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

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 the South Valley something 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. “Miramonte Center offers South Valley residents a shopping experience they won’t find anywhere else.”

Putting the Parcels Together

Before ground could be broken on Miramonte Center, 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 the Santa Clara Valley commercial 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 the Santa Clara Valley are 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 as Miramonte Center.”

Contemporary Design

Miramonte Center features 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 off Cochrane Road by 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.

Miramonte Center is 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 Hill has 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

By Katherine Conrad, San Jose Mercury News,August 13, 2006Commercial real estate dealmaker Ralph Borelli grew up in East San Jose next to an apricot orchard where his job was to cut open the succulent fruit and lay it out for drying. “They used to let me cut the apricots until I had a cut on every finger. Then I was relegated to the pit boy. Born and raised in oldSanta ClaraCounty, young Ralph cut his teeth on land deals and real estate acquisitions. He recalls attending city council meetings with his father, Nelo G. Borelli, an Italian immigrant who founded theSilicon Valleyreal estate company in 1955. In 1973, Borelli took over the small firm and built it into a commercial real estate engine that manages 4 million square feet, has more than 1,000 tenants and employs 30 brokers and their assistants.
		Ralph Borelli worked on a deal since 1976 and said, “I should have bid the job by the hour.”
During his career he has brokered some of the biggest land deals inSanta ClaraCounty, including KB Homes’ Tuscany Hills project of which he is most proud, and the Elmwood transaction valued at $60 million withMilpitasandSanta ClaraCounty.After closing a retail deal inMorgan Hillfor 66 acres that he began working on in 1976, Borelli only had this to say: “In hindsight, I should have bid the job by the hour.” Born in this valley, he has been a witness to its metamorphosis, even as he has played a role in driving it. His boyhood valley of orchards became a land of tract homes and industrial campuses, and it is now growing into higher-density housing and office complexes. Borelli calls it “land recycling”.		TITLE: CEO, Borelli Investment CompanyAGE: 52 CAREER: Began workings as a real estate broker at 19 and worked at an auto wrecking yard for four years. EDUCATION: San JoseStateUniversity, 1976, B.A. in business administration with emphasis in real estate. FAMILY: Wife, Gina, and three daughters, Marissa, 23; Kristina, 21; and Janelle, 18.

 

FIVE THINGS TO KNOW ABOUT RALPH BORELLI
	1. Stock cars don’t have speedometers, so Borelli doesn’t know exactly how quickly he’s sped around the Grand Prix track. His best guess is125 mph. “We were going into a curve on the race track, so it was pretty hairy.” He and his crew, the Historic Stock Car Racing Series, raised about $35,000 for the Canary Foundation by giving rides along the track to the highest bidders.
	2. He just closed a land deal for 66 acres inMorgan Hillthat he began working on in 1976.
	3. Borelli Investment has forged an alliance with an Asian-American brokerage firm, GD Commercial Real Estate inMilpitas, to sell commercial condos to overseas investors. A delegation fromChinais scheduled to visit in September.
	4. He was named Land Broker of the Year by the Association of Silicon Valley Brokers.
	5. His first real estate deal was selling a house in downtownSan Josefor $7,500. He received 75 $100 dollar bills stuffed in a paper bag. Where did the cash come from? Borelli didn’t ask.

Q You started in commercial real estate more than 30 years ago, and you have watched the economic development of the valley. Is the valley transforming itself again?

A The orchards are all gone. TheMorgan Hilldeal has a vineyard on it. Most development deals today are recycling property. We’re involved in a number of transactions where we’re tearing down industrial buildings that aren’t that old. We tore one down in January that was 22 years old… There was nothing wrong with that building. But it was in an area ofSan Josethat was being transformed from industrial to residential. There’s still such tremendous demand for residential housing.

 

Q This is controversial, as some say the city is demolishing its industrial base that employs people in favor of houses.

A In my view, there’s still a lot of buildings that are functionally obsolete. And there’s a lot of manufacturing that is gone and is not coming back. And there’s still a tremendous demand for housing.

 

Q But once houses are built, the recycling process is over. Houses are permanent. Where do you stand on this?

A In my opinion as our market matures, you are going to have a lot more office type of buildings rather than manufacturing buildings because the manufacturing is gone and I don’t think it’s coming back.

