Staff Spotlight: Lee Jatta

In this issue of the Insider, Borelli’s Staff Spotlight introduces you to Lee Jatta, one of the many professionals in Borelli’s property management department. Dedicated property managers like Lee ensure that each property is managed to maximize its long-term value for the owner, while promptly responding to tenant needs. Lee’s decade of experience and commitment to tenants and owners is what makes Borelli Investment Company the first choice for small to medium-sized property owners in Silicon Valley.

Tenants know they can count on Lee to get things done

Experience:

Started with Borelli Investment Company in 1995 in accounting. Moved to the property management department in 1996. Primarily supported Oakmead Terrace-a landmark office project in Sunnyvale-for many years, but has also managed other office, industrial, and retail properties in Silicon Valley.

Responsibilities:

Responds quickly and effectively when maintenance issues arise-such as plumbing, heating and air conditioning problems; burned-out lights, or tenant lock-outs. Also manages tenant improvements to meet all space requirements and conform to city codes.

Business Philosophy:

“I try to be prompt, efficient, and fair to all the parties involved. My goal is to be highly professional at all times, and courteous and conscientious in my dealings with everyone.”

Secret to Success:

“Lee is a very detail-oriented person,” said Tom Purtell, Chief Operating Officer of Borelli Investment Company. “He does not cut corners, nor miss deadlines. Tenants know they can count on Lee to get things done.”

Borelli Announces New Syndicatd Investment Opportunity

Although the nation’s housing market has cooled somewhat lately, Silicon Valley’s housing market remains strong, driven by a rapidly improving job market. Demand is particularly high for housing that is more affordable, targeted to first-time homebuyers. That’s what makes Borelli Investment Company’s new syndicated investment opportunity in affordably priced production housing in Sunnyvale so intriguing.

A Quality KB Home Townhome Community in Close-In Sunnyvale

KB Home is the largest new homebuilder in California, and one of the top five builders in the U.S. The company is planning to build a small community of 80 townhomes in an ideal close-in location near Lawrence Expressway and Monroe in the heart of Sunnyvale. The townhomes will be in close proximity to thousands of high-tech jobs, near major transportation arteries, and easy walking distance to a CalTrain station. Although actual prices have not yet been determined, the townhomes will be at the affordable end of the spectrum for Silicon Valley. With the added fuel savings due to shorter commutes, the new community should be just what many homebuyers are looking for.

Borelli Investment Company plans to raise $5 million in equity capital to participate in a joint venture with KB Home. Interested individuals will be able to invest in $100,000 shares, with a projected annual return of 12 percent over the expected 18 to 24 month holding period for the fund.

“Silicon Valley is very constrained on its housing,” said Ralph N. Borelli. “We have natural geographic boundaries that limit our expansion, and the conversion of outdated industrial properties to housing has been slowed recently by city planners, who are protecting their industrial base to take advantage of the recovering job market. As a result, demand remains very strong for this type of entry-level housing in Silicon Valley.”

All entitlements have been cleared for the KB Home community and necessary approvals have been obtained, so once the tenants have vacated the four older industrial buildings currently on the property, the project will be ready to proceed.

This is not an offer to sell, nor a solicitation of an offer to buy shares in the BIC-015, LLC-Aster Avenue Associates fund.  Investment shares in the fund are offered only in conjunction with the offering prospectus.  Please read carefully before you make any investment decision, and consult with an investment professional for advice and guidance regarding your personal financial situation.

If you currently own or are considering the purchase of commercial real estate, you are probably well aware there are a number of tasks that must be handled on a regular basis. Space has to be leased, rent collected, the property maintained, and repairs performed as required.

Many individual owners—especially those who own from one to a handful of properties—seem to prefer to manage these tasks themselves. But this often stems from a mistaken notion.

“It’s difficult for some commercial real estate owners to understand the value of professional property management,” said Buddy R. Parsons, president of Borelli Investment Company. “These owners may think, ‘Why should I pay people to collect rent checks, mow the lawn once a week, and do the occasional repairs?’ Not surprisingly, there’s a lot more to it than that.”

