Hangar Financing Options?

[Trailboss]

My rent at my FBO is doubling next year...can't fault them, the Gulfstream guys are pushing out the piston guys.  I have an opportunity to purchase a hangar on the field that would be a great opportunity since it would have room for my airplane plus two others.  Rent from the three airplanes would cover all the costs.  Does anyone have a contact for land-lease financing?  This has become the sticking point with lenders I've talked to.  The land is owned by the city with relatively short terms (current lease expires in 7 years, renewal term would be 15).   Making a payment isn't the issue, its finding the upfront capital to make this work.

 

[RLCarter]

The current land lease is between the current owner and the airport/city, you should get a new lease (15yr) which a bank shouldn’t have a problem with

[Mike A]

I'm interested in how this turned out.  Our airport is doubling our leases as well and the hangars leave a lot to be desired (wood frame, sheet metal walls and leaky roof, no power, floods, etc).  The airport has a master plan to build new T-hangars one day but I'd be interested in forming a company to lease some of the available land and go ahead and construct maybe 8-10 new t-hangars.  The demand is definitely there as I get notes in my hangar door every month or so from people looking for space.

[Trailboss]

It hasn't turned out well.  The city and airport manager have basically stated that they want to own everything on the property and are using land leases to do it.  It's a nightmare that is getting worse...  It's the same demand wise, if I could build new hangers I would too...but city wants to be in that business and won't open it to fair-market.

[Aero Builder]

On 2/16/2021 at 1:32 PM, Trailboss said:

It hasn't turned out well.  The city and airport manager have basically stated that they want to own everything on the property and are using land leases to do it.  It's a nightmare that is getting worse...  It's the same demand wise, if I could build new hangers I would too...but city wants to be in that business and won't open it to fair-market.

@Trailbossour firm develops, leases and broker's aviation real estate nationwide (GA & AirPark/Hangar Home), we also own HangarNetwork.com which provides us with real time data of activity.

Your statement is consistent with the trend we are observing across the nation. Many municipalities are taking properties back & not issuing RFP's to the general public. They see the advantages of closely controlling the real estate, which brings up property management issues for the field if they don't have proper staffing. As aircraft become more efficient, revenues from fuel flowage decrease, affecting the airports balance sheet. Things will get interesting as airports begin competing with the general marketplace.

[Rick Junkin]

I got a commercial loan from Mountain Commerce Bank www.mcb.com in Knoxville TN for my hangar at Gatlinburg-Pigeon Forge Airport KGKT. They required 30% down, and my land lease is 30 years. I can give you contacts there if you're interested.

Cheers,
Rick

[ragedracer1977]

8 hours ago, Aero Builder said:

@Trailbossour firm develops, leases and broker's aviation real estate nationwide (GA & AirPark/Hangar Home), we also own HangarNetwork.com which provides us with real time data of activity.

Your statement is consistent with the trend we are observing across the nation. Many municipalities are taking properties back & not issuing RFP's to the general public. They see the advantages of closely controlling the real estate, which brings up property management issues for the field if they don't have proper staffing. As aircraft become more efficient, revenues from fuel flowage decrease, affecting the airports balance sheet. Things will get interesting as airports begin competing with the general marketplace.

You'd think if they were interested in revenue, they'd build hangars.  But they don't.  There's ~270 people on the wait list at my home field.  At least a 6 year wait.  Every single person on the list has paid at least a $250 deposit. They aren't tire kickers.  There's room for hundreds more hangars on the field, but they haven't built a new one in probably 20 years.  

I believe the wait at @N201MKTurbo home field is approaching 30 years.  No that's not a typo.  They, too, have enough land for hundreds of hangars. 

Edited April 22, 2021 by ragedracer1977

[EricJ]

11 hours ago, ragedracer1977 said:

You'd think if they were interested in revenue, they'd build hangars.  But they don't.  There's ~270 people on the wait list at my home field.  At least a 6 year wait.  Every single person on the list has paid at least a $250 deposit. They aren't tire kickers.  There's room for hundreds more hangars on the field, but they haven't built a new one in probably 20 years.  

I believe the wait at @N201MKTurbo home field is approaching 30 years.  No that's not a typo.  They, too, have enough land for hundreds of hangars. 

