TBI ACQUIRES THREE CAMPBELL BUILDINGS

Toeniskoetter & Breeding, Inc. Development has acquired three adjacent office buildings located between Winchester Boulevard and Camden Avenue in Campbell. The three one-story buildings at 743, 745 and 747 Camden Ave. total 61,056 square feet and were acquired from a partnership owned by the family of the late Howard J. White III, Vice President Dan Amend of TBI Development announced.

DAN AMEND NAMED DIRECTOR OF CHILDREN’S DISCOVERY MUSEUM

Daniel T. Amend, Vice President of Toeniskoetter & Breeding, Inc. Development (TBI Development), has been appointed to the Board of Directors of the Children’s Discovery Museum. Mr. Amend also has joined the museum’s Committee on Exhibits & Programs, which is developing the “Art Loft,” a new art studio for children 4 to 10 years old for which TBI is making a significant contribution.

START-UPS DRIVING SCOTTS VALLEY LEASING MARKET
TBI Development, brokers see office market strengthening

SCOTTS VALLEY – Following a period when virtually nobody was looking for office space in Santa Cruz County, Toeniskoetter & Breeding, Inc. (TBI) Development has signed three leases totaling nearly 37,000 square feet in Scotts Valley.

“For 18 months the leasing market in Scotts Valley was at a virtual standstill,” said President Brad Krouskup of TBI Development. “Companies began looking around again about four months ago, and the market appears to be gaining strength.”

Steve Sheldon, a broker with BT Commercial Real Estate in Santa Cruz, said the depth of the recession seems to have run its course.

Matt Shelton, a broker with J.R. Parrish in Santa Cruz, attributed the growing activity to technology entrepreneurs forming new companies more than expansion by established companies. Brokers are expecting a fairly healthy spring, he said.

TBI Development leased 22,843 square feet at 5617 Scotts Valley Drive to Cisco Systems for five years. The San Jose-based Internet networking company had previously leased this space in the Granite Creek Business Center and elected to remain after a site search that included up to a dozen other Silicon Valley locations, Krouskup said.

ESS Technology, Inc., a Fremont-based supplier of chips for DVD and digital entertainment markets, leased 9,945 square feet of space in the Granite Creek Business Center on Scotts Valley Drive for three years to house its Digital Imaging Division. The division is developing technology related to picture phones.

Adara Networks, an emerging technology company focused on application level routing, leased 4,200 square feet of space from TBI Development for five years at 10 Victor Square.
Sheldon, the B.T. Commercial broker, said a weeding out process among weaker dotcom companies that began when the technology bubble burst has run its course. “The market reached bottom, and leasing is picking up again,” he said.

Downtown Santa Cruz and Scotts Valley constitute the core office markets in the county, and Sheldon said businesses usually consider both when seeking space. While most companies today are not leasing large amounts of space, they are actively relocating and expanding, he said.

Shelton of J.R. Parrish said tenant interest began picking up last summer, business representatives started visiting empty buildings over the holidays, and now they are beginning to sign leases.

“There are a lot of people forming companies to develop new technology,” Shelton said. “Their companies are in the market for space and will begin hiring after they find it. I received a call today from a man who had started two companies since we last talked five years ago and is now starting another one and wants to be located in the Santa Cruz area. In the beginning the process of recovering from a recession is relatively slow, but in several months, these startups will have products and sales. It’s exciting to be living in these times.”

Start-up companies have historically and currently been major users of office and R&D space in Scotts Valley and Downtown Santa Cruz. The local operations of large companies often are the result of acquiring these young companies. Cisco Systems, for example, acquired TGV Software, Inc., which was located in downtown Santa Cruz and expanded to the Granite Creek Business Center. Nokia bought Network Alchemy in Santa Cruz and continues to lease 60,000 square feet of space. Just last June, ESS acquired Pictos Technologies, Inc., whose operations are now part of the Digital Imaging Division in TBI’s Granite Creek Business Center.

Krouskup said the new leases leave about 70,000 square feet of TBI Development office space available in Scotts Valley and bring the total occupancy rate of TBI’s portfolio of 1.7 million square feet to 95%. This occupancy rate is among the highest of any major portfolio in Silicon Valley, where as much as 60 million square feet of space is thought to be available for lease or sublease.

Founded in 1983, TBI Development has developed more than 2.5 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, the adjacent, 30-acre Cochrane Business Ranch and the properties in Scotts Valley, TBI holdings include 450 West Santa Clara Street, O’Connor Health Center and the western headquarters for Integrated Circuit Systems, all in San Jose; and Gateway Square in Campbell.