TOENISKOETTER & BREEDING BEGINS CONSTRUCTION OF UPSCALE HERITAGE FINANCIAL CENTER IN MORGAN HILL
September 3rd, 1999

MORGAN HILL -- Toeniskoetter & Breeding Inc. (TBI), Development, already known for the enduring style and quality of its office buildings, has begun work on the most upscale project in its Cochrane Business Ranch -- a garden financial center built around the South Valley headquarters for the Heritage Bank of Commerce. Located at 18625 Sutter Boulevard with frontage on Cochrane Road, the new, 27,000-square-foot Heritage Financial Center will occupy the last remaining site in the Cochrane Business Ranch.

"Heritage Financial Center will provide the highest visibility in what is unquestionably one of the most successful business parks in the South Valley," TBI Executive Vice President Brad Krouskup said. "The one-story building will be constructed of brick and solar bronze reflective glass around a 4,000-square-foot courtyard with fountain and landscaped relaxation and entertainment areas."

"The San Jose-based holding company, Heritage Commerce Corp., parent company of Heritage Bank of Commerce is creating a third, separate bank to be headquartered in 7,260 square feet of the Heritage Financial Center. The remainder of the space will be available for lease by other financial and service businesses", Krouskup said. The building will be located on two acres of property with extensive outside landscaping as well as the courtyard.

"The development of Heritage Financial Center fits perfectly into our bank's plan to expand service to the growing South Valley market," commented Brad Smith, chairman of the Heritage Bank of Commerce's holding company and president of the South Valley branch. "It provides an excellent location for business bank service delivery. For a number of years, we have tracked the growth of small-to-medium-sized companies in the Morgan Hill area and the relocation of these businesses here from the northern part of Santa Clara County. Economic development is occurring as we projected, only it is now about two years ahead of what we expected."

Heritage Bank has opened a branch bank in interim offices on the Sutter Boulevard site and hopes to be operating as a separately chartered bank in permanent offices by the first quarter of next year. Construction of the Heritage Financial Center, which is being undertaken by Toeniskoetter & Breeding, Inc., Construction, is expected to be completed in October. The design is by the San Jose architectural firm of Kenneth Rodrigues & Partners.

Bob Engles, a Cushman & Wakefield broker who specializes in Morgan Hill, said completion of the Cochrane Business Ranch leaves the city with approximately 80 acres of industrial and business property ready for immediate development.

"This vacant property is scattered throughout Morgan Hill," he said. "In the past, 80 acres has represented about three years' activity, but the pace of development has been accelerating."

Construction of Heritage Financial Center is beginning simultaneously with the completion of Toeniskoetter & Breeding's work on a new headquarters in the Cochrane Business Ranch for The Coast Distribution System, an international distributor of marine and recreational vehicle components. The single-story, 25,255-square-foot building at 350 Woodview Drive was completed in February by Toeniskoetter & Breeding, Inc., Construction. Founded in the mid-1960s and moving from 1982 Zanker Road in San Jose, Coast Distribution employs 100 people in its headquarters and some 300 more at 18 distribution centers across the United States.

Expanding local companies and transplants from Silicon Valley have resulted in 100% leasing of buildings at Cochrane Business Ranch, which was developed by TBI. Krouskup said soaring land prices in the Golden Triangle area of San Jose, Santa Clara and Milpitas and the 280 Corridor have given Morgan Hill a price advantage over competing areas of Silicon Valley. The availability of ample executive housing has also fueled industrial growth as business owners first moved to upscale hillside residences or small ranches in and around the city, then relocated their companies nearby.

Toeniskoetter & Breeding, Inc. Development has developed and serves as managing general partner for a number of diversified real estate properties throughout Santa Clara and Santa Cruz counties. In addition to Cochrane Business Ranch, the company's projects include the 70,000-square-foot western headquarters for Integrated Circuit Systems in San Jose, the 52,000-square-foot O'Connor Health Center in San Jose, the 38,000-square-foot retail and medical office complex named Gateway Square in Campbell, the 93,000-square-foot Granite Creek Business Center in Scotts Valley and its own headquarters in the historic, award-winning office complex at 1960 The Alameda in San Jose.