According to Parsons, the benefits of professional property management fall into three general categories:

• Protecting you against undue risks
• Reducing your operating expenses
• Increasing the value of your assets

Minimizing your Liability

All investments involve market risk—the possibility that an investment may decline, rather than increase, in value over time due to market forces. However, for commercial real estate investments, there are other concerns that can pose just as much risk to you.

To minimize this liability, professional property managers work to ensure that all parties involved with a property—you, your tenants, and any vendors who may provide maintenance services for the property—are adequately protected by insurance. Property managers take a systematic approach to reviewing these coverages—regularly checking to ensure that insurance remains in full force and effect, and has the proper coverages and endorsements to protect you in the event of loss.

In addition to managing your insurance, property management firms can offer owners the advantage of buying policies as part of a larger group of properties handled by the firm. The portfolio is bid on a competitive basis, and this can significantly decrease the premiums an owner might have to pay if buying insurance individually.

Reducing your Operating Expenses

When property owners handle their own repairs and maintenance, they often unwittingly assume a high degree of risk. To control costs, they may pay a handyman in cash, or search for the lowest-priced contractor. In many cases, they don’t cover maintenance people against accidents through workers’ compensation insurance, and they don’t insist on liability coverage to protect themselves against shoddy workmanship, delays or unfinished projects.

“These owners think they’re reducing the costs of managing their buildings, but it only takes one problem or accident to wipe out all the potential savings and a lot more,” Parsons explained. “They’re strictly relying on luck.”

Professional property managers reduce operating costs safely and methodically. These firms establish long-term relationships with highly qualified and reliable vendors that do all the needed work for repairs or upgrades. Because of these relationships, and the high volume of work these vendors receive, they often charge more favorable rates, as well as provide rapid response to “emergencies” such as a leaky pipe or a broken window—even after hours or on weekends. And, if a job isn’t done right, the property company’s history with the vendor ensures that you’ll get the satisfaction you deserve.

Property management companies also employ systems to collect rent on a timely basis, deal effectively with slow or missed payments, and reconcile the building’s operating expenses, so you can recoup your costs by charging each tenant a fair share.

Increasing your Asset Value

The third area where professional property managers provide substantial benefits is asset value.

First, a third-party manager looks at rents without the emotionalism of an owner-manager, who may feel “loyal” to his or her long-time tenants. The top-flight professional also doesn’t avoid raising rents due to a fear of losing tenants. Often, owners actually fight against rental rate hikes, believing that if rents are raised, tenants will leave, and their building or buildings will fail.

Actually, the opposite can be true. Experienced property managers know that if they have done a good job of analyzing the market and establishing fair-market rents, the loss of one tenant will easily be replaced by another—at higher, market rents. Achieving and maintaining the right level for rents is a key to enhancing a building’s long-term asset value.

Second, a professional property management firm should have an effective marketing group to advertise and promote its portfolio of properties to a large group of potential tenants, as well as commercial and residential brokerage firms. This creates higher demand, which leads to rising occupancy and better returns on your investment.

Borelli Provides Unmatched Property Management

For more than 50 years, Borelli Investment Company has provided a variety of real estate services to owners in the Silicon Valley and beyond. Among these is the first-rate, highly professional third-party property management that helps owners reduce risks, lower operating expenses and continually increase asset values over time.

Borelli often goes beyond traditional property management to provide complete asset management that includes:

• Investment analysis
• Land acquisition
• Construction
• Financing
• Development

“We participate in the really important decision regarding properties,” stated Parsons. “These decisions include how to leverage properties within a portfolio to provide the highest benefits, how and when to renovate or add onto properties, and when the time is right to dispose of a property. Many of our clients enjoy the real advantages of receiving professional property management within the larger context of comprehensive asset management.”

For the past three decades—through market upswings and downswings—Borelli has maintained a remarkable occupancy rate of more than 95 percent across its portfolio—which has grown to more than four million square feet valued at $500 million. Borelli has also been very successful at doing the little things that add up to make a big difference for owners.

