MADRONE VILLAGE SHOPPING CENTER OPENING

Toeniskoetter & Breeding Inc. Development (TBI Development) will open the first phase of the 80,000-square-foot Madrone Village Shopping Center, President Brad Krouskup announced. The four initial businesses there will be South Valley National Bank, Peet’s Coffee & Tea, FedEx Kinko’s and Chipotle Mexican Grill. Together the four will occupy more than half the space in the four-building, 28,000-square-foot first phase.

TOENISKOETTER & BREEDING DEVELOPS THIRD PARTY MANAGEMENT NICHE

CAMPBELL, California  –- Toeniskoetter & Breeding, Inc. Development demonstrated the expertise it offers third-party property owners this summer by moving Barracuda Networks, a rapidly rising creator of spam firewalls and web filters, into a new headquarters in Campbell. Barracuda moved into a 61,000-square-foot building at 3175 Winchester Ave. managed by Toeniskotter & Breeding Development for the Bryan Family Partnership.

Barracuda Headquarters in Campbell, CA

Barracuda’s new headquarters is in one of four buildings totaling 241,475 square feet that the Bryan Family Partnership asked Toeniskoetter & Breeding Development to manage in 2005, reports TBI Development Senior Vice President Dan Amend. The building had been occupied by PCOM Networks, but PCOM was experiencing financial difficulty and no longer needed most of the space. To help PCOM and free the Campbell space for another user, Toeniskoetter & Breeding Development offered to relocate PCOM to another of the Bryan Family buildings, a 19,219-square-foot, single-story structure at 1996 Lundy Ave. in San Jose. While the proposed reduction in rent wasn’t enough to save PCOM from eventually declaring bankruptcy, the market for selling owner-occupied buildings of that size was extremely strong. TBI Development placed the Lundy Avenue building on the market and received multiple bids. The Bryan Family Partnership sold it to AnaLeasing llc for use by AnaCom Computer Co.

As part of the Barracuda Networks lease, Toeniskoetter & Breeding Development agreed to upgrade the landscaping, paint the exterior, remodel the lobby and restrooms and demolish and replace the out-of-date interiors. TBI Construction & Construction Management, Inc. did the construction, which raised the building to Class A offices. Toeniskoetter & Breeding Development continues to manage the building.

Special Relationships Only

While Toeniskoetter & Breeding Property Management has more than 2 million square feet of space in its portfolio, the company provides third-party services only for individuals, partnerships or organizations with which it has an existing relationship. The relationship can be business, financial or personal. In one case, it involved an owner who had no previous relationship with Toeniskoetter & Breeding, but did have one with other members of a development partnership.

Erin Toeniskoetter, senior asset manager in charge of property management, says her business is growing through acquisitions and development and has the capability to service additional properties like those in the Bryan Family Partnership. It does not, however, actively pursue bundled properties put out for bid.

“We have the capability of serving other ownership groups or family partnerships,” she said. “But there needs to be a special dynamic. The owners must share our philosophy of servicing tenants and maintaining a high level of building aesthetics. They must be willing to let us make decisions for the building. In most cases this means the owners have come to us on a referral.”

The two-story-plus-basement, 24,000-square-foot former hotel and brothel at 35 S. Market St. in downtown San Jose falls into this category. Toeniskoetter & Breeding Development manages the Class A office space for an individual living in Southern California. In 1997 the company considered buying what had been the vacant, 1895 Metropole Hotel, which is now a historical landmark. An investor group that did buy it hired Toeniskoetter & Breeding to restore the structure and remodel the interiors for Knight Ridder’s internet operations and to manage the property. When the investor group sold the building to the Southern California investor, Toeniskoetter & Breeding Development asked to continue managing it. Meanwhile, the mortgage broker who provided financing for the acquisition suggested Toeniskoetter & Breeding Property Management to the new owner even though he did not know that the company was already managing it.

Metropole Hotel Building, Downtown San Jose, CA

Software company headquarters

In 2006 Knight Ridder sold its digital operations to the McClatchy media group, which renamed it McClatchy Interactive, and in June 2007, McClatchy subleased the entire building to Xactly, a rapidly growing internet company providing software services. The original lease runs to 2010.

In addition to building maintenance, Amend said Toeniskoetter & Breeding Development Property Management provides these services:
● construction management
● tenant leasing
● tenant retention
● tenant improvements and
● financing.

The last, financing, is unusual for a property management company. Through its relationships with lenders, Toeniskoetter & Breeding Development obtains attractive terms for construction and permanent financing or refinancing of existing buildings.     
Amend said Toeniskoetter & Breeding’s portfolio contains predominantly Class A offices where superior maintenance and service result in higher tenant retention. The portfolio is currently 98.5% occupied. Even during recessions, it has not fallen below 94.5% occupancy.
“PCOM was an exception,” Amend said. “Most tenants don’t just go away. We work with them when times are tough, and we grow with them when their business is going like gangbusters.”
Among Toeniskoetter & Breeding’s other significant transactions this year was negotiating lease renewals at 890 and 950 Yosemite Drive in Milpitas for a partnership called Northern Industrial Properties. Contract manufacturer Solectron took 131,000 square feet of warehouse property. Symprotek, also a contract manufacturer, renewed its lease on 33,000 square feet.

Founded in 1983, Toeniskoetter & Breeding, Inc. Development has developed some 3 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. Toeniskoetter & Breeding Development also has an equity partnership with Minneapolis-based Thrivent Financial for Lutherans that led last year to acquisition of 120,000-square-foot First Franklin Plaza at 2150 North First Street in San Jose and three office buildings in Campbell totaling 61,056 square feet.