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HN Newsletter                                                                         April 2015

In This Issue
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A mobile detailing operation that offers services to corporate clientele and the general aviation community 

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Better Protection for your Hangar

You wouldn't dream of going without home insurance, but what about the home of your aircraft? AOPA has created an exclusive Hangar Insurance program which is ideal for GA pilots.


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Featured Listings
36,400 SF Hangar for lease (all or part) at Fort Worth Meacham Intl (FTW)
click picture to see listing

   

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Airpark home for sale at Nevada County Air Park (G00)
click picture to see listing

   

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10,000 SF of Transient Hangar space at Rocky Mtn Metro, Broomfield, CO  (BJC)
click picture to see listing

   

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12,000 SF corporate hangar for sale at West Georgia Regional (CTJ)
click picture to see listing

   

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2,700 SF Hangar for sale at Waterville Robert LaFleur (WVL)
click picture to see listing

   

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103 Private Hangars for sale at Glendale Municipal  (GEU)
click picture to see listing

   

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10,000 SF Hangar for lease at Witham Field (SUA)
click picture to see listing

   

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Private Airport for Sale in Pearce Arizona (7AZ4)
click picture to see listing
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19,000 SF Hangar for sale at Centennial Airport (APA)
click picture to see listing

   

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1,500 SF of office/shop space for lease at Lambert - St. Louis Intl. (STL)
click picture to see listing

   

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Why lease when you can own?
Own the land.  Own the hangar.
Southend Corporate Airpark (UAO) 
click logo to see listings

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2,592 SF Hangar for Sale at Garfield County Regional (RIL)
click picture to see listing

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3,480 SF Hangar for Sale or Lease at McClellan-Palomar (CRQ)
click picture to see listing
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Beautiful T-Hangar for Sale at Northwest Florida Beaches International (ECP)
click picture to see listing
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3,600 SF Hangar for Lease at Centennial Airport (APA)
click picture to see listing
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50,940 SF Hangar space available at Phoenix-Mesa (IWA) 
click picture to see listing

   

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13,000 SF Hangar for Lease at Gainesville Regional (GNV)
click picture to see listing
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17,649 SF Hangar with 4,023 SF of Shop Space at Centennial Airport (APA)
click picture to see listing
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4,400 SF of custom office space available at Centennial Airport (APA)

click picture to see listing 

 Visit our website


The Changing Face of Airport Management

Rocky Mtn Metro Airport
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It is widely recognized that airports, particularly major airports, are engines driving local and regional economies, typically accounting for a large percentage of payrolls through direct operational activity as well as their support of downstream businesses both on and off the field. 

What might not be as well-known is that a very interesting trend has emerged due in part to a shift in airport management styles. Airport authorities are no longer state bureaucracies but have been quietly morphing into entrepreneurs and landlords. Rather than being run by officials burdened with red tape, many airports are now managed by astute business people with an eye toward maximizing the revenue flowing into their coffers.

Historically, major airports were developed by national or regional government entities but in many parts of the world, deregulation and open-skies agreements have spurred a gradual change in ownership and management models. In many countries (including Canada, Mexico, Europe, and Australia), airports have been privatized to varying degrees. These range from not-for-profit companies in Canada to for-profits in the UK. In the Middle East, aggressively entrepreneurial governments are building new, high-class airports with increasing frequency.

Although in the US most airports are city- or state-owned, many of those authorities are trying to detach themselves from being dependent on airline-backed funding arrangements. Freedom from such dependence would enable them to engage in business ventures other than those related to processing passengers and cargo.

Airports have realized that by maximizing non-aviation revenue they would be able to generate income streams which could then be used for on-field improvements. Such improvements would presumably attract more flights and passengers, leading to more and better improvements, thus creating a positive-feedback revenue cycle.

Airports control large areas of prime real estate, and they have begun to understand the value generated by the vast numbers of people, vehicles, and goods that pass through their land and buildings. They have become more aware of the revenue potential of developing this real estate for its highest and best use. Many in fact have embarked on aggressive marketing campaigns to bring aviation and non-aviation businesses alike to locate on their property.

At the 2014 NBAA Conference, Hangar Network spoke with a number of airport administrators who were engaged in actively marketing their existing hangars and land parcels available for building.