“Many owners won’t bother to try to re-bill operating expenses to tenants,” Parsons commented. “Their reasoning is that it’s too complex and not worth the effort—plus, they think they can just ‘pack it’ into the rent. But the reality is a lot of money gets left on the table—the owner’s money. We have a very good track record of being able to apply systems to efficiently get this money from tenants, and it is often enough to completely pay for us as a property manager, while putting more money in our owners’ pockets and providing the many other benefits of professional property management.”

Borelli’s aim is to take the burden of property management off of you—the smaller individual owners—so you can enjoy your free time seeing the world or relaxing with friends, instead of worrying about leaky pipes or peeling paint. For more information about Borelli’s experienced, professional third-party property management services, contact Buddy Parsons at (408) 453-4700, or e-mail buddy@borelli-inv.com.

Higher sales prices, shrinkin inventories, and growing construction costs are creating urgency for business looking for commecial space

 5-4-3-2-1 Liftoff!  That thundering you hear is the sound of lease rates on Silicon Valley commercial real estate leaving the launching pad and climbing back toward sustainable levels.  No one expects rents to go through the stratosphere, but after being exceptionally low for the past five years or so, lease rates on commercial real estate are due for a significant rise.  Business owners and property investors who are sitting on the sidelines trying to time the market would be well advised not to wait any longer.

Let’s turn back the calendar a few years to understand what is going on.  Following decades of steady appreciation in property values and healthy rental levels, the dot-com explosion of the mid- to late-1990s sent commercial real estate rents through the roof.  The belief that almost any idea involving the Internet was a money-maker created a tremendous demand for commercial space in Silicon Valley by venture capital-based dot-com startups.

But as so often happens, when the dot-com bubble burst in 2001, the overheated market cooled off quickly, driving rents down. Enormous amounts of inventory—at one point as much as 60 million square feet of space by some estimates—stood vacant. It was a renter’s market; companies leasing space felt they had the upper hand in negotiations with property owners.

Today, there are clear signs the commercial real estate market has come back into balance, after the rollercoaster ride of the past decade.

• Lincoln Property just purchased the four-building, 15-acre former Acer Computer campus on Trimble Road in San Jose for $27 million—handing Apollo Real Estate a tidy $8 million profit on the property it had bought less than a year earlier for $19 million.
• A joint venture between Westbrook Partners and Four Corners Properties just laid out $94 million for Montague Park in San Jose, providing the previous owners a $19 million profit in just 15 months.
• Significant rent increases of up to 30 percent have taken place over the past 12 months—with the upward trend especially noticeable on incubator spaces of 5,000 square feet or smaller.

“The evidence is indisputable,” said Ralph Borelli. “Big real estate companies are buying again in Silicon Valley. The bottom of the market for commercial real estate in the Valley was most likely reached in 2004 or early 2005. The rebound began in earnest last year, and this is fueling the rise in rents now being felt throughout the Valley.”

Multiple Contributing Factors

What is causing the recent increases in property values and rents? In Borelli’s opinion, there are several contributing factors:

• Strengthening job market—According to the Association of Bay Area Governments (ABAG), the South Bay experienced significantly stronger job growth than had been expected in 2006, increasing by 1.8%. The San Jose area outperformed California and the nation, and in fact only trailed the combined San Francisco/San Mateo/Marin area and Solano County in the creation of new jobs last year. ABAG expects the upswing to continue in 2007, with the South Bay predicted to add another 11,500 jobs—many in the technology sector.
• Rapidly decreasing inventories—With the job market on the rise, planning departments have approved the conversion of obsolete commercial and industrial property into residential space. Perhaps 25 percent of the vacant standing inventory has been or will be torn down for new housing by leading homebuilders such as KB Home, according to Borelli. At the same time, big-name businesses such as Google, Yahoo, and Apple have collectively purchased millions of square feet of space over the past several years—effectively removing these buildings from the rental base. This has decreased the vacancy rate for office space from 20 percent or more to approximately 10 percent, according to CoStar Group, the number one provider of information services to commercial real estate professionals in the U.S. and U.K. Industrial and “flex” space still shows slightly higher vacancy rates, but is definitely trending lower.
• Limited land—The Valley floor is largely built out. Unlike in the wide-open Sacramento area or the Central Valley, Silicon Valley has natural geographic obstacles to growth—the foothills on either side of the Valley—placing a finite limit on where building can be done. Open space regulations have slowed growth on hillsides, and areas such as San Jose’s Coyote Valley are still being held for future development. With so little vacant land available, land prices can’t help but increase.
• Rising construction costs—The cost of construction has also risen. It is simply more expensive today to build buildings than it was a decade ago. And the cost of new construction is considerably higher than renovating existing commercial/industrial space.

