May Build T Hangars at Small Airport

[