Manufacturing in this valley for the most part now is software-related. You can have a multistory office building filled with software engineers and that’s manufacturing. It’s a different type of product. You have to go vertical with the price of land. It’s a natural evolution of our marketplace.

 

Q You’ve watched the orchards bulldozed for housing, now buildings your company constructed get torn down for either more housing or higher office buildings. I understand that you are a businessman with a family to feed and employees to pay – but do you feel any nostalgia after all the changes?

A Time marches on. People have got to decide where the priority is. Are you going to provide enough housing for people or artificially choke off housing and keep raising the price? People wonder why housing is so expensive. It’s so simple, it’s supply and demand. If you want this bucolic neighborhood with a bunch of ranches around, then be prepared for high prices, because I don’t think people are going to leave here.

 

Q The recycling trend: What do you think about that?

A As an economy, you need to adapt to changing times in the marketplace. Otherwise the market is going to pass you by… Those buildings are obsolete; they should be torn down. If you don’t change with the times, the private sector is going to pass you by. Then you’re going to have a wasteland.

 

Q What do you think about Yahoo’s recent acquisition inSanta Claraand its plans to demolish the buildings and construct a new campus, possibly a headquarters?

A I think a move like that is outstanding forSilicon Valleybecause you have the bellwether company making a huge commitment to maintaining their headquarters here, and we need that. Fortunately Yahoo has enough of a margin that they can afford to pay. Apple is another example, as is Google. These companies can afford to stay here and pay their employees enough so they can afford to live here. But if you manufacture coat hangers and you don’t have enough of a margin, you can’t be here and you won’t be here.

Catching up with Ralph Borelli – Real Estate Baron Started Out Cutting ‘cots

By Katherine Conrad, San Jose Mercury News, August 13, 2006

Commercial real estate dealmaker Ralph Borelli grew up in East San Jose next to an apricot orchard where his job was to cut open the succulent fruit and lay it out for drying.

“They used to let me cut the apricots until I had a cut on every finger. Then I was relegated to the pit boy.

Born and raised in old Santa Clara County, young Ralph cut his teeth on land deals and real estate acquisitions. He recalls attending city council meetings with his father, Nelo G. Borelli, an Italian immigrant who founded the Silicon Valley real estate company in 1955.

In 1973, Borelli took over the small firm and built it into a commercial real estate engine that manages 4 million square feet, has more than 1,000 tenants and employs 30 brokers and their assistants.

During his career he has brokered some of the biggest land deals in Santa Clara County, including KB Homes’ Tuscany Hills project of which he is most proud, and the Elmwood transaction valued at $60 million with Milpitas and Santa Clara County.After closing a retail deal in Morgan Hill for 66 acres that he began working on in 1976, Borelli only had this to say: “In hindsight, I should have bid the job by the hour.” Born in this valley, he has been a witness to its metamorphosis, even as he has played a role in driving it. His boyhood valley of orchards became a land of tract homes and industrial campuses, and it is now growing into higher-density housing and office complexes. Borelli calls it “land recycling”.

TITLE: CEO, Borelli Investment CompanyAGE: 52CAREER: Began workings as a real estate broker at 19 and worked at an auto wrecking yard for four years. EDUCATION: San Jose State University, 1976, B.A. in business administration with emphasis in real estate. FAMILY: Wife, Gina, and three daughters, Marissa, 23; Kristina, 21; and Janelle, 18.

 

FIVE THINGS TO KNOW ABOUT RALPH BORELLI
	1. Stock cars don’t have speedometers, so Borelli doesn’t know exactly how quickly he’s sped around the Grand Prix track. His best guess is125 mph. “We were going into a curve on the race track, so it was pretty hairy.” He and his crew, the Historic Stock Car Racing Series, raised about $35,000 for the Canary Foundation by giving rides along the track to the highest bidders.
	2. He just closed a land deal for 66 acres in Morgan Hill that he began working on in 1976.
	3. Borelli Investment has forged an alliance with an Asian-American brokerage firm, GD Commercial Real Estate in Milpitas, to sell commercial condos to overseas investors. A delegation from China is scheduled to visit in September.
	4. He was named Land Broker of the Year by the Association of Silicon Valley Brokers.
	5. His first real estate deal was selling a house in downtown San Jose for $7,500. He received 75 $100 dollar bills stuffed in a paper bag. Where did the cash come from? Borelli didn’t ask.