Lynn Hawkins

Background: Brought 22 years of experience in commercial real estate and commercial mortgage banking to her position at Borelli Investment Company. Expertise included commercial brokerage and sales in the East and Southeast, including loan originations, underwriting, processing, servicing, and loan closings. As group vice president, managed loan portfolios as large as $6.5 billion encompassing nearly all 50 states. Born and raised in Baltimore, MD. Attended the University of Maryland with a concentration in computer science and business management.Held a broker’s license in GA, a sales license in VA, and is currently a licensed real estate salesperson in CA. Is active in numerous industry organizations including BOMA, NAR, the Mortgage Bankers Association, the National Association of Female Executives, and the Reebok Professional Instructor Alliance. Responsibilities: Handles every condominium transaction, from purchase contracting through escrow closings. At the Capitol Auto Mall, moves each deal from lease LOI to signing. Business Philosophy: “I am committed to achieving a win-win in every deal I  touch. Meeting the client’s objectives and expectations, and staying within the guidelines and  goals of the company, can be achieved through clear communication and a high level of professionalism.” Secret to Success: “Lynn focuses on providing personalized service and assistance  to our clients, from the moment they are going into contract until the close of escrow,” said  Tom Purtell, Borelli Investment Company’s chief operating officer. “In staying connected  throughout the process, Lynn always strives for the highest in customer satisfaction.”

Borelli’s Exclusive Lease vs. Buy Calculator

Borelli’s Exclusive Lease vs. Buy Calculator Right on the Money with Buyers

Perhaps you’ve heard about one of the hottest trends in commercial real estate: office condominiums. And perhaps you’ve wondered whether buying an office condominium might be the right move for you and your business. But how can you know for sure? How can you really “run the numbers” and compare buying versus continuing to lease your office space?Now there’s a fast, easy way to make a “real-world” comparison for your specific situation with Borelli Investment Company’s exclusive online Lease vs. Buy Calculator. Borelli’s Exclusive Lease vs. Buy Calculator Introduced in May, the Lease vs. Buy Calculator is available to anyone considering the purchase of an office condominium. You can easily do it yourself from the comfort of your home or office, or one of our professional sales representatives will be happy to walk through it with you.

“Deciding to buy rather than lease office space is a major financial decision,” said Tom Purtell, chief operating officer of Borelli Investment Company. “We wanted to ensure that our clients had all the tools they needed to make a well-informed choice. The Lease vs. Buy Calculator has been very wellreceived since we introduced it last spring.”To use the Lease vs. Buy Calculator, all you have to do is: Go to www.borelli-inv.com Click on the icon for “Lease vs. Buy? — Run the numbers” Select the Borelli office condominium property you’re interested in Select a specific unit for sale Enter the required information. This can include information about your current lease including size of your space, current rent, operating expenses, and scheduled rent increases; the purchase price, closing costs, and mortgage information for your proposed purchase; association dues and any other costs; your state and federal tax rates; and estimated annual appreciation. Then, click “Calculate”. In seconds, you’ll have a real set of numbers based on your specific situation that will help you make a more intelligent decision about whether to lease or buy your office space. “With summer coming to an end, now is the time to start doing your year-end tax planning,” Purtell noted. “If you want to be able to make any substantial moves to reduce your tax liability for 2007, there’s no time to waste. Purchasing property is one of the best ways to reduce taxes, while acquiring an asset that historically has appreciated over time—in good markets and bad. ” For more information about the Borelli Lease vs. Buy Calculator, contact your Borelli sales representative or Tom Purtell by calling (408) 453-4700, or you can e-mail tom@borelli.com.

