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By Katherine Conrad, San Jose Mercury News, August 13, 2006 Commercial real estate dealmaker Ralph Borelli grew up in East San Jose next to an apricot orchard where his job was to cut open the succulent fruit and lay it out for drying. “They used to let me cut the apricots until I had a cut on every finger. Then I was relegated to the pit boy. Born and raised in old Santa Clara County, young Ralph cut his teeth on land deals and real estate acquisitions. He recalls attending city council meetings with his father, Nelo G. Borelli, an Italian immigrant who founded the Silicon Valley real estate company in 1955. In 1973, Borelli took over the small firm and built it into a commercial real estate engine that manages 4 million square feet, has more than 1,000 tenants and employs 30 brokers and their assistants. |
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Ralph Borelli worked on a deal since 1976 and
said, "I should have bid the job by the hour." |
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During his career he has brokered some of the biggest land deals in Santa Clara County, including KB Homes’ Tuscany Hills project of which he is most proud, and the Elmwood transaction valued at $60 million with Milpitas and Santa Clara County. After closing a retail deal in Morgan Hill for 66 acres that he began working on in 1976, Borelli only had this to say: “In hindsight, I should have bid the job by the hour.” Born in this valley, he has been a witness to its metamorphosis, even as he has played a role in driving it. His boyhood valley of orchards became a land of tract homes and industrial campuses, and it is now growing into higher-density housing and office complexes. Borelli calls it “land recycling”. |
TITLE: CEO, Borelli Investment Company
AGE: 52 CAREER: Began workings as a real estate broker at 19 and worked at an auto wrecking yard for four years. EDUCATION: San Jose State University, 1976, B.A. in business administration with emphasis in real estate. FAMILY: Wife, Gina, and three daughters, Marissa, 23; Kristina, 21; and Janelle, 18. |
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FIVE THINGS TO KNOW ABOUT RALPH BORELLI |
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1. Stock cars don’t have speedometers, so Borelli doesn’t know exactly how quickly he’s sped around the Grand Prix track. His best guess is125 mph. “We were going into a curve on the race track, so it was pretty hairy.” He and his crew, the Historic Stock Car Racing Series, raised about $35,000 for the Canary Foundation by giving rides along the track to the highest bidders. |
| 2. He just closed a land deal for 66 acres in Morgan Hill that he began working on in 1976. | |
| 3. Borelli Investment has forged an alliance with an Asian-American brokerage firm, GD Commercial Real Estate in Milpitas, to sell commercial condos to overseas investors. A delegation from China is scheduled to visit in September. | |
| 4. He was named Land Broker of the Year by the Association of Silicon Valley Brokers. | |
| 5. His first real estate deal was selling a house in downtown San Jose for $7,500. He received 75 $100 dollar bills stuffed in a paper bag. Where did the cash come from? Borelli didn’t ask. | |
Q You started in commercial real estate more than 30 years ago, and you have watched the economic development of the valley. Is the valley transforming itself again?
A The orchards are all gone. The Morgan Hill deal has a vineyard on it. Most development deals today are recycling property. We’re involved in a number of transactions where we’re tearing down industrial buildings that aren’t that old. We tore one down in January that was 22 years old… There was nothing wrong with that building. But it was in an area of San Jose that was being transformed from industrial to residential. There’s still such tremendous demand for residential housing.
Q This is controversial, as some say the city is demolishing its industrial base that employs people in favor of houses.
A In my view, there’s still a lot of buildings that are functionally obsolete. And there’s a lot of manufacturing that is gone and is not coming back. And there’s still a tremendous demand for housing.
Q But once houses are built, the recycling process is over. Houses are permanent. Where do you stand on this?
A In my opinion as our market matures, you are going to have a lot more office type of buildings rather than manufacturing buildings because the manufacturing is gone and I don’t think it’s coming back.
Manufacturing in this valley for the most part now is software-related. You can have a multistory office building filled with software engineers and that’s manufacturing. It’s a different type of product. You have to go vertical with the price of land. It’s a natural evolution of our marketplace.
Q You’ve watched the orchards bulldozed for housing, now buildings your company constructed get torn down for either more housing or higher office buildings. I understand that you are a businessman with a family to feed and employees to pay – but do you feel any nostalgia after all the changes?
A Time marches on. People have got to decide where the priority is. Are you going to provide enough housing for people or artificially choke off housing and keep raising the price? People wonder why housing is so expensive. It’s so simple, it’s supply and demand. If you want this bucolic neighborhood with a bunch of ranches around, then be prepared for high prices, because I don’t think people are going to leave here.
Q The recycling trend: What do you think about that?
A As an economy, you need to adapt to changing times in the marketplace. Otherwise the market is going to pass you by… Those buildings are obsolete; they should be torn down. If you don’t change with the times, the private sector is going to pass you by. Then you’re going to have a wasteland.
Q What do you think about Yahoo’s recent acquisition in Santa Clara and its plans to demolish the buildings and construct a new campus, possibly a headquarters?
A I think a move like that is outstanding for Silicon Valley because you have the bellwether company making a huge commitment to maintaining their headquarters here, and we need that. Fortunately Yahoo has enough of a margin that they can afford to pay. Apple is another example, as is Google. These companies can afford to stay here and pay their employees enough so they can afford to live here. But if you manufacture coat hangers and you don’t have enough of a margin, you can’t be here and you won’t be here.
Contact Katherine Conrad at kconrad@mercurynews.com or (408) 920-5073.