Q You started in commercial real estate more than 30 years ago, and you have watched the economic development of the valley. Is the valley transforming itself again?

A The orchards are all gone. The Morgan Hill deal has a vineyard on it. Most development deals today are recycling property. We’re involved in a number of transactions where we’re tearing down industrial buildings that aren’t that old. We tore one down in January that was 22 years old… There was nothing wrong with that building. But it was in an area of San Jose that was being transformed from industrial to residential. There’s still such tremendous demand for residential housing.

Q This is controversial, as some say the city is demolishing its industrial base that employs people in favor of houses.

A In my view, there’s still a lot of buildings that are functionally obsolete. And there’s a lot of manufacturing that is gone and is not coming back. And there’s still a tremendous demand for housing.

Q But once houses are built, the recycling process is over. Houses are permanent. Where do you stand on this?

A In my opinion as our market matures, you are going to have a lot more office type of buildings rather than manufacturing buildings because the manufacturing is gone and I don’t think it’s coming back.

Manufacturing in this valley for the most part now is software-related. You can have a multistory office building filled with software engineers and that’s manufacturing. It’s a different type of product. You have to go vertical with the price of land. It’s a natural evolution of our marketplace.

Q You’ve watched the orchards bulldozed for housing, now buildings your company constructed get torn down for either more housing or higher office buildings. I understand that you are a businessman with a family to feed and employees to pay – but do you feel any nostalgia after all the changes?

A Time marches on. People have got to decide where the priority is. Are you going to provide enough housing for people or artificially choke off housing and keep raising the price? People wonder why housing is so expensive. It’s so simple, it’s supply and demand. If you want this bucolic neighborhood with a bunch of ranches around, then be prepared for high prices, because I don’t think people are going to leave here.

Q The recycling trend: What do you think about that?

A As an economy, you need to adapt to changing times in the marketplace. Otherwise the market is going to pass you by… Those buildings are obsolete; they should be torn down. If you don’t change with the times, the private sector is going to pass you by. Then you’re going to have a wasteland.

Q What do you think about Yahoo’s recent acquisition in Santa Clara and its plans to demolish the buildings and construct a new campus, possibly a headquarters?

A I think a move like that is outstanding for Silicon Valley because you have the bellwether company making a huge commitment to maintaining their headquarters here, and we need that. Fortunately Yahoo has enough of a margin that they can afford to pay. Apple is another example, as is Google. These companies can afford to stay here and pay their employees enough so they can afford to live here. But if you manufacture coat hangers and you don’t have enough of a margin, you can’t be here and you won’t be here.

 

---

Contact Katherine Conrad at kconrad@mercurynews.com or (408) 920-5073.

 

By Katherine Conrad, San Jose Mercury News,August 8, 2006 For too many years Morgan Hill residents have spent most of their shopping dollars — a whopping $100 million annually — outside their city limits.They had little choice. City officials tried to avoid the cookie-cutter look of big-box national retailers and focused instead on nurturing the city’s downtown. Over time, city funds slowly dwindled as tax dollars found their way elsewhere.Now the South County city is coming late to the big-box party, but on its own terms. With the construction of a 650,000-square-foot shopping center across 66 acres — Morgan Hill’s largest retail project to date — it’s eager to grab nationally recognized retailers to fill the center’s stores before they land somewhere else.

But Morgan Hill could face a struggle to reverse the trend of dollars flowing to South San Jose’s Oakridge Mall and to nearby Gilroy, where shoppers have made the Gilroy Premium Outlets one of the most successful outlets on the West Coast.

Scheduled to open in summer 2007, the currently unnamed center near Highway 101 and Cochrane Road has been 30 years in the making and will boast the region’s largest Target store at 127,000 square feet. It also will have Petco, Staples and Cost Plus World Market, according to Garrett Toy, Morgan Hill’s director of business assistance.

Developers John DiNapoli of San Jose and Daryl Broman of Oakland plan to spend more than $100 million to build the center, which may feature a movie complex as well as national restaurants, such as Chili’s.