Borelli Property Management Services Extend Beyond Silicon Valley

Borelli Investment Company is well-known for its high-quality property management services. Borelli’s professional property managers work closely with owners to set rents and efficiently lease space, maintain and improve properties, respond to tenant requests, and keep the books in good order. Clients know they can count on high occupancy rates and proper positioning to maintain value over time in up markets and downWhat you may not be aware of is that Borelli Investment Company provides its property management services not only here in Silicon Valley, but also in other markets throughout Northern California. A Growing Central Valley Portfolio One of Borelli’s hottest growth areas in recent times has been the Central Valley. Borelli now manages multiple properties in Tracy, Turlock, Stockton, Elk Grove, and West Sacramento—among other Central Valley towns and cities. The holdings include retail centers, a variety of office buildings, and industrial properties.

California’s Central Valley is experiencing rapid growth,” said Buddy R. Parsons, president of Borelli Investment Company. “Many of our clients are interested in taking advantage of the attractive ownership opportunities there. Once they have purchased a property, they need to work with someone they trust to manage it. We have the ability to minimize risk, reduce operating expenses, and increase the long-term asset value of properties located up and down the Central Valley.”A good example of the benefits Borelli provides can be found at the 250,000 square foot Countryside Plaza retail center in Turlock. When Borelli was selected as property manager in 2004, Countryside Plaza had not increased its lease rates in years. The prior owner had been hesitant to do so, because he was skeptical that rates could be raised without causing long-time tenants to move out. Borelli managed an increase in rents to market levels and maintained virtually 100 percent occupancy during the adjustment period. “It simply didn’t make sense to leave rental rates unchanged,” Parsons explained. “By acting on the owner’s behalf, we were able to negotiate appropriate increases for tenants without hurting the owner’s established relationships or negatively impacting occupancy. We have also begun a program of planned improvements to ensure that the center is always well-maintained and modernized.” Property Management Everywhere Wherever you decide to buy, contact Borelli if you need professional property management. For more information about Borelli’s professional property management services and pricing that pays for itself, contact Buddy Parsons at (408) 453-4700, or e-mail buddy@borelli.com.

 

Borelli Investment Company Begins Presales At Club Auto Sport in North San Jose

Innovative Concept Offers Commercial Condominiums with Concierge Services and an Exclusive Club for Car Enthusiasts

Some people who possess a true passion for auto racing or a love of vintage automobiles become serious car collectors. In the past, these growing collections have in turn created growing problems for their owners. Where does one store all these cars? Stashing autos at friends’ homes or in parking garages typically proves to be an impractical and expensive proposition.

Now, there is Club Auto Sport—Silicon Valley’s first purpose-built commercial condominium facility designed for racing and car enthusiasts—with a full line of timesaving concierge services and an exclusive club for owners.

The two-building, 120,000 square foot complex at 521 Charcot Avenue in North San Jose—which is being developed by a partnership led by avid car collectors and vintage racecar owners John Davis, Ralph Borelli and long-time local racecar driver, IRL and CART team owner, John Della Penna— will be undergoing $15 million in renovations. When completed, it will feature a clean high-tech design, 10,000 square foot state-of- the-art showroom and lounge area for watching televised motor sports events, a large conference room with audio and video conferencing, banquet and hospitality facilities, sophisticated electronic security with CCTV inside and out, and automated roll-up truck doors hidden from the street.

The Place for Auto Enthusiasts

Club Auto Sport promises to be a gathering place for fans of racing’s top Formula One, IRL, Champ Car, NASCAR, and other events—as well as dedicated car collectors. Condo owners will be able to store and care for their cars in the purpose-built units, getting together in the showroom or lounge to view some of the club members’ most notable cars on display or to cheer on their favorite drivers and race teams.

