, call Borelli Investment Company at (408) 453-4700 and ask for Lynn Hawkins, or e-mail lynn@borelli.com.

Borelli Investment Company is one of the oldest commercial real estate firms in the Santa Clara Valley. 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 http://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

www.borelli.com

Cost Segregation and 1031 “like-kind” Exchanges Doing Double Duty

Cost segregation and 1031 “like-kind” exchanges are both excellent tax-deferral strategies that can reduce your taxes. Taken together, the two methods offer even greater benefits for smart property owners.

Most owners of commercial property — from a large industrial building to the increasingly popular business condominiums — are aware of the value of IRC Section 1031 exchanges. In these transactions, commonly known as “like-kind exchanges”, owners dispose of business or investment property through a qualified intermediary, and the proceeds of the sale are used to purchase a replacement property of like kind. The transactions allow owners to defer taxes on all or a substantial portion of a gain on that sale. The replacement property typically has a carryover tax basis that is calculated by subtracting the gain deferred through the exchange from the value of the replacement property.

While 1031 exchanges have been around for a number of years, cost segregation is a newer, but now widely used tax-deferral strategy by commercial real estate owners. Cost segregation is the practice of identifying and segregating the depreciation of building components that support personal property or are related to the business activity rather than to the building itself. The building components that are reclassified from real property to personal property can be depreciated over substantially shorter time periods — ranging from 5 to 15 years — as opposed to 39 years for commercial property, using the standard straight-line method. Personal property can also employ accelerated, front-end loaded methods of depreciation, such as 200% or 150% declining balances, for even faster write-offs.

Essentially, cost segregation reflects the reality that while a building may well continue to be functional over four decades, there are many components — from carpeting and cabinets to landscaping and lighting fixtures — that will need to be replaced many times by then.

Cost segregation saves even smaller property owners tens of thousands of dollars through deferred taxes. A number of studies have suggested that as much as 25% to 30% of a property’s basis could be eligible for the accelerated depreciation. To make this determination, you’ll need the help of your CPA and perhaps an engineering consultant that can conduct the detailed study required.

Combining 1031 Exchanges with Cost Segregation

Recently, it has become clear that real estate owners can take advantage of both 1031 exchanges and cost segregation, enjoying the tax advantages of both strategies. According to an article in the Journal of Accountancy (August 2005):

In general, the definition of real property under section 1031 is determined by state law. In contrast, the definition of real and personal property for tax-depreciation purposes is determined under federal law. State law tends to classify fixtures in a building as real property. Therefore, property such as wall coverings, carpeting, special purpose wiring or other installations affixed to the building can be considered real property under state law and like-kind property for section 1031 purposes, but personal property for cost segregation studies. Thus, real estate owners can benefit from both the gain deferral under section 1031 for real estate exchanges and the enhanced cost recovery deductions of the cost segregation study.

In other words, you can have your cake, and eat it too!

A Few Considerations

Obviously, before embarking on these strategies, property owners need to consider a few factors.

First, will cost segregation be beneficial for the property you own? Borelli Investment Company performs cost segregation studies on each of the business condominiums it offers at its hot-selling complexes, such as AirTech Office Condominiums, Junction Office Center and Ringwood Business Center. Owners are, of course, advised to consult with their CPAs and are free to arrange for their own engineering studies if they wish.

Second, as a property owner, you should consult with your CPA about the impact of depreciation recapture in the future as a result of the cost segregation study, should you later dispose of the property through a 1031 exchange.

Regardless of some of the future risks, cost segregation offers such significant present value benefits through accelerated depreciation that the advantages often outweigh any potential disadvantages should a 1031 exchange later take place.

The bottom line is that relying on the two methods, buyers of Borelli Investment Company’s condominiums and other real property have tremendous potential to defer income taxes to future periods and improve their cash flow in the present.

For more information about cost segregation and 1031 exchanges, contact Borelli Investment Company at www.borelli.com, or call (408) 453-4700.

North San Jose’s Future is Looking Up

Vision North San Jose plan approved by the San Jose City Council in June 2005 provides the blueprint for a new land use policy along area transportation corridors that will see future growth go up, not out.

Driving up North First Street and into the surrounding industrial areas is like taking a trip back in time. Suddenly, it’s the 1970s. The semiconductor industry is skyrocketing. Dozens of related high technology businesses are being started each year. And these infant companies need millions of square feet of research and development and light manufacturing space here in Silicon Valley.

North First Street’s Golden Triangle — the area bounded by I-880 and Hwys 101 and 237 — is home to many of these companies. These are the buildings that surround you on your trip through time: one- and two-story dinosaurs from a different era, built for vastly different purposes than are required today.