“The city of Morgan Hill for most of the last 10 years has not been pro-development for big-box retail,” said Jim McMasters, a retail expert with the Colliers International commercial real estate brokerage, who handled leasing for Gilroy Crossings, which opened in 2004.

“But what that really did was open the door to Gilroy to explode with retail.”

Affluent residents

Morgan Hill’s well-educated population of 33,000 has a solid median household annual income of $82,000, the kind of demographics retailers crave. And while they may enjoy patronizing their quaint downtown, clearly they also open their wallets wide in national retail stores.

City officials are doing their best to strike a balance by serving their residents without abandoning downtown merchants.

“We asked the developers for a mix of uses that would not directly compete with the downtown,” said City Manager Ed Tewes. “And a lot of attention was paid to the physical design of the center and how it is laid out to distinguish itself from shopping opportunities in the north and south.”

Tewes said Morgan Hill is looking for a center that doesn’t look like a “series of boxes surrounded by a sea of parking.” He hopes the careful landscaping with shrubs, oak and hawthorn trees will give it a feel that doesn’t compete with downtown.

“Morgan Hill is working very hard on the downtown and we’ve been working with them,” DiNapoli said. “We’ve brought in local brokers who have helped give them ideas about what do with the downtown.”

DiNapoli noted that this approach supports all of Morgan Hill, not just his development, and that suits him just fine. “We’re long-term holders,” he said. “We’re not just building it to sell it.”

Time will tell if another South County shopping center can succeed or if it’s simply too late. But Tewes noted that regardless, city policies aren’t to blame for the 30 years it took to develop the 66-acre site. The city’s general plan has designated the area for commercial development since 1969.

“But painting it red (for retail) in the general plan doesn’t make it happen,” he said.

Ralph Borelli, chief executive of San Jose’s Borelli Investment, began talking to landowners, including the wine-making Guglielmo family, in 1976 about selling their land for development. Litigation among the landowners who inherited the property and over the Cochrane Road Assessment District also took years to settle.

“Stubborn” city

Borelli, who said the deal took the longest to close of any in his career, recalled that developers tried to build houses on the site and then offices, but each time they hit a brick wall with Morgan Hill officials, who insisted on retail, but only the right kind of retail.

“It wasn’t for a lack of trying,” Borelli said. “We lost a significant amount of deals to Gilroy. But I have to hand it to Morgan Hill, its planning commission held out for regional retail and that is what they will get.”

But McMasters said cities rarely succeed in trying to ignore retail trends.

“Morgan Hill has lost ground by being stubborn and waiting, and not wanting the big-box look,” McMasters said. “But retail is a dynamic industry. You can’t protect yourself when the customer benefits by the chain store.”

Contact Katherine Conrad at kconrad@mercurynews.com or (408) 920-5745.

Morgan Hill Mall to Open Next Summer; City Aims to Stem Flow of Shoppers to Gilroy

By Katherine Conrad, San Jose Mercury News, August 8, 2006

For too many years Morgan Hill residents have spent most of their shopping dollars — a whopping $100 million annually — outside their city limits.

They had little choice. City officials tried to avoid the cookie-cutter look of big-box national retailers and focused instead on nurturing the city’s downtown. Over time, city funds slowly dwindled as tax dollars found their way elsewhere.

Now the South County city is coming late to the big-box party, but on its own terms. With the construction of a 650,000-square-foot shopping center across 66 acres — Morgan Hill’s largest retail project to date — it’s eager to grab nationally recognized retailers to fill the center’s stores before they land somewhere else.

But Morgan Hill could face a struggle to reverse the trend of dollars flowing to South San Jose’s Oakridge Mall and to nearby Gilroy, where shoppers have made the Gilroy Premium Outlets one of the most successful outlets on the West Coast.

Scheduled to open in summer 2007, the currently unnamed center near Highway 101 and Cochrane Road has been 30 years in the making and will boast the region’s largest Target store at 127,000 square feet. It also will have Petco, Staples and Cost Plus World Market, according to Garrett Toy, Morgan Hill’s director of business assistance.