One of the biggest benefits of Club Auto Sport is the wide variety of services available to save time. Need to have one of your cars detailed, taken in for service, or filled up before you come to pick it up? Want your RV cleaned out, the tanks serviced, the refrigerator turned on, and the fuel and oil checked so it’s ready to go? Our “arrive-anddrive” services are for you. Plus, owners can have their cars delivered to their homes whenever they wish. All they have to do is call the Club Auto Sport concierge to arrange it.

Club Auto Sport’s banquet and hospitality facilities will be some of the best in the area, making the club ideal for charitable, political, corporate, or social gatherings of all kinds. Ample onsite parking will accommodate up to 100 cars outside the security gates for visitors. The complex’s central location in the Golden Triangle makes it easily accessible for owners and invited guests via I-880 or Hwy 101 or 237, or even flying in to Mineta San Jose International Airport—five minutes away.

“Club members will be able to participate in organized automobile and racing-related activities,” noted John Davis, founder of Air Systems, Inc. and president of Davis Motorsports. “These could include instructional track driving days, touring events, celebrity guest appearances, dinners, or high-profile charity events.”

Benefits of Condominium Ownership

Buyers at the Club Auto Sport condominium complex can purchase as much or as little space as needed, with units from 800 to 10,000 square feet. The smallest units will accommodate up to 4 cars, and more if stacking systems are used. All units have full-height demising walls, with built-in ventilation systems. The complex meets the strictest building codes, including the latest fire protection systems. Owner amenities can include private bathrooms (in addition to the building’s common restrooms with showers), kitchens, offices, and more. Utilities are Borelli Investment Company Begins Presales At Club Auto Sport in North San Jose Innovative Concept Offers Commercial Condominiums with Concierge Services and an Exclusive Club for Car Enthusiasts A members-only club for your car. And you. separately metered, and individually climatecontrolled condos are available. Borelli Investment Company, the developer of the project, is also offering turnkey units with standard or customized interiors.

Because owners are purchasing space—not leasing it—they receive a number of benefits: • Quick, but secure 24×7 access to vehicles • Control over occupancy costs • Ability to customize the space in any way desired, subject to Club Auto Sport bylaws • Potential long-term appreciation

“Plus, if the space is being purchased as part of a business, owners enjoy significant tax write-offs,” Borelli commented. “These benefits include cost segregation, the $112,000 Section 179 tax incentive, interest deductions, and other write-offs.”

Construction won’t start until early fall, with the first units available in late spring of 2008. However, presales are already underway, with Phase I approximately 30 percent sold out.

Club Auto Sport is truly a new concept in commercial condominiums, with Borelli Investment Company, a trendsetter in business condominiums, guiding the development.

“People who are passionate about auto racing and car collecting have had few options in the past,” remarked John Della Penna, of Della Penna Motor Sports. “Club Auto Sport is a unique place for cars—and their owners.”

For more information about Club Auto Sport, contact Ralph Borelli at (408) 453-4700, or e-mail ralph@borelli.com.

Local Commercial Real Estate Market Largely Unaffected by Residential Difficulties

Vacancy Rates and Late Loan Payments Among Lowest in 5 Years

Tighter Money Creating Some Challenges

Unless you have been stranded on a desert island lately, you are no doubt aware of theturmoil that has been created in the residential real estate market by the relatively large numbers of nonprime mortgages that have defaulted over the past              year. The difficulties have impacted home loan borrowers, lending institutions, investors in subprime mortgage securities, and the various financial markets themselves. But what has remained largely untouched todate has been commercial real estate. Even with the recent announcement that the deal to buy Carl Berg’s $1.8 billion Mission West Properties’ portfolio of commercial real estate had fallen through due to the inability of the prospective buyer  to secure financing, the commercial real estate market remains strong and largely untroubled.

“Thus far, the fallout from the subprime residential loan crisis appears to have had a limited effect on the local commercial real estate market,” said Edwin K.S. Ryu, principal and co-founder of Legacy Wealth Advisors, LLC, a San Jose-based investment advisory and wealth management firm.

