Riddle: What do fighter jets and real estate have in common?Answer: Plenty for the folks of Sacramento-based GenCorp. The firm, traditionally a holding company with its hands in the pharmaceuticals; auto (it was better known as General Tire & Rubber Co. until 1984); and aerospace industries, has over the past 18 months opted for a repositioning to focus on two core competencies: aerospace and defense, and real estate. As recently appointed real estate CEO Philip W. Cyburt explains, the move is a strategy apart from that of most corporations that “see their real estate as a drag on the balance sheet.” Future plays for the real estate group are currently in the blue-sky phase. On the to-do list for now is wringing more value from the sprawling 12,680-acre Sacramento facility of its Aerojet subsidiary. The solution is redevelopment, and the acreage has been parsed out into two separate projects: 2,715 acres called Rio Del Oro and the 1,390-acre Easton development In a recent chat with GlobeSt.com, Cyburt, who used to head up Boeing’s real estate operation, provided the play-by-play and gave some insights into the state of corporate real estate today.

GlobeSt.com: What’s the plan for the Sacramento acreage?

Cyburt: We’re planning residential and mixed-use commercial of 5,800 acres of the 12,800-acre facility. The rest will house Aerojet operations.

GlobeSt.com: Where is the project now?

Cyburt: We’re currently in the EIR stage on Rio del Oro, and Easton will start next year or the year after. Beyond that, the focus for the next three years is on the transition of entitlement and then phasing infrastructure and development.

GlobeSt.com: Is the plan to sell off parcels to individual developers or develop it all yourself?

Cyburt: We’ll partner where it makes sense. But it’s too early in the cycle to start chatting with potential partners.

GlobeSt.com: You were brought on to develop the real estate business. How big is the team and what other strategies are you planning?

Cyburt: Currently, there are six real estate-related people. In GenCorp., there are 2,980 employees, most in aerospace and defense. Terry Hall, the CEO, saw my corporate background, specifically with its emphasis on aerospace and defense, and asked me to build a strategy that balances aerospace and extracts the profits from the land. We still have to ramp up and grow the organization.

GlobeSt.com: Will you look into third-party investments down the road?

Cyburt: At this point, we’re focused on GenCorp.’s existing holdings. In the future that may be a possibility. Right now, we’re just building the business and our plate is pretty full.

GlobeSt.com: I’ve heard stories of major global companies keeping leases in shoeboxes. Is corporate America finally getting the point of real estate holdings?

Cyburt: In general, over the past 10 years, a lot of users have gotten their arms around their real estate. Largely that’s because of technology and Sarbanes-Oxley. Where you see a lot of corporations fall down is in the management of their assets and the ability to understand how real estate fits into their P&L. Too often, real estate is considered a by-product of the corporate process. Increasingly, you’re seeing the development of strategies that recognize how real estate is intertwined with the process of business.

GlobeSt.com: So they’re getting the message.

Cyburt: Corporations are finally seeing some of the larger underlying issues. The problem is that it takes time to capitalize on those assets. It’s tough for shareholders to get their hands around a strategy if it takes longer than two or three quarters to capitalize on it. A 747 sells for the same price globally. Real estate is valued differently from corner to corner. It’s a tough commodity to understand.

GlobeSt.com: Are in-house real estate departments destined for a comeback?

Cyburt: This isn’t a culture that permeates in corporate America. Real estate is local, it can’t be managed centrally.

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