TOENISKOETTER & BREEDING DEVELOPMENT, MISSION WEST REIT FORM RELATIONSHIP TO BUILD BUSINESS CENTER IN MORGAN HILL

Toeniskoetter & Breeding, Inc. (TBI) Development and The Berg Group in conjunction with Mission West Properties, a publicly traded real estate investment trust (REIT), have formed a partnership to create a 110-acre business park. The partnership, TBI-Mission West LLC, will develop the new Madrone Business Park in Morgan Hill. The business park will extend from Highway 101 to Monterey Road at Cochrane Road, and it will border on two sides TBI Development’s existing and fully developed 30-acre Cochrane Business Park.

Madrone Business Park will accommodate 1.5 million square feet of commercial and industrial space; a Courtyard by Marriott and a Marriott Residence Inn; two free-standing restaurants and a Chevron Service Station. A 300,000-square-foot build-to-suit corporate campus is planned in the portion of the property nearest Highway 101.

TBI-Mission West has received required zoning and permits from the City of Morgan Hill and is forming an assessment district to construct two miles of roads and other infrastructure improvements. The first buildings are expected to be completed early next year, and full development within five years.

“This partnership marks the beginning of an expanded relationship between The Berg Group, Mission West Properties and TBI Development,” Brad Krouskup, president of TBI Development, said. “Our companies share a common philosophy of developing and holding real estate as a long-term investment. Although Carl Berg has previously participated as a financial partner in TBI developments, the Madrone Business Park strengthens our existing relationship.”

Carl Berg, principal of The Berg Group and Mission West Properties, said the new partnership culminates a 20-year relationship with Toeniskoetter & Breeding, Inc.

“We’re very excited about doing this venture with them,” Berg said. “We feel that South San Jose and Morgan Hill will be exciting growth areas over the next five to seven years.”

City Very Supportive

Morgan Hill Mayor Dennis Kennedy said the city gladly provided zoning changes
required for the Madrone Business Park.

“Morgan Hill’s goal is to provide a balanced community with a strong economic base as well as a variety of housing choices,” Kennedy said. “We recognized that recent economic growth had left us with an insufficient amount of improved commercial property, and the Madrone Business Park will help meet this need.”

The Madrone Business Park includes 78 acres of grazing land previously owned by the Gomes Investment Trust, 20 acres of land owned by the Madrone Land Corporation and 10 acres of the former San Jose Trap and Skeet Club. The Tharaldson Development Company of Sacramento will build the two Marriott hotels near the intersection of 101 and Cochrane Road where Sullivan’s Last Stand previously sold fruit and fast food to travelers. The business park will be accessed by a new Madrone Parkway that will extend from Monterey Road to Cochrane Road just west of the freeway.

Mission West Properties

Created in 1998 and based in Cupertino, Mission West Properties is a self-managed, self-administered and fully integrated real estate investment trust 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. In addition to the Madrone Business Park, these projects include a 515,000-square-foot, five-building campus to be built in Mountain View to house Microsoft’s Silicon Valley headquarters, as well as headquarters for its Web TV and Hot Mail divisions. Mission West Properties is listed on the American and Pacific Coast exchanges under the symbol MSW.

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. In addition to the Madrone Business Park and Cochrane Business Ranch, the company is developing an office building of classical architecture across from the San Jose Arena at 450 West Santa Clara Street. Previous developments include the 52,000- square-foot O’Connor Health Center in San Jose, 70,000-square-foot western headquarters for Integrated Circuit Systems in San Jose, 38,000-square-foot retail and medical office complex named Gateway Square in Campbell, 93,000-square-foot Granite Creek Business Center in Scotts Valley and the historical restoration and award-winning office complex at 1960 The Alameda.

Many of these buildings have been developed with partners that include publicly traded companies, family property owners, individual investors and company tenants. Toeniskoetter & Breeding, Inc. Construction will be constructing the buildings in the new Madrone Business Park, and Toeniskoetter & Breeding Property Management will provide property management support.