Underpinnings Still Strong In examining the commercial real estate market, virtually every pillar supporting the industry in Silicon Valley remains solid. Recent earnings reports by Silicon Valley leaders such as Cisco Systems and Apple have been almost uniformly positive. Unemployment rates in the Valley have been trending steadily downward, even as job creation rates have been rising. The conversion of older R&D and industrial space into residential space in large areas of the Valley coupled with comparatively little new construction the past few years has resulted in a shrinking supply of commercial space. Increasing demand in the face of a decreasing supply has led to significant declines in commercial real estate vacancy rates in Silicon Valley, according to a Grubb & Ellis report. Vacancy rates for the Valley as a whole have broken through the 10 percent threshold for the first time in several years, spurring the construction of new office space. In the meantime, according to the same Grubb & Ellis report, lease rates for premium Class A commercial space rose nearly 6 percent in the most recent quarter, while lease rates for Class B space have increased approximately 3 percent. Clearly, this is not the case for residential property, where recent defaults have driven home prices considerably lower, and reduced loan availability as lenders try to increase liquidity as quickly as possible.

What It All Means While taking a wait-and-see approach or making low offers on desired properties may be a viable approach in the current residential real estate market, it is not likely to be a successful strategy in commercial real estate in Silicon Valley, according to Ryu—who was recently selected as one of the top 150 financial advisors to doctors in the nation by Medical Economics magazine. “Value comes from scarcity, and there is only so much commercial real estate available here in Silicon Valley, perhaps the choicest place in the world to do business,” Ryu remarked. “There will continue to be cycles, which we need to understand and respect. But in the long run, I view the overall market as a bullish one.” For further details or to review the latest commercial real estate information, contact Borelli Investment Company at (408) 453-4700, or e-mail info@borelli.com.

Silicon Valley Commercial Real Estate Market              at a Glance 5.67 – 6.76 million sq. ft.: range of 2006 qrtly. gross absorption 1 5.71 million sq. ft.: 1st qtr. 2007 gross absorption 1 $2.2 billion of venture capital invested in 1st qtr. 2007 2 21,500 new jobs added in 12 mos. ended 3/30/07 1 4.4% unemployment rate in 3/07, down from 4.6% in 2/07 1 .03% delinquency on comml. real estate loans, lowest in 5 yrs.3 Less than 10% vacancy rate on comml. real estate4 6% increase in rental rates on Class A office space4 3% increase in rental rates on Class B office space4 Sources               1 Colliers International 2007 1st Quarter Report               2 Dow Jones Venture Capital               3 California Mortgage Banker Association               4 Grubb & Ellis

Staff Spotlight: Mike Kronzer and Joe Vieira

This issue of the Insider features two of Borelli’s newest property managers, Mike Kronzer and Joe Vieira. Both men bring an extensive background in managing family real estate holdings to Borelli Investment Company. This makes them an ideal fit for Borelli’s long-time property management philosophy that it manages real estate for third-party owners as if it owned the property itself.

Background:Mike — Has been a real estate broker and commercial property manager since 1992. Prior to joining Borelli, was responsible for more than 300,000 sq. ft. of office, R&D, and manufacturing space in Los Gatos and Campbell. Born and raised in Silicon Valley, Mike is a graduate of San Jose State University.

Background:Joe — Is a life-long resident of the Santa Clara Valley, who graduated from Bellarmine College Preparatory in San Jose and St. Mary’s College in Moraga. Was part of a public accounting firm for more than a decade, and also served as director of finance and administration with a major labor union, which covers four Western states and represents more than 40,000 members.

Responsibilities:Mike and Joe will both be responsible for managing and maintaining commercial properties in Borelli’s four million square foot portfolio to maximize their asset potential, while responding promptly and efficiently to tenant needs. Joe specializes in retail properties and uses his background as a CPA to maximize the ROI for owners. Mike efficiently manages a broad cross-section of properties in office, R&D, and industrial categories.

Business Philosophy:“We are committed to helping property owners and investors provide a safe and comfortable environment for tenants, stay within budgets, and generate the highest possible returns for their investment.”

Secret to Success:“We focus on providing personalized services and assistance evaluating and selecting properties, obtaining favorable lease terms, maximizing tax advantages, minimizing expenses and turnover, managing operations, and maintaining properties at their highest and best uses,” said Mike.