I'm trying to find hangar space in SoDak and it's the same issue.   There are a couple of buy opportunities and a build opportunity, but that's it.   

 

[Frank B.]

On 4/22/2021 at 1:16 AM, ragedracer1977 said:

You'd think if they were interested in revenue, they'd build hangars.  But they don't.  There's ~270 people on the wait list at my home field.  At least a 6 year wait.  Every single person on the list has paid at least a $250 deposit. They aren't tire kickers.  There's room for hundreds more hangars on the field, but they haven't built a new one in probably 20 years.  

I believe the wait at @N201MKTurbo home field is approaching 30 years.  No that's not a typo.  They, too, have enough land for hundreds of hangars. 

Building hangars on public airports that receive AIP money is quite entailed. I have built many hangars on airports in years past but my last hangars were in the late 90’s until now. Last year I leased just under 4 acres in the middle of the airport at KOMN. WOW has things changed with the FAA requirements etc. I was right at $250K in administrative stuff before I even had the proper FAA approvals to make application to the city for the building permits. (That 250K doesn’t count my building permits)  You have to have an FAA approved CSPP. EPA (FAA Required) DEP, Storm water run off plan etc ! None the less, even with the prices skyrocketing on materials I ordered everything several weeks ago and we break ground on Monday May 3rd and hopefully have a CO by 10/15/2021. I will have 39,000 sq ft under roof with 10 65 X 60 hangars available with 60 X 18 ft clear span doors. 

[ShuRugal]

You'd think if they were interested in revenue, they'd build hangars.  But they don't.  There's ~270 people on the wait list at my home field.  At least a 6 year wait.  Every single person on the list has paid at least a $250 deposit. They aren't tire kickers.  There's room for hundreds more hangars on the field, but they haven't built a new one in probably 20 years.  
I believe the wait at [mention=7464]N201MKTurbo[/mention] home field is approaching 30 years.  No that's not a typo.  They, too, have enough land for hundreds of hangars. 

My local airport has the opposite problem. Too many empty hangars.

They are making noises about raising rent to increase revenue... While the airport ten miles south is charging half as much for hangars, has a wait list, and is building new hangars to accommodate the list.

If my local airport cut a third off rent, they'd triple their occupancy.

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[Hank]

On 8/11/2021 at 9:58 AM, ShuRugal said:

My local airport has the opposite problem. Too many empty hangars.

They are making noises about raising rent to increase revenue... While the airport ten miles south is charging half as much for hangars, has a wait list, and is building new hangars to accommodate the list.

If my local airport cut a third off rent, they'd triple their occupancy.

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They're taking their lead from the progressive politicos in DC. The last inhabitant increased revenue by reducing rates, as you suggest. history shows which approach works and which one does not, but some people refuse to examine any historical data that does not match their preconceived notions. Maybe you could tactfully point out the situation with the nearby airport to your Airport Manager and induce him to try a well publicized one-year rent reduction to see what happens. If there are no new tenants, then raise the rent and see how many he loses . . .

[ShuRugal]

I commented about it in reply to the mass communication they put out. the next airport south is $100/mo cheaper, and their waiting list is so long that they have started building new blocks of hangars. If FCI took a page from PTB's book, they'd have more hangar revenue then they know what to do with.

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[hobbit64]

On 8/11/2021 at 10:58 AM, ShuRugal said:

My local airport has the opposite problem. Too many empty hangars.

They are making noises about raising rent to increase revenue... While the airport ten miles south is charging half as much for hangars, has a wait list, and is building new hangars to accommodate the list.

If my local airport cut a third off rent, they'd triple their occupancy.

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How much is FCI charging?  PHF is currently $250 for a smaller hangar with manual doors and I think $450 for the larger/newer ones with an powered door.

I was at Harnett County last week and the FBO manager told me that he thinks the airport charges $125.  I about fell over and wanted to start looking for real estate nearby.

Edited October 6, 2021 by hobbit64

[ShuRugal]

How much is FCI charging?  PHF is currently $250 for a smaller hangar with manual doors and I think $450 for the larger/newer ones with an powered door.

$295 for a 40' T-hangar with powered door, lights, and receptacles.

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[hobbit64]

On 10/6/2021 at 4:56 PM, ShuRugal said:

$295 for a 40' T-hangar with powered door, lights, and receptacles.

