With some 70 million sf of land in the Puget Sound and some 120 million sf nationwide, it's been said that if securitized Boeing Realty would be neck-and-neck with the largest REIT in the nation, Equity Office Properties. And moving forward, Boeing Realty President Phil Cyburt tells GlobeSt.com his company is maintaining more control over its sizeable surplus.
In bygone days, Boeing would sometimes sell raw land outright to developers, who could then build as they saw fit. Now, says Cyburt, the company prefers to work major parcels through the process of entitlement and the construction of infrastructure. The thinking is that master-planned projects will allow developers to waltz into ready-to-build sites and allow Boeing to "leverage the intrinsic value" of its surplus--which includes the largest developable tracts from Everett to Auburn, the northern and southern borders of the greater Seattle market.
But the lengthy process and strings regarding allowable uses have left some in the local real estate community frustrated with doing business "the new Boeing way." A source speaking from anonymity tells GlobeSt.com that obtaining information from Boeing Realty, such as firm pricing, availability and intended use of its properties, is akin to stapling Jell-O to a wall.
"Boeing just says, 'make us an offer and tell us the buyer, and we'll let you know if we're interested," says the source. "There are too many layers in (Boeing's) real estate department. Everyone is watching everyone else's back--afraid to make a mistake--and they can't make quick decisions. Boeing's rules are always changing and they don't go out of their way to help the brokerage community sell their properties."
The source goes so far as to say that some local developers have opted to avoid deals for Boeing properties because the process is too lengthy and cumbersome. Retorts Cyburt, "I have a job to do taking the Boeing capital and financial structure and bringing it together with local real estate communities. We are trying to gear very closely with (them), but we're not going to wreck the (land) value along the way."
In its 240-acre master-planned project in Kent, Pacific Gateway Business Park, Cyburt says he is taking pains to ensure developers "fit the profile." He adds, "As we (Boeing) are leaving our legacy…we want to know who are neighbors will be because they will reflect on us. And, that's not always going to make everyone happy."
Though no developer has yet to ink a deal at Pacific Gateway, Cyburt says in the next week Boeing will be announcing its selection of developers, with which it will either sell property outright or go into partnership in order to build out the expected 2.4 million sf mix of office and industrial space.
Locals have squawked that Boeing is asking too much for Pacific Gateway land. "Some say, 'Kent is $5 dirt,'" says Cyburt. "I don't need offers at $5. That may be a comp in Kent Valley…but we're building a quality business park." In fact, Cyburt offers that its recent deal with MCI netted $7.70/sf based on the value added by Boeing-built amenities and infrastructure.
Addressing disgruntled brokers, Cyburt says, "We're going to do a better job getting in front of brokerage groups. And, for those who are unhappy, I'd love the opportunity to sit them down and explain how we work and what we're going to do."
Want to continue reading?
Become a Free ALM Digital Reader.
Once you are an ALM Digital Member, you’ll receive:
- Breaking commercial real estate news and analysis, on-site and via our newsletters and custom alerts
- Educational webcasts, white papers, and ebooks from industry thought leaders
- Critical coverage of the property casualty insurance and financial advisory markets on our other ALM sites, PropertyCasualty360 and ThinkAdvisor
Already have an account? Sign In Now
*May exclude premium content© 2024 ALM Global, LLC, All Rights Reserved. Request academic re-use from www.copyright.com. All other uses, submit a request to [email protected]. For more information visit Asset & Logo Licensing.