Developers John DiNapoli of San Jose and Daryl Broman of Oakland plan to spend more than $100 million to build the center, which may feature a movie complex as well as national restaurants, such as Chili’s.

“The city of Morgan Hill for most of the last 10 years has not been pro-development for big-box retail,” said Jim McMasters, a retail expert with the Colliers International commercial real estate brokerage, who handled leasing for Gilroy Crossings, which opened in 2004.

“But what that really did was open the door to Gilroy to explode with retail.”

Affluent residents

Morgan Hill’s well-educated population of 33,000 has a solid median household annual income of $82,000, the kind of demographics retailers crave. And while they may enjoy patronizing their quaint downtown, clearly they also open their wallets wide in national retail stores.

City officials are doing their best to strike a balance by serving their residents without abandoning downtown merchants.

“We asked the developers for a mix of uses that would not directly compete with the downtown,” said City Manager Ed Tewes. “And a lot of attention was paid to the physical design of the center and how it is laid out to distinguish itself from shopping opportunities in the north and south.”

Tewes said Morgan Hill is looking for a center that doesn’t look like a “series of boxes surrounded by a sea of parking.” He hopes the careful landscaping with shrubs, oak and hawthorn trees will give it a feel that doesn’t compete with downtown.

“Morgan Hill is working very hard on the downtown and we’ve been working with them,” DiNapoli said. “We’ve brought in local brokers who have helped give them ideas about what do with the downtown.”

DiNapoli noted that this approach supports all of Morgan Hill, not just his development, and that suits him just fine. “We’re long-term holders,” he said. “We’re not just building it to sell it.”

Time will tell if another South County shopping center can succeed or if it’s simply too late. But Tewes noted that regardless, city policies aren’t to blame for the 30 years it took to develop the 66-acre site. The city’s general plan has designated the area for commercial development since 1969.

“But painting it red (for retail) in the general plan doesn’t make it happen,” he said.

Ralph Borelli, chief executive of San Jose’s Borelli Investment, began talking to landowners, including the wine-making Guglielmo family, in 1976 about selling their land for development. Litigation among the landowners who inherited the property and over the Cochrane Road Assessment District also took years to settle.

“Stubborn” city

Borelli, who said the deal took the longest to close of any in his career, recalled that developers tried to build houses on the site and then offices, but each time they hit a brick wall with Morgan Hill officials, who insisted on retail, but only the right kind of retail.

“It wasn’t for a lack of trying,” Borelli said. “We lost a significant amount of deals to Gilroy. But I have to hand it to Morgan Hill, its planning commission held out for regional retail and that is what they will get.”

But McMasters said cities rarely succeed in trying to ignore retail trends.

“Morgan Hill has lost ground by being stubborn and waiting, and not wanting the big-box look,” McMasters said. “But retail is a dynamic industry. You can’t protect yourself when the customer benefits by the chain store.”

Contact Katherine Conrad at   kconrad@mercurynews.com or (408) 920-5745.

Borelli Investment Co. Leads Team Effort to Keep
Approximately 175 Jobs in San Jose

Business and government cooperation results in clean approval for the sale of a warehouse used for textile rentals and commercial laundry services in North San Jose industrial park area.

San Jose, Calif., July 11, 2006 — The owner of a 53,760 square foot warehouse on Junction Avenue in San Jose was ready to move. Part of a national company that specializes in uniforms and other branded identity apparel programs and services, managers of the local facility felt the time was right to relocate its operations to another building in San Jose.

Brokers from Borelli Investment Company quickly identified a potential buyer—Alsco. Alsco is a global leader in a similar line of business, with service centers in more than 120 locations and ten countries worldwide. Every day, the privately owned company picks up, cleans and delivers millions of flat linens, uniforms, chef’s outfits, cleanroom garments, dust control items, and more. Equipped with a Class One clean room—and located near Highways 880, 101, and 680, as well as Mineta San Jose International Airport—the building was a perfect location for Alsco’s proposed San Jose service center.

The challenge was the transaction needed to close quickly. And posing a major obstacle was the fact that the City of San Jose had rezoned the area around the warehouse for industrial park uses. This made the textile rentals and commercial laundry services performed in the warehouse a nonconforming use under the city’s code.