You blink, and you’re back in the 21st century. Manufacturing has moved overseas. The imagination and brain power is still here, but the needs for office and commercial space to support these employees are radically different from what they were from the late 1960s into the 1980s — during the valley’s heyday.

City of San Jose officials have created a vision for the future that takes into account the changing business environment, transportation picture, and lifestyle trends impacting the valley today. Vision North San Jose represents meticulous research and a significant amount of discussion on the part of the San Jose Redevelopment Agency, Office of Economic Development, city planning department, council members, developers, industry executives, and residents. The plan is the first update in land use policy for the North San Jose area since 1988.

“This is a sea change in land use planning,” says Ralph Borelli, CEO of Borelli Investment Company. “The city has devised a framework for smart growth over the next 25 years. The area is going to be urbanized, with midrise and highrise office and residential buildings clustered along transportation corridors, replacing the aging industrial parks that are there now.”

High-Density, Industry-Centered, Urban Village

At the core of San Jose’s vision is a mosaic that brings together office, retail, and residential space into a high-density urban village. The plan incorporates:

• 26.7 million square feet of new office and R&D space
• 32,000 new high-density residential and single-family homes in close proximity to jobs
• 1.7 million square feet of supporting retail space
• $520 million in transportation improvements
• Parks and open spaces, public safety services, educational facilities

Borelli Investment Company Wins “Land Deal of the Year” Award

Borelli cited for major transactions in Milpitas and San Jose in
San Jose Business Journal’s Structures supplement

San Jose, California, December 13, 2005 — Coming off a year in which Ralph Borelli and Borelli Investment Company handled seven land transactions worth $56 million to earn the Association of Silicon Valley Brokers (ASVB) Land Broker of the Year award, the question was: what would Borelli and his firm do for an encore?

• How about selling 50 acres of unused county land east of I-880 in Milpitas, in a transaction that will ultimately provide the county with an estimated $400 million from the sales proceeds and a long-term ground lease, and generate billions of dollars in tax revenue for the City of Milpitas?
• And how about the sale of the old Union Pacific maintenance yard off Williams Street near downtown San Jose, in a complex deal that involved a $7 million clean-up of the site to prepare it for the construction of a new home community?

Together, these transactions earned Borelli Investment Company the Land Deal of the Year award from the San Jose Business Journal, as announced recently in the newspaper’s Structures magazine supplement.  As complicated as the transactions sound, they are not out-of-the-ordinary for Borelli Investment Company. In fact, one of the hallmarks of a typical land deal for Ralph Borelli and the respected real estate firm that his father founded 50 years ago is that these transactions are often the kind that other brokers hesitate to take on.  Ralph is one of the few land brokers who has the experience and creativity to handle complex transactions that involve time-consuming entitlement work with city governments, or the ability to pull together multiple small pieces of land to create a larger parcel that makes sense for a developer.

“This is something that we’ve come to specialize in over time,” said Borelli, president and CEO of Borelli Investment Company. “ In Silicon Valley, there are very few large pieces of land that haven’t been developed yet. Most of the projects we handle involve in-fill locations, so we’ve gotten very good at those.”

Home Developments a Specialty  Borelli Investment Company handles the majority of its land transactions for large homebuilders such as KB Home and Toll Brothers.  The land deals that it brokers ultimately result in much-needed housing for residents in Silicon Valley and other parts of Northern California.

For example, in Milpitas, KB Home will build a community of approximately 800 single-family homes, townhomes, and condominiums on part of the property that was sold by Santa Clara County. The rest of the land will be leased to automobile dealerships. In downtown San Jose, the buyer was also KB Home, which will build 105 homes on the old Union Pacific Site.

But Borelli Investment Company doesn’t just broker land to residential builders. “We’ve put together transactions for shopping center developers, as well as traditional office and industrial development companies,” noted Borelli. “It’s simply that today, there is a tremendous demand for housing in Northern California, and the complexity of the deals—especially in Silicon Valley—plays to our strengths in repositioning property, obtaining government approvals, and working through complicated development issues.”

Borelli was presented the Land Deal of the Year award on October 27th in the rotunda of the new San Jose City Hall, at a dinner sponsored by the San Jose Business Journal and attended by hundreds of people from the real estate industry, who were there to honor the Structures winners. “This is quite an honor,” Borelli commented. “We look forward to continuing to work to put together these kinds of transactions for our clients as the opportunities arise.”

Borelli Investment Company is one of the oldest commercial real estate firms in the Santa Clara Valley. Celebrating its 50th anniversary in 2005, the company provides a full range of commercial real estate services—from development and construction management to land sales, consulting for sales and leasing, and property management services. 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

Borelli Investment Company Completes Phase I of Junction Office Center

Prime Golden Triangle location and smaller office condominium sizes create
significant sales activity prior to Thursday’s official opening.