For many, airport planning has also undergone a subtle but important change. Rather than living or dying by single-state master plans based on rigid assumptions, airports have shifted to dynamic planning, in which a variety of future states are studied and appropriate provisions put in place to deal with all of them. Such flexibility enables them to move quickly to take advantage of many possible scenarios without having to go back to square one in the planning cycle or having to rethink the entire master plan. In addition, airports have begun working with their surrounding cities in a more cooperative - rather than adversarial - manner to maximize the potential for each entity to realize positive outcomes and create new opportunities for businesses that understand the benefits of locating in or near an airport.

Why locate on or near an airport?

If a business operates globally, is dependent on or responsible for just-in-time deliveries of goods or components, has a lot of staff flying to and from various offices, is in a leading-edge or high-tech industry, is dependent on imports, exports, or logistics, and can benefit from a large concentration of people close by, larger airports have many advantages to offer.

Advantages to locating on or near an airport include connections to international markets, highway access from most if not all directions, highway frontage, a location near the geographical center of metropolitan areas, and close relationships with local government entities. Importantly, those airports have a keen interest in developing their land in ways compatible with aviation.

Depending on local circumstances (and separate from the usual facilities like parking, car rental companies, etc), developments that naturally complement airport services and amenities and fit in well with airport land use include cargo handling operations, hotels, conference/convention centers, corporate offices, high-tech business parks, destination shopping centers and outlet malls, industrial development such as manufacturing and warehousing, recreational and sports facilities, and libraries.

One of the challenges facing airport planners is that there is a natural tension between the limitations an airport imposes on the land surrounding it and the opportunities it creates for its land. Those tensions are caused by noise, environmental issues, height restrictions, and traffic congestion. A more insidious challenge may be caused by unscrupulous developers who try to site residential developments near airports without fully understanding the issues that arise when, inevitably, some of those who decide to live there may not have been made aware of - or chose to ignore - the airport's normal operational factors, primarily noise. There have been many instances of people moving in next to an airport without a full realization that airplanes actually make noise when flying or when their engines are running, and then those folks lodge complaints against the airport.

That being said, airports that open up to their surrounding communities will find those communities more welcoming than if they keep to themselves or are perceived as such. Communities who are educated about all of the benefits - as well as the limitations - that an airport brings to the community will be more willing to accommodate or at least compromise with airports to accept and integrate their plans into a regional approach to development. Those factors serve to encourage everyone to play nice with each other, for the mutual benefit of all.

In the US there are a number of examples of airports opening up land for development either through sale or lease. To mention a few of them: the Indianapolis International Airport (IND) authority has embarked on its plan to return more than 1,200 acres to the market, and deals to sell several of those parcels have already been closed. In last month's newsletter we described the progress being made at Salina Regional (SLN), which is actively marketing 550,000 square feet of hangar space as well as numerous vacant lots in its quest to bring businesses to the airport. In Colorado, parcels are available for sale or lease and open for development at Centennial Airport (APA) and Rocky Mountain Metro Airport (BJC, pictured above). You can get more details about those listings on the website www.hangarnetwork.com and then search under the airport identifier.

In conclusion, if you are a business owner with some of the incentives mentioned above, it is well worth your time to visit with the airport director or manager to explore the opportunities that may be available by locating on or near the airport. By fully understanding both the risks and benefits involved, you will be in an excellent position to make informed decisions while taking advantage of all that an airport location has to offer.


HN Contributing Author:
Mike Straka, PhD
President, Colorado General Aviation Alliance

Sources:
1. Rian Burger, Principal, Airports - Terminals, Stantec. Area Development Online. "Open for Business: Airports as Real Estate Developer and Strategic Partner"

2. Tim Unruh, Salina Journal Feb 15, 2015. "After Schilling base closed, visionaries grew complex into even big economic driver." 

Best Practices in Hangar Subleasing:
Holding Over


For most, an anniversary is cause for celebration. It is an apt time to reflect on the passage of time and anniversaries promote goal-setting for the year ahead. To be sure, as I penned this month's edition of Best Practices in Hangar Subleasing, I reflected that March 31 marked the anniversary of FBO Partners' first year of business operations.

