Madrone Business Park Still a Hot Property
Silicon Valley Companies View Development as Strategic Move

MORGAN HILL - As other office complexes around the Bay Area feel the crunch of Silicon Valley’s cooling economy, one business park continues to sign leases before the final building is constructed. With 660,000 square feet of buildings already under construction, Madrone Business Park recently added San Jose-based Paramit Corp. to its list of tenants. The company wants to expand its facilities and take advantage of Madrone’s affordable leasing rates.

"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."

Toeniskoetter & Breeding, Inc.-Mission West, LLC, a partnership between TBI and the real estate investment trust (REIT) associated with The Berg Group of Cupertino, owns the Madrone Business Park. Carl Berg has been an investor with Toeniskoetter & Breeding, Inc. since 1983, with the Madrone Business Park being their latest venture.

Paramit has signed a deal for 150,000 square feet build to suit at the development, which is located north of Cochrane Road between Highway 101 and Monterey Highway. Construction on a 160,000 square-foot headquarters campus for San Jose-based Condor Systems is already underway at the site.

"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 many of their employees will eventually live near the city or in areas to the south. The balance will benefit from a reverse commute."

TBI Development is proceeding with construction of two speculative office/R&D buildings totaling 100,000 square feet and a 400,000-square-foot campus for The Media Arts Group, Inc. TBI expects to complete the business park’s streets and utilities by the end of May.

Also in Madrone Business Park, construction is underway on a Courtyard by Marriott, a Marriott Residence Inn 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 by fall, 2001.

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.