San Jose, Calif., November 14, 2005 — Borelli Investment Company has completed renovation and is reporting brisk sales activity at the first phase of Junction Office Center, a two-building, 77,000 square foot office condominium complex at 2051-2055 Junction Avenue near Charcot in San Jose.  With the complex’s official opening this Thursday, November 17th, the first of the two buildings (2051 Junction Avenue) already has 36 percent of the units in escrow or with offers pending.  Renovation of the second phase of the office condominium complex will begin immediately.

“More and more, owners of small to medium-sized business are discovering the tremendous advantages of owning their own business property,” said Ralph Borelli, president of Borelli Investment Company.  “Junction Office Center condominiums range in size from as small as 750 square feet to 3,000 square feet-putting them within the reach of virtually every business. With a range of tax benefits, accelerated depreciation through an accounting method called cost segregation, interest write-offs, and SBA financing that only requires ten percent down-a buyer or investor can conceivably get into his or her own space with very little after-tax expense.”

A New Vision for North San Jose

Located in the heart of the Golden Triangle—formed by the intersections of I-880, Hwy 101, and Hwy 237—Junction Office Center also gives buyers an entrée into an area likely to see increased activity due to San Jose’s Vision North San Jose plan. Vision North San Jose calls for a sweeping transformation of the North First Street transportation corridor and surrounding technology parks, creating a mosaic of new office and industrial, retail, and residential development.

The plan envisions an exciting, diverse urban village linked by existing and future mass transit, including:

• 26.7 million square feet of new office and R&D space
• 32,000 new high-density residential and single-family homes in close proximity to jobs
• 1.7 million square feet of supporting retail space
• $520 million in transportation improvements
• Parks and open spaces, public safety services, educational facilities

Junction Office Center is a short drive from Mineta San Jose International Airport, and offers easy access to I-880 and Hwy 101 to reduce employee commutes.  The complex provides ample parking, with a ratio of 5.3 cars-per-thousand square feet of space. On-site services include UPS, FedEx, and US Postal Service drop boxes, and a delicatessen planned for the office center.

“Junction Office Center’s location puts owners on the leading edge of the renewal planned for North San Jose,” Borelli explained. “Because office condominiums enable owners to enjoy potential long-term appreciation in value, this is an ideal opportunity.”

$15 Million Renovation

Junction Office Center is undergoing an extensive makeover, with Borelli Investment Company investing more than $15 million in the two two-story buildings set around an open courtyard. Exterior improvements include awning-covered entrances and extensive landscaping. Formal lobbies with polished granite floors and high ceilings add to the professional touches. The 52 individual suites in both phases will be fully carpeted with a complete coffee bar, have separately metered electrical, and offer T1 access for high-speed Internet and file exchange.

The buildings also include upgraded restrooms with showers, state-of-the-art water-source,  heat pump HVAC systems for superior heating and cooling; seismic improvements; faster elevators; and a new roof. In addition, a common conference room for the complex features Web-based videoconferencing, PowerPoint capabilities, audioconferencing, a state-of-the-art video system, and Web access.

“Business condominiums are one of the hottest trends in commercial real estate today,” noted Borelli. “As more owners discover business condominiums, the market is going to get even hotter. This is a great time to make a purchase before prices rise any further.”

For more information about Junction Office Center—including materials that illustrate the advantages of business property ownership and explain the benefits of cost segregation—business people should call Larry Bengiveno at Borelli Investment Company at (408) 453-4700, or e-mail larry@borelli.com. Businesses can also visit the web site at www.junctionofficecondos.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

Borelli Investment Company Receives City of San Jose Commendations
Honors given for 50 years of service and for support of inaugural San Jose Grand Prix.

San Jose, Calif., October 24, 2005 — The City of San Jose has awarded Borelli Investment Company, and its president and CEO, Ralph N. Borelli, two commendations for making a mark in its community. The first was in celebration of the company’s 50th anniversary, and the second was for the company’s generous support of the inaugural San Jose Grand Prix—which won acclaim and raised money for Canary Fund’s efforts in early cancer research.

“It is a tremendous honor to receive these commendations from the city,” said Borelli. “The awards reflect the hard work and generosity of all the people who work at Borelli Investment Company and take their personal time to get involved in helping with projects like the San Jose Grand Prix, which raised so much money for a worthy cause.”

In 1955, Ralph Borelli’s father, Nelo, started a small real estate company that served as the predecessor to what is today Borelli Investment Company. Over the years, Borelli Investment Company has been instrumental in helping to develop the world-renowned Silicon Valley, and the company continues to play an active role in providing offices for local businesses and brokering land for new residential communities.

