Brad Krouskup
President & CEO

Dan Amend
Senior VP

NEW LEASES IN TOENISKOETTER & BREEDING, INC. DEVELOPMENT’S MADRONE BUSINESS PARK
HELP DRIVE GROWTH IN MORGAN HILL

            MORGAN HILL --  Flextronics, one of the world’s largest contract manufacturers, has leased a 155,520-square-foot building near the intersection of Highway 101 and Cochrane Road
The new Flextronics lease is one of three in Toeniskoetter & Breeding, Inc. Development’s (TBI Development’s) adjacent Madrone Business Park and Cochrane Business Ranch. The other leases are a 41,301-square-foot building at 465 Woodview Ave. to Micro-Mechanics Holdings, Ltd. of Singapore for its first U.S. manufacturing plant and 80,000 square feet at 18675 Madrone Parkway to Del Monaco Specialty Foods, which is expanding and moving its food processing operations there from San Jose. These new leases are helping drive development that is transforming the Cochrane Road area into the primary retail, service and industrial center between San Jose and Gilroy.  

“The new jobs being created are having a very positive impact on both the Madrone Business Park and the shopping and retail centers nearby and across the street,” said Brad Krouskup, President and CEO of TBI Development. “As the number, diversity and quality of restaurants, stores and services grow along Cochrane Road, the area becomes increasing desirable for high-technology and other businesses. The people who work in these new manufacturing businesses, in turn,  create more business for the retail and service industries.”

The Flextronics facility at 925 Lightpost Way must rank among the most picturesque of manufacturing buildings. The building was originally designed for reproduction of paintings by the Thomas Kinkade Company. The introduction of new art reproduction technology significantly reduced his company’s space requirements. Headquartered in Singapore, Flextronics is an electronics manufacturing services provider with fiscal 2008 revenues from continuing operations of more than $33.6 billion. The company has a network of facilities in 30 countries on four continents.

Micro-Mechanics Holdings is engaged in the design, manufacture and marketing of precision tools, assembles and consumable parts used in the assembly and testing of semiconductors. Earlier this year, Micro-Mechanics  acquired substantially all the assets of Advanced Machine Programming (AMP), a precision machining and assembly business focused on Silicon Valley industry, and signed a long-term lease on the AMP building in the Cochrane Business Ranch. The transaction gave Micro-Mechanics its 6th factory worldwide and its first factory in the United States. Chris Borch, Micro-Mechanics CEO and a Los Gatos resident, said his company expects to increase employment in Morgan Hill from the current 55 to 65 over the next three years, with the new positions being primarily for engineers and skilled machinists.        
“We think Morgan Hill is an ideal location, being just close enough to the tech epicenter of Silicon Valley while still being offset from some of the cost, traffic and other pressures of the Valley,” Borch said. “Many of our people live in Morgan Hill or to the south and enjoy their shorter and less hectic commutes.”

TBI Development sold the empty, 126,000-square-foot building at 18675 Madrone Parkway earlier this year to Nearon Enterprises, which leased nearly all of it to Del Monaco Specialty Foods. Owner Vic Del Monaco said operations will be phased in through 2009, and by mid-2010, he expects to have more than 75 employees in Morgan Hill and 150 by 2013.

Del Monaco Specialty Foods is a wholesale food processor specializing in custom, private-label recipe production and innovative recipe design. Products of the family-owned business include soups and chowders; sauces, pesto and gravy; mashed potatoes; puddings and other creamy desserts; filled pasta and gnocchi; chili and stews; flavored butters and pot pies. A few of its customers are Erik’s Deli Café, Sonoma Chicken Coop, Amici’s Pizzeria and Whole Foods Markets. The company emphasizes “green” products and energy-saving technology.
Del Monaco said, “We scouted locations from Sacramento to San Luis Obispo with very specific criteria and specifications. These requirements included size, ceiling heights, utility capacity, employee demographics, freeway access, climate, community culture, city politics, growth and quality of schools. The City of Morgan Hill met our high standards, and the facility met our physical specifications.”
Cochrane Road is now developed on both sides from Monterey Highway to Highway 101, with the new, 66-acre Morgan Hill Shopping center being developed on the north side of the street east of the freeway. In addition to TBI Development’s two business parks, Cochrane Business Ranch with 30 acres and Madrone Business Park with 110 acres, the company is developing the 80,000-square-foot Madrone Village Shopping Center within the Madrone Business Park.

Across Cochrane Road from the TBI Development properties are the 400-acre
Morgan Hill Ranch, the second largest business park in Silicon Valley, and the new, 250,000-square-foot Cochrane Plaza community shopping center, where Wal-Mart is among tenants going through the permit process.
The Cochrane Road commercial area is well-positioned to serve South Santa Clara County, lying centrally between San Jose and Gilroy in one of the region’s most affluent and well-educated communities. Morgan Hill has a population of 39,000 with an average household income of more than $100,000 per year and a quarter of the adult population having a bachelor degree or higher. The Cochrane Road retail trade area consists of 100,000 people, which could double when San Jose’s Coyote Valley three miles north is developed to plan. Daily traffic counts on Cochrane Road exceed 22,000 trips.

Once fearful of becoming only a bedroom community for San Jose and other Silicon Valley cities to the north, Morgan Hill now has 17,000 jobs within the city limits. Garret Toy, Morgan Hill’s Director of Economic Development, said the city’s goals include both attracting more jobs and diversifying its employment base.

Founded in 1983, Toeniskoetter & Breeding, Inc. Development has developed some 2.5 million square feet of buildings, manages a portfolio of two million square feet 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 properties in Morgan Hill, other projects include 450 West Santa Clara Street, the O’Connor Health Center and 525 Race Street, all in San Jose; Gateway Square in Campbell; and the Granite Creek Business Center in Scotts Valley.