“Obviously, the existing business could continue to provide its services after the rezoning, as long as it occupied the facility,” explained Tom Zolezzi, one of two brokers from Borelli Investment Company who worked on the transaction. “But to facilitate the sale to Alsco, we needed to get a ruling from City of San Jose Planning Department that because Alsco’s operations would be nearly identical to the selling party’s, this was a legal, nonconforming use.”

Dealing with the Spin Cycle

At first, the challenges appeared to be difficult, with much uncertainty spinning around the sale. Business timetables for both Alsco and the seller required a short contingency period and quick close. If that did not occur, both businesses would be forced to seek alternate sites outside of San Jose, costing the city the 75 jobs at the present facility, plus 75 to 100 jobs at the new San Jose facility the seller planned to occupy.

The initial reading of the zoning ordinance from the City of San Jose Planning Department caused timing concerns—with the department requesting 30 to 45 days or more to review the application before issuing a decision that might or might not allow the sale to proceed.

But Tom Zolezzi and Chris Anderson of Borelli Investment Company—along with Gerry DeYoung from planning and engineering consultant Ruth and Going—worked closely over a very short timeframe with the staffs of both the City of San Jose Redevelopment Agency and the San Jose Planning Department, and a solution was found.

“With everyone on the same page, we were able to address the San Jose Planning Department’s concerns and prove that Alsco’s business represented a legal, nonconforming use,” said Zolezzi. “Contingencies were removed, and escrow proceeded, with the transaction closing on May 19th. We negotiated a good price for Alsco, and met both companies needs to move in a timely manner.”

The transaction involved not only the Junction Avenue warehouse with its nine dock doors, two grade-level doors, clean room, and large parking and truck area—but also 5.32 acres of prime land in North San Jose, perfect for future expansion, if needed. Selling price was approximately $5 million.

“The city’s vision and cooperative efforts accelerated the process and ensured we could meet Alsco’s timetable,” Zolezzi remarked. “This truly saved the 150 to 175 jobs that would have gone elsewhere, making it a clean win for the City of San Jose, as well as the buyer and seller.”

View Alsco Corporate website
Having celebrated its 50th anniversary last year, 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 www.borell-inv.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 Enters Strategic Alliance with GD Commercial Real Estate

GD Commercial named the exclusive broker to the Asian marketplace for
hot business condominium category.

San Jose, Calif., July 6, 2006 — Borelli Investment Company, a long-time leader in commercial real estate services and a pioneer in the development of business condominiums in Silicon Valley, has announced that it has entered a strategic alliance with GD Commercial Real Estate to market its business condominium projects to the Asian marketplace.  The exclusive marketing agreement with GD Commercial covers two current Borelli business condominium projects — AirTech Office Condominiums, at 1754 Technology Drive in San Jose, and Junction Office Center, at 2051–2055 Junction Avenue in San Jose.

“Business condominiums have been a very hot category in Silicon Valley for several years,” said Ralph N. Borelli, chief executive officer of Borelli Investment Company. “The Asian community has shown a strong interest in our product from the beginning. We decided it was time to formalize our marketing efforts to this community, and when we were searching for a strong partner that knew the market, the GD Commercial name kept coming up.”

Borelli Investment Company and GD Commercial will work together to develop collateral material, web sites, and advertising in several Asian languages for Borelli’s existing business condominium projects. GD Commercial has well-established contacts not only in the Bay Area, but also with business owners and investors in China and other Asian countries, who want to open operations in the U.S.

View San Jose Mercury News article about this strategic alliance.

“There is a significant amount of interest in China right now in expanding to dynamic U.S. markets such as Silicon Valley,” explained John Luk, executive managing director of GD Commercial. “We have established relationships both here and overseas that we think can work to both Borelli’s and our benefit. Borelli develops high-quality business condominiums, available in spaces as small as 750 square feet. That makes its properties very marketable.”

AirTech Office Condominiums is a two-story garden office building with 40 office condos totaling 55,870 square feet. Borelli invested $3 million in the conversion and upgrade. Amenities include high-speed Internet access, a common conference room with large video screen, individual heating and air conditioning controls, full carpeting, and coffee bars in each suite. Down payments start as low as $41,000 — with only four suites left to sell.

