Archives for June 2005

Company Profile at a Glance

History Summary of Borelli Invesment Company

  • 1955 — Nelo and Victor Borelli started company as a diversified Real Estate Brokerage and Development Company.
  • 1957 — Built its first tilt-up industrial building in Santa Clara which was the start of the property management and development division.
  • 1965 — Developed Borelli Industrial Park in Santa Clara which inspired the naming of Nelo & Victor Streets and Aldo Avenue.
  • 1973 — Ralph obtained license and joined N.G. Borelli Realtor at 19 years old.
  • 1977 — Ralph became President when Nelo retired.
  • 1979 — Ralph directed the formation of Borelli Investment Company’s first syndicated partnership to acquire multi-tenant industrial and office properties.
  • 1981 — Ralph and Phil Burke form Borelli & Burke.
  • 1984 — Ralph Borelli named Outstanding Investment Broker by San Jose Chamber of Commerce.
  • 1986 — Burke leaves company and firm changes name to Borelli Investment Company.
  • 2003 — Borelli Investment Company awarded Largest Property Management Firm by the Business Journal.
  • 2004
    • Ralph N. Borelli named the 2004 Land Broker of the Year by the Association of Silicon Valley  Brokers (ASVB).
    • On October 27, 2005, Ralph Borelli and Borelli Investment Company handled seven land transactions  representing 127 acres and worth $56 million to be awarded the Business Journal’s Structures Award for 2004 Land Deal of the Year.
  • 2005
    • Celebrates 50 years in business. Management portfolio grows to approximately 70 properties with 30 employees and a portfolio of nearly 4 million square feet (valued in excess of $750,000,000) and 1,000 tenants.
    • Ralph was awarded 2 commendations for making a mark on the community: the first was in celebration of the company’s 50 years in business and the second for the generous support of the inaugural San Jose Grand Prix.
  • 2006
    • June – Borelli Restructures – Buddy Parsons becomes President; Tom Purtell becomes Chief Operating Officer.
    • September – Borelli moves (pdf) – Borelli office moves from Technology Dr. to Junction Ave., into own Junction Office Condos.
    • November – Junction has sold over 55% of Office Condos.

Borelli Investment Company Celebrates 50th Anniversary

Borelli Investment Company Celebrates 50th Anniversary
Local commercial real estate firm follows proven formula: focus on quality and value, avoid short-lived trends, and consistently deliver superior service

San Jose, California, June 8, 2005 (view photos) — In 1955, Nelo G. Borelli started a small real estate company to serve the Santa Clara Valley . The valley was a vastly different place in those days. Apricot and prune orchards blanketed much of the valley floor and surrounding foothills. The City of San Jose was a regional hub of commerce. Palo Alto was just a nice college town, while Los Gatos and Saratoga were viewed as out in the country — not the upper income suburban communities they are today. And only a few of the companies that would transform this area into the world-renowned Silicon Valley had been started.

To build its business, N.G. Borelli, Realtor offered a wide array of services: residential and commercial development, brokerage, and land sales — whatever was required. With a staff of five or six people, Nelo Borelli built personal relationships that helped the business grow, always insisting on superior service for his clients.

Not quite 20 years later, Ralph Borelli joined his father’s firm as a broker, while he was still in college. After a few years of learning the business, Ralph was ready to step up to run Borelli Investment Company when his dad retired in 1977.

“I had been around real estate all of my life,” Ralph Borelli, CEO of Borelli Investment Company said. “The valley was an exciting place to be in the commercial real estate business during the Silicon Valley boom, and we had to be fast on our feet to succeed.”

Avoiding the R&D Temptation

During the 1970s and 1980s, Borelli Investment Company began to grow quickly. Under Ralph’s direction, the company wisely focused on multi-tenant office and industrial buildings, avoiding the glamorous R&D development that eventually proved to be the undoing of many firms.

