HALF MADRONE BUSINESS PARK UNDER CONSTRUCTION WITH SIGNING OF NEW LEASE BY CONDOR SYSTEMS

MORGAN HILL -- The signing of a lease for a new headquarters for Condor Systems and other development activities have resulted in half the 110-acre Madrone Business Park being committed only a month after ground-breaking. By the end of the year, 660,000 square feet of buildings will be under construction. Madrone Business Park has more building space under construction at one time than ever before in Morgan Hill.

"Leasing activity is very strong," reported Brad Krouskup, President of Toeniskoetter & Breeding, Inc. (TBI) Development. "Most of the companies with whom we are talking are already located in Silicon Valley and are seeking to consolidate, expand or relocate. They range from businesses seeking space in multi-tenant buildings to those looking for multiple buildings in a campus environment."

Streets and utilities are expected to be completed by the end of February in the business park, which is located north of Cochrane Road between Highway 101 and Monterey Highway. Krouskup said TBI Development is in the final stage of negotiations with Verizon Communications for construction of a state-of-the-art fiberoptic data and voice system that will qualify Madrone for Verizon's "Smart Park" designation.

Condor Systems, Inc., a San Jose-based manufacturer of products for signal collection and analysis, has signed a lease for a 160,000-square-foot headquarters campus. Simultaneously, TBI Development is proceeding with construction of two speculative office buildings totaling 100,000 square feet and the Media Arts campus totaling 350,000 square feet. A total of 11 buildings are already under development or construction in the park.

Condor Leases 10 Acres

Condor Systems has leased two buildings on 10 acres at the intersection of Madrone Parkway and what will be an extension of Butterfield Road. Dennis Kobza & Associates of Mountain View has designed a two-story, 120,000-square-foot headquarters/office building and an adjacent, single-story 40,000-square-foot research and development building.

Founded in 1980, Condor Systems develops and produces a variety of electronic warfare products for the military and intelligence communities. It employs 400 people and is currently based at 2133 Samaritan Drive in San Jose.

The Condor Systems buildings will be owned by Toeniskoetter & Breeding, Inc.-Mission West, LLC, a joint venture between TBI and the real estate investment trust (REIT) associated with The Berg Group of Cupertino. Toeniskoetter & Breeding, Inc. Construction expects to start the buildings in December and complete them by summer, 2001.

TBI Construction will begin work next month on 60,000-square-foot office buildings, a 40,000-square-foot R&D building and a 127,000-square-foot production and distribution building for Media Arts, which manufactures and market products based on the works of artist Thomas Kinkade and others. These three, adjacent buildings will be located on Madrone Parkway east of the Condor Systems headquarters. Work is also proceeding on two other Media Arts buildings, for production and the corporate headquarters.

Two Marriott Hotels

Construction has begun on a Courtyard by Marriott, a Marriott Residence Inn, a free-standing restaurant and a Chevron Service Station, all of them being developed by Tharaldson Development of Sacramento. The service station is expected to be open in the spring and the hotels and restaurant by fall, 2001.

Work is also proceeding on two other Media Arts buildings, for production and the corporate headquarters, bringing the total for the company to 350,000 square feet.

To support the Madrone project, which requires more than 100 construction and other employees, San Jose-based Toeniskoetter & Breeding has assembled a TBI South headquarters in portable buildings. TBI Vice President Gary Dam serves as project manager and Carlos Posadas general superintendent. They are assisted by three other superintendents, Paul Brucker, responsible for roads and public utilities; Rod McCracken, two Media Arts buildings; and Phil Wolz, one Media Arts building and the two TBI-Mission West speculative research and development buildings..

Employees Moving South

"With a reverse commute from the north and little traffic congestion from the south, Morgan Hill has become an extremely attractive Silicon Valley location," Krouskup said. "Many employers locating here assume that most of their employees will eventually live near the city or in areas to the south."

Founded in 1983, Toeniskoetter & Breeding, Inc. Development has developed more than 1.5 million square feet of buildings and serves as managing general partner for a number of diversified real estate properties throughout Santa Clara and Santa Cruz counties. Previous projects include the 30-acre Cochrane Business Ranch, which is adjacent to the Madrone Business Park; 450 West Santa Clara Street, the O'Connor Health Center and the western headquarters for Integrated Circuit Systems, all in San Jose; Gateway Square in Campbell and Granite Creek Business Center in Scotts Valley.

Created in 1998 and based in Cupertino, Mission West Properties is a self-managed, self-administered and fully integrated real estate investment trust (REIT) engaged in the management, leasing, marketing, development and acquisition of commercial R&D properties, primarily in Silicon Valley. Mission West Properties includes substantially all of The Berg Group's operating properties, which currently total 5.31 million square feet of buildings, and it has the right to acquire current development and future projects completed by The Berg Group. Mission West Properties is listed on the American and Pacific Coast exchanges under the symbol MSW.