Investing In Aircraft Hangars

[David Spurlock]

After years of regular real estate development where I needed to travel by plane. As a result, I discovered that many aircraft owners like me were experiencing a shortage of hangars. Naturally, owners didn’t want their expensive planes sitting outside in the weather. I started exploring the market and discovered that the shortages were wide spread.  I’m currently working some deal in the Phoenix valley where there are acute shortages of hangars. Roughly, there are 600 owners waiting on hangars.

[Joseph Zimlich]

A phrase in my industry is "If you've seen one airport, you've seen one airport". I bring that up just to note that I'm not intimately familiar with your particular airport.  It sounds like you'll be improving on top of a ground lease issued by the municipality.  In my experience, ground leases can last a long time, but it's quite common for the improvements (the hangars themselves, etc) to revert to airport ownership when the lease ends.   Are you essentially acting like a contractor, but just within an airport environment and selling the renovation while your client holds the lease or is there another process I'm missing?

It probably isn't an issue for a company who is already operating at an airfield, but I'd check with airport management to confirm your improvements don't violate the lease if you branch out to just standard private hangars.  I experience this pretty regularly with airport owned hangars, so the rules may be different on a ground lease, but airports tend to be touchy about what's in a hangar and have very clear cut rules about using hangars for airplanes.  Hangar space has a relatively low cost per square ft and it's not uncommon for tenants to shove cars, RVs, boats, etc into the empty space around an airplane but this will violate airport rules and regulations.

PS I have on about a half dozen occasions seen private airports for sale on craigslist.  I won't lie, I do get some delusions of grandeur about owning/operating my own small airport.