“We were smaller compared to the large national developers,” Borelli explained. “Even if we had wanted to play in the market segment, it would have been difficult for us to compete. In addition, R&D got so overbuilt that we didn’t think it was a good place for investors in our syndicated real estate offerings, and we didn’t want to be there as a company either.”

Borelli Investment Company’s instincts proved correct, and as other commercial real estate companies — developers, contractors, and brokers — struggled when the boom ended, Borelli Investment Company has enjoyed consistent growth.

Over time, Ralph Borelli expanded the firm’s capabilities beyond commercial real estate development and consulting for sales and leasing. The company built a very successful property management portfolio, with more than four million square feet of space valued at $750 million under management. In 1979, Borelli directed the formation of Borelli Investment Company’s first syndicated partnership to acquire multi-tenant industrial and office properties. To-date, the company has formed over 30 partnerships delivering long-term returns to investors.

Land Repositioning and Sales

Another Borelli Investment Company specialty is land sales. The company has the expertise and depth of experience gained from handling a wide variety of land transactions over the years. These range from relatively simple purchases of vacant land to build retail centers or office projects from Sacramento to the Central Valley , to a complex repositioning of commercial property in the heart of Silicon Valley to enhance value. The Association of Silicon Valley Brokers (ASVB) recently honored Ralph Borelli as 2004 Land Broker of the Year.

“In Silicon Valley , most of the prime land is gone,” said Borelli. “You won’t find large developable parcels without zoning restrictions or other issues, just waiting to be built upon. As a result, land sales often involve tremendous creativity to assemble numerous smaller pieces of land into a larger parcel, reposition a property, obtain necessary zoning changes and variances, oversee architectural reviews, or provide infrastructure improvements. We enjoy taking on those challenges.”

One of the company’s biggest land transactions was a 125-acre, $30 million sale for KB Home on Communications Hill in San Jose . Consisting of seven smaller parcels with multiple owners, the transaction required a decade to put together and obtain all the required approvals. Today, KB Home’s Tuscany Hills is a community of three neighborhood parks and more than 700 residential condominiums, townhomes, and single-family homes.

Business Condominiums

Borelli Investment Company is also leading the way in a growing market for office and industrial condominiums. Office condominiums, which provide small businesses with accelerated deductions, tax incentives, and the potential of long-term appreciation, are proving to be especially popular for many small start-ups, professional firms, travel agencies, and a wide range of other service businesses.

The company’s Ringwood Business Center —a 47-unit, 3-building, 73,000 square foot business condominium complex, is 80 percent sold or in escrow only six months after opening. “There simply are a large number of compelling reasons for businesses of almost any size to take advantage of the benefits of property ownership,” noted Borelli. “Business condominiums make this a reality.”

Expanding Horizons

Today Borelli Investment Company provides real estate asset management services, construction management for tenant improvements and new development, and bonded court-appointed receiverships for properties involved in legal proceedings. Over time, the company has also broadened its horizons and extended its reach into other markets beyond Silicon Valley , including the Peninsula, East Bay, Sacramento, and the fast-growing Central Valley .

“Our business has been built on a straight-forward philosophy,” Borelli stated. “We always try to deliver high quality and excellent value. We stay away from overheated, trendy segments of the marketplace. And we empower our people to make decisions, so that they can provide superior service to clients—completing transactions and meeting clients’ needs and expectations.”

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. A chronological summary of Borelli Investment Company’s history is also available. 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

Ralp Borelli awarded Commendation from Cit of san Jose by David Cortese, Councilmember

City of San Jose Presented to Ralph Borelli

On June 8, 2005, Ralph Borelli was awarded a Commendation by the City of San Jose. Councilmember David Cortese presented the award to Ralph Borelli at the celebration of the Borelli Investment Company’s 50th Anniversary of being in business. The City of San Jose wanted to acknowledge the influence of the Borelli Investment Company upon the city over the past 50 years.