Junction Office Center is a two-building, two-story office complex in North San Jose’s Golden Triangle. The 77,404 square feet of space is divided into 52 offices. Tenants and visitors enter through formal lobbies with polished granite floors and high ceilings. Amenities include carpeting and coffee bars in each unit, a common conference room with large-screen video, T1 fiber optic cable for high-speed Internet access, and showers in the bathrooms to use after a run or bike ride. Borelli invested nearly $10 million in the Junction conversion. Down payments start as low as $27,900.

“With rents beginning to rise, ownership makes a lot of sense now for businesses or professional practices of any size,” Borelli remarked. “Owners can lock in occupancy costs, and enjoy tremendous tax advantages and the potential for long-term appreciation. It really doesn’t make sense to lease if you can own.”

“We look forward to working with Borelli to market these two outstanding projects, and then continue to explore other projects in the future that provide mutual benefits,” Luk added.

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.

GD Commercial is a leading, partner-owned US commercial real estate company comprised of real estate professionals including licensed brokers, financial analysts, research professionals, and marketing specialists. The company’s range of services includes office, industrial and retail leasing; tenant representation services; property acquisitions and dispositions; corporate advisory services; mortgage financing; and consulting and research. Visit www.gdcommercial.com or call (800) 939-8168.

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

Forging New Links

Asian-American broke represents a shif in valley’s business property marketplace.

By Katherine Conrad, San Jose Mercury News, July 4, 2006

Commercial broker John Luk, the force behind San Jose’s Pacific Rim Shopping Center and the Bay Area’s largest Asian marketplace, Milpitas Square, now has a new focus: selling business space to the Asian community.

In a deal he struck with San Jose-based Borelli Investment, Borelli builds the office condominiums and Luk finds the buyers. They are chiefly Silicon Valley professionals who like doing business with people they know, who would rather own than rent their offices, and who tend to be Asian.

A Chinese-born American, Luk represents a shift in local commercial real estate, a lucrative business that still relies heavily on inside knowledge and trust. Brokers typically have been white.

Now that’s beginning to change, as Silicon Valley’s diverse entrepreneurs play a growing role in the office market. Developers who want to sell to small businesses need a conduit.

“We don’t speak the lingo,” said Borelli, who leads one of Silicon Valley’s oldest commercial real estate and development firms. “And we hope to sell the condominium units faster.”

Luk, who speaks Mandarin, is one of just a few Asian-Americans selling commercial real estate full time in Silicon Valley, others in the broker community said. He has been carving a niche for himself since he opened GD Commercial Real Estate in Milpitas three years ago.

It seems a likely endeavor for the man, who sees himself as a builder of bridges between cultures, communities and even continents. Asians believe strongly in property ownership and know how to pool their resources, he said, but they need a broker to help guide them through the process.

“We deal with every buyer,” he said. “The big boys don’t take time to respond to the small guys — we are the small guys.”

Though there are many Asian-Americans in the residential real estate industry, commercial real estate has attracted few Asians, said Olivia Jang of California Best Investment Realty in Cupertino.

“I know John Luk,” Jang said. “I know him, since in the Chinese community, there’s not so many commercial agents. There’s only him, me and a few ABCs — that’s what we call American-born Chinese — a few younger guys.”

Jang said the commercial side is a tough field to break into, especially if you don’t fit the stereotype.

“Most commercial agents are white males,” she said. “So for the Chinese, even the first generation born here, it’s not so easy to get into this field. Commercial real estate is hard, it’s more complicated and you need more knowledge.” For example, she said, there are no easily accessible listings for office properties, as there are for homes. Brokers have to rely on connections to get business.

Luk, who came to the United States in 1975 as a nurse, broke into the industry while caring for flower growers in the emergency room. Many could not speak English, so Luk was their interpreter.

He discovered that they needed help, first to negotiate better business deals for fertilizer and seed and then to sell their property, as their fields of flowers made way for development.

Three years ago, he decided to launch GD Commercial, where 15 brokers with roots in China, Vietnam and India work to serve Asian investors. Depending on Luk’s mood, the GD in the name either stands for global domain or good deal.

Luk expects the strategic alliance he has formed with Borelli Investment will take his firm to the next level. Luk is already marketing the commercial condos to the Asian-American community here. But his ambitions extend all the way to China, where he recently opened an office in the southern city of Guangzhou to encourage Chinese investors to buy a piece of America.