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Thanks

 

[NotarPilot]

On 4/21/2021 at 10:16 PM, ragedracer1977 said:

You'd think if they were interested in revenue, they'd build hangars.  But they don't.  There's ~270 people on the wait list at my home field.  At least a 6 year wait.  Every single person on the list has paid at least a $250 deposit. They aren't tire kickers.  There's room for hundreds more hangars on the field, but they haven't built a new one in probably 20 years.  

I believe the wait at @N201MKTurbo home field is approaching 30 years.  No that's not a typo.  They, too, have enough land for hundreds of hangars. 

That is incredibly frustrating. While I think we all benefit from publicly owned airports the problem is sometimes they’re not interested in generating more revenue because they don’t have to run it like a business. I wonder how privately owned airports compare next to publicly owned ones. Out here in SoCal we have Cable airport in Upland which is privately owned. I’d be curious to know how they generate most of their money to maintain the airport. I’m guessing it’s through leases. It’s definitely not fuel as they’re one of the cheapest airports around for 100LL.

[Cruiser]

3 hours ago, NotarPilot said:

 While I think we all benefit from publicly owned airports the problem is sometimes they’re not interested in generating more revenue because they don’t have to run it like a business. 

Very much the opposite. Public airports must comply with FAA regulations. Building an 8 bay nested T-hangar on a public airport will cost in excess of $500,000. utilities can easily add another $250.000/ Even with full occupancy that is a long time to recoup the investment at prices the airplane owners want to pay. 

Where is the airport going to get the money up front to invest in the building ? 

[Frank B.]

20 hours ago, Cruiser said:

Very much the opposite. Public airports must comply with FAA regulations. Building an 8 bay nested T-hangar on a public airport will cost in excess of $500,000. utilities can easily add another $250.000/ Even with full occupancy that is a long time to recoup the investment at prices the airplane owners want to pay. 

Where is the airport going to get the money up front to invest in the building ? 

**** EXACTLY ****  Environmental reports, 7469-1, 7460-2, CSPP … the list goes on and on to build hangars on an airport that receives AIP funds. Not to mention that the hangar development would TYPICALLY have to be included in the AMP as well as included in, or require an update to the ALP.

 I am currently building 10 4,000 sq ft up scale corporate box hangars at KOMN and I literally had out of pocket administrative expenses which exceeded $250K not taking into account any construction expenditures.  I have additional leased space at the airport, almost 2 acres, that I will build additional hangars on in the future. I looked into putting up some T-hangars and after getting the best price I could find on the hangars there was absolutely no way. It was 18 months ago that I priced these and they have went up substantially since then. Unless I could rent t-hangars for $850.00 per month, which isn’t possible, there was no way that I could come out on them.

On a positive note, KFIN is currently building 42 new t-hangars. The manager at KFIN is pretty sharp when it comes to grants and he got these t-hangars fully funded with AIP money using FDOT funds to cover the sponsors share. 42 hangars though, will NOT clear his existing hangar waiting list. MAC Charter at KOMN currently has a fairly short waiting list for t-hangars. KFIN I believe runs about $350 per month and KOMN runs approximately $450 per month.

[N231BN]

Hangars are currently low on the priority list of AIP funds. If all of your airside needs are taken care of and you can show demand it can be done.

We (K74) last built a six-unit T-Hangar for $375k in 2010. Current estimates are closer to 1M. Gross earnings are a little over 10k a year, and we are priced over most airports in the region. Building hangars is a terrible proposition right now.

[PeteMc]

23 hours ago, Cruiser said:

Where is the airport going to get the money up front to invest in the building ? 

I was checking out hangar options at two airports in the area we're moving to.  Both the larger in city and much smaller community near by told me the costs for them as a government/city entity would be astronomical.  The big city asked if I'd be interested in leasing some property and building the hangars.  Same with the smaller airport that was offering ground leases for 500/yr to build your own.  

So neither airport was opposed to new hangars.  But neither one could do it for a reasonable cost.  So I think I'm seriously going to go back to looking at the soft "carport" type cover and see if I can get them to allow it.  Sure, a full on hangar would be nice, but I just want to keep the snow and ice off and get some sun protection.