The following is written on the Commendation:

WHEREAS: Fifty years ago, Mr. Nelo G. Borelli founded a small real estate company to serve the Santa Clara Valley called the Borelli Investment Company which has since then grown immensely, focusing on commercial real estate services and providing space for business opportunities; and

WHEREAS: The Borelli Investment Company was instrumental in planting the seeds of what is now the world renowned “Silicon Valley,” opening the doors for booming business in and around the City of San Jose; and

WHEREAS: In doing so, the Borelli Investment Company has established themselves as industry leaders, paving the way for other companies to follow and they have brought great honor to the City of San Jose;

NOW, THEREFORE I, Councelmember Dave Cortese along with my fellow colleagues on the San Jose City Council, on this 8th day of June, 2005 do recognize and commend.
BORELLI INVESTMENT COMPANY
for its fifty successful years of service to the community and we wish them many more successful years of business.

Signed by David Cortese, Councilmember

Attested to by: Lee Price, Clerk of the City of San Jose

A Less-Taxing Way to Own Office Space

Lease vs. Buy

The traditional way for most small to mid-sized businesses to acquire needed office or industrial space is leasing. Larger companies have the buying power to purchase business property in order to better control their occupancy costs — but smaller companies have long been subject to rent increases caused by economic fluctuations over time.

In today’s California real estate market, including here in the Silicon Valley, a second option is emerging. A growing number of developers and building owners are offering business condominiums, with office or industrial space that can be purchased on a much smaller scale than acquiring a complete building. Still, for many small businesses with modest cash reserves, making a down payment on the purchase of business space may seem beyond their reach.

Thanks to a little-known accounting practice called cost segregation, which has been accepted in the past by the IRS — together with outstanding tax benefits offered by the 2003 Jobs and Growth Tax Relief Reconciliation Act — any business owner can now consider the possiblity of owning, rather than leasing, business space.

Tax Benefits

Cost segregation pays dividends It starts with real estate cost segregation, a smart way to accelerate the depreciation on business property. In simplest terms, cost segregation lets you recover certain building costs over fifteen, seven, or even five years, rather than depreciating the entire value of a building-minus the land cost-over the standard 39 years.

The cost segregation method has only been available for the past few years, with the sophisticated analyses primarily used by large corporations that understood the highly favorable tax implications. Today, even the smallest businesses can use the accelerated depreciation that cost segregation makes possible to save thousands of dollars in taxes. When combined with special tax incentives available only through 2004 (unless extended by Congress), these savings can sometimes be as large or larger than your down payment.*

In this case, there can be no reason not to buy!

Cost segregation accounting practices and special limited-time tax incentives have made it more affordable for businesses of all sizes to own their office or industrial space. Download our white paper to learn more.

Tax Incentives Expiring Soon           

Among the 2003 Tax Act incentives are:

  • Section 179 Deduction-Business owners can take a deduction of up to $100,000 in accelerated depreciation on business property in the first year in which a building is placed into service. This $100,000 deduction will be reduced to only $25,000 after 2005.

When combined with cost segregation, these special tax incentives can easily add up to tens of thousands of dollars for the typical buyer-which puts owning within the reach of virtually everyone. A close examination of our “Lease vs. Buy” analysis will show you exactly how these benefits can add up. Of course, you’ll want to consult your tax professional about your specific situation to learn how these benefits might apply to your purchase.

Long-term Appreciation

Real estate has always been a valuable asset for many successful corporations. The long-term appreciation potential can add substantially to the value of a business.

Today’s unique tax advantages and attractive financing options put ownership within the reach of more small businesses than ever before.

Please read our PDF document called “A Less-Taxing Way to Own Business Space” to find out more about cost segregation and how owning your own office or industrial space can be a smart financial move for you and your business.

* The above discussion does not take into account every tax situation for all businesses or individuals. Not all tax laws have been considered-for example, passive loss and at-risk rules or alternative minimum tax (AMT) requirements could alter the tax benefits. Business owners should contact a tax advisor before making buying decisions.