Among the many client subleases we've reviewed in our first year, we have found that all of them- without exception- mark the anniversaries of their commencement date with, well, no discernable language indicating what happens upon termination. More often than not, upon expiration of the contemplated agreement term, the sublessee remains a hangar tenant of the FBO, and continues as a month-to-month tenant...for years. And that, as they say, is the rub. 
 
While all FBOs should desire a balanced portfolio of long term and short term sublease agreements, each agreement should have clear language indicating when it terminates, and importantly- what are the terms of continuance after termination. In commercial leasing, the name for the what-happens-upon-termination provision is generally referred to as the "Holding Over" provision. Broadly speaking, a Holding Over provision states that upon termination of agreement, a tenant - or in the case of an FBO, a sublessee- may remain on premises, however, at a rate far higher than their then-current rate- sometimes 150% or more. 
 
For Fixed Base Operators, the Holding Over provision- as far as we've seen- doesn't seem to exist in sublease agreements. Why? For one thing, a sublessee is perhaps the most valuable client of an FBO, providing both real estate and line services (fuel) revenue. FBOs generally desire long term revenue streams to help offset the seasonality of many aspects of the business. To that end, the very contemplation of a provision seems a bit heavy handed, and FBOs are loathe to upset a long term customer with it. Yet, the provision itself is misunderstood by both parties. Bearing in mind it certainly permits an FBO to do so, the spirit of a Holding Over provision is not to actually increase a sublessee's rent by 150% (or similar). It is meant only as a mechanism to return the parties- both FBO and sublessee- back to the table every few years to check in with each other, and negotiate a new agreement, under prevailing business conditions of the time. Without it, subleases "evergreen," and continue under the same terms and conditions. More painfully, sublessees continue to pay the FBO the same rates- for months, if not years.

Take a moment to check your hangar sublease portfolio and review their respective anniversary dates, and termination dates, if noted. If any of those subleases expired say, before the fall of the Berlin Wall, the addition of a Holding Over provision in your next sublease agreement may be well worth consideration.

-Doug Wilson
SOLD / LEASED
PROPERTIES
 

 

25,000+ SF Hangar at Bob Hope Airport, Burbank, CA (BUR)   
LEASED 

FEATURED AIRPORTS
 


The Salina Airport Authority has numerous development ready lots available for lease and sale now at this premier location

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20th Annual JAA Fly in

Saturday June 6th

6 am - 1 pm

 

Available Airport Hangars  

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Sites are available for built-to-suit options, including locations with access to the Port's 11,500-foot runway and direct connections to Union Pacific Railroad and BNSF Railway trains.

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Featured Listings



To see all our properties click below


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15,120 SF Hangar space available at Springdale Muni (ASG)
click picture to see listing

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28,000 SF Hangar with 5,000 SF Office/Shop space for Lease at Klamath Falls (LMT)
click picture to see listing


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60 X 80 Hangar for Sale or Lease at Creve Coeur Airport (1H0)
click picture to see listing

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4,045 SF of  Flex Space available at Centennial Airport (APA)
click picture to see listing

   

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20,000 SF Hangar for Lease at Manassas Regional (HEF) 
click picture to see listing

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9,000SF Hangar for Sale at Front Range Airport (FTG)
click picture to see listing

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7,500 SF Corporate Hangar for Lease at Centennial Airport (APA)
click picture to see listing

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406,185 Total SF of Hangar, Office and Production space at Adams Field (LIT)
click picture to see listing
 
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3,600 SF Condo Hangar at Yampa Valley Regional (HDN)

click picture to see listing 

Listed by:

 

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1,428 SF Hangars for Sale or Lease at Hayward Executive (HWD)
click picture to see listing

 

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3,720 SF Hangar and 800 SF internal office/shop space for Lease (APA) 
click picture to see listing

   

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48,000 SF Hangar for Sale or Lease at General Mitchell
International (MKE)
click picture to see listing

 

  

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15,525 SF Hangar for Lease at Morgantown Muni (MGW)

click picture to see listing 

 

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3,600 SF Hangar space for lease at Olympia Regional Airport (OLM)

click picture to see listing 

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Hangars available at Centennial Airport (APA)
click picture to see listing

 

Stijgend Real Estate, LLC 

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