Councilman David Cortese sponsored the commendation for Borelli’s “fifty successful years of service to the community” and wished the company “many more successful years of business.”

Borelli Investment Company was also recognized as one of the San Jose businesses that donated “time, employees, and resources” to ensure that the San Jose Grand Prix enjoyed tremendous success its first year. The week-long event in July drew more than 150,000 fans and raised over a half million dollars for Canary Fund, which is dedicated to research leading to the early detection of cancer. The commendation for Borelli Investment Company was sponsored by Mayor Ron Gonzales, Vice Mayor Cindy Chavez, and Councilmembers Linda LeZotte and David Cortese.

“While it is an honor to be recognized for our efforts, the real reward comes from helping our community,” Borelli remarked. “We look forward to continuing to serve Silicon Valley’s commercial real estate industry and support the San Jose Grand Prix and other communitywide events in the years to come.”

Borelli Investment Company is one of the oldest commercial real estate firms in the Santa Clara Valley. Celebrating its 50th anniversary in 2005, the company provides a full range of commercial real estate services—from development and construction management to land sales, consulting for sales and leasing, and property management services. 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

Borelli Investment Company Announces Junction Office Center in San JosePrime location in Silicon Valley’s Golden Triangle affords smaller businesses
the opportunity to purchase office condominiums as small as
750 square feet — to enjoy the benefits of ownership, rather than leasing space.

San Jose, Calif., October 10, 2005 — Borelli Investment Company, has announced Junction Office Center, a two-building, 77,000 square foot office condominium complex at 2051-2055 Junction Avenue near Charcot in San Jose. At Junction Office Center, small to medium-sized businesses can purchase — not lease — office condominiums ranging in size from 750 to 3,000 square feet, and enjoy all the tax benefits and potential long-term appreciation usually available only to businesses capable of purchasing an entire building.

“Many owners of smaller businesses don’t realize there’s an alternative to leasing,” said Ralph Borelli, president of Borelli Investment Company, which is developing the Junction Office Center project. “Business condominiums are similar to residential condominiums in that owners buy space rather than lease it. This provides a business all the benefits of real estate ownership: depreciation, interest write-offs, and other tax deductions — in addition to prospective appreciation over time.”

Located in San Jose’s Golden Triangle

Junction Office Center is located in the heart of the technology-rich Golden Triangle — formed by the intersections of I-880, Hwy 101, and Hwy 237. A number of major corporate campuses for technology leaders are nearby, and the location offers ready access via major transportation arteries to work with clients virtually anywhere in Silicon Valley. The complex is also only a few minutes from Mineta San Jose International Airport, and is close to the VTA light rail station on North First Street for easy commutes that avoid high gas prices.

For those who drive, there’s ample parking exists for employees and clients alike, with a ratio of 5.3 cars-per-thousand square feet of space. On-site services include UPS, FedEx, and US Postal Service drop boxes. In addition, a large delicatessen planned for the office center will enable business owners to hold working lunches without leaving Junction.

“The location is on the edge of an area defined in Vision North San Jose — an ambitious land use plan that targets development along the North First Street transportation corridor,” Borelli remarked. “Junction Office Center puts owners in a prime location to benefit from this long-term growth blueprint.”

Professional-Quality Office Space

Borelli Investment Company is investing more than $15 million in the two-story office buildings set around a central open courtyard. Awning-covered entrances and formal lobbies with polished granite floors and high ceilings create a good first impression on visitors. Each of the 52 suites is fully carpeted and has its own coffee bar, which includes a sink and cabinets. Suites also have individual controls for heating and air conditioning, are separately metered for electrical usage, and have access to the building’s T1 fiber optic cable for high-speed Internet access and file exchange.

The sweeping renovation of the two buildings includes large, multi-stalled restrooms with showers on the first floor — perfect for joggers or bicyclists — a full seismic retrofit, upgraded elevators, ADA improvements, a new roof, and extensive landscaping.

“We’ve also completely refurbished a large common conference room with Web-based videoconferencing, PowerPoint capabilities, audioconferencing, a state-of-the-art video system, and Web access,” noted Borelli. “This is a great environment for getting business done.”

Ownership Advantages

Junction Office Center enables smaller businesses to take advantage of special tax benefits to reduce the cost of buying.

“IRC Section 179 deductions allow business owners to write off up to $105,000 in bonus first-year depreciation, and a widely accepted accounting method known as cost segregation can accelerate depreciation on a substantial portion of an owner’s property,” Borelli explained. “These deductions, plus SBA financing — which requires only a 10 percent down payment — make this a very attractive opportunity.”

Interested businesses can obtain more information about Junction Office Center by calling Borelli Investment Company at (408) 453-4700 and asking for Larry Bengiveno, or e-mailing larry@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