In the next few weeks, Luk said, 10 Chinese investors will tour Borelli’s condo projects in Ringwood Business Center and Junction Office Center.

The Borelli name ought to be fairly well-known among Asian-Americans, since two-thirds of his condo buyers are either Asian-born or of Asian ancestry, Borelli said. But now that interest rates are rising, leading to a slowdown in commercial condo sales, he is interested in finding new buyers for his product.

“There’s 1.3 billion people in mainland China and 1 billion people in India, and a big segment want to come to the United States,” Borelli said.

Under a program Congress established in 1990, called the EB-5 visa, an investor willing to invest $1 million and hire 10 employees in this country can get a green card after about a year.

“It is a lot of work to be the bridge,” Luk said. “But China is the largest-growing economy in the world. Why not have them come and do business in San Jose?”

Borelli, Luk said, does not know China, but he knows the Asians are valuable to his business.

Borelli isn’t the only one. Danny Yu, a commercial broker with NAI/BT Commercial, said he, Tenny Tsai and Jim Kovaleski, all BT brokers, went to China in November to check out investment opportunities.

“The economy in China is growing and a lot of individuals are making money,” said Yu, a broker since 1983. “They like to invest outside the country. There’s still a trust issue between them and their government. The rules are changing every day and they don’t know when the government will flip.”

As Luk said, “There’s a lot of millionaires in China and most of the billionaires are in their mid-30s and early 40s. The timing is getting closer and closer to encourage them to go out of their country and internationalize. This is the land of opportunities and the land of immigrants.”

---

Contact Katherine Conrad at kconrad@mercurynews.com or (408) 920-5073.

 

To improve its responsiveness to clients and better address market opportunities, Borelli Investment Company has promoted two of its long-time executives—shifting appropriate job descriptions and responsibilities.

In the restructuring, Buddy R. Parsons — who has been with Borelli for all but two years since 1978 — has been named president of Borelli Investment Company. Tom Purtell — who joined the firm in 1995 — has been promoted to chief operating officer. And while Ralph N. Borelli, son of founder, Nelo Borelli, has stepped down as president of the firm after nearly 30 years, he continues as CEO of Borelli Investment Company. The changes all take effect immediately.

In his new role as president, Buddy R. Parsons will be responsible for day-to-day activities in client relations, business development, sales force management, and acquisitions. Most recently, Buddy had been vice president-asset management, specializing in property and asset management, brokerage consulting services, and investment services. In the past few years, he was involved in more than 500 lease transactions and building sales for Borelli totaling approximately $70 million.

As chief operating officer for the company, Tom Purtell will oversee all day-to-day operations. In his more than a decade at Borelli, he has worked as a development partner, property manager, and an accountant. Before joining Borelli in 1995, Tom was district manager for Hollywood Video, helping to open that company’s first stores in California and direct its rapid growth phase.

Borelli Remains as CEO; Wins Awards

So, what will Ralph Borelli do after nearly 30 years as the sole person at the helm of Borelli Investment Company? Plenty. By freeing himself of much of the day-to-day decision-making, Ralph can focus on Borelli Investment Company’s longer-range vision, development projects, and the often-complicated land transactions that take place in Silicon Valley. This is a special area of expertise for both Ralph and the firm. In fact, Ralph was once again honored as the Association of Silicon Valley Brokers (ASVB) land broker of the year, repeating his win of the same award a year earlier.

The total value of Ralph’s transactions last year also earned him recognition as a CoStar Power Broker for 2005 by CoStar Group, a leading provider of information services to commercial real estate professionals nationwide. During the year, Ralph completed ten land transactions totaling nearly 504 acres and valued at $136.1 million—virtually all of that in the San Francisco Bay Area.

“Bottom line — it’s the same great people at Borelli, only now we’ll be even better able to respond to your needs,” Ralph says. “We’ve always stressed the team concept at Borelli. Beyond Buddy, Tom, and me, we have a tremendous staff of commercial real estate professionals that together deliver the highest quality service in the Bay Area. These promotions better position the firm to keep meeting our clients’ requirements for years to come.”