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HIGHLIGHTS
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| Airtech was repositioned into Office Condos and made profitable |
In the mid-1980s, Borelli Investment Company put together syndicated investment groups to acquire an office complex on Technology Drive near the San Jose Airport. Airport Plaza Office Center consists of three two-story garden office buildings with landscaped courtyards and ample parking, just minutes from the terminals.
Over the past two decades, the Silicon Valley real estate market has seen constant change. Borelli's comprehensive property management services and proactive repositioning has helped the office complex to perform well for the investors in all economic markets.
CHALLENGE
When Borelli acquired it, Airport Plaza Office Center was a walk-up, garden-style complex offering "Class B" office space. To maintain high occupancy as the complex aged and newer office buildings were built in the airport area would require efficient maintenance, cost-effective capital improvements, and an innovative marketing plan.
SOLUTION
Following its acquisition, Borelli Investment Company positioned the office complex to continuously provide the best value in the marketplace. The company offered amenities such as a common conference room, cubicles dividing open office areas, a fitness facility, convenient coffee bars even in smaller suites, wall-mounted Internet connections and later, high-speed Internet access. Many of these features were a first for this type of space in Silicon Valley , and helped differentiate the buildings from the competition.
Borelli's property managers also worked closely with in-house staff and a carefully selected group of vendors to ensure that the buildings were maintained and renovated as needed. The moment one tenant vacated, the space was inspected and refurbished-from fresh paint to new carpeting-to attract tenants quickly and economically.
In addition, Borelli's professionals tightly managed operating and capital investment budgets, collected rents and impounds in a timely manner, and relied on trusted vendors working within well-defined guidelines to control costs.
Perhaps most importantly, Borelli Investment Company has called upon its experience to reposition the buildings time and again-converting large blocks of office space as they opened up to smaller suites that are easier to lease, and making other changes to interior space plans that improve the buildings' marketability.
RESULTS
Borelli Investment Company has maintained an exceptional occupancy rate of 95 percent on average at the complex, throughout up and down cycles. As part of its commitment to reposition the buildings as needed, Borelli has also moved its corporate offices within the complex five times to absorb vacant space or support the repositioning process.
In late 2004, capitalizing on a market trend toward business condominiums, Borelli rezoned one of the three buildings and completed $2.5 million in renovations to create AirTech Office Condominiums. The rapid sales of the units provided immediate proof that this repositioning was right on the money-and ensured that the Airport Plaza Office Complex continues to be a high-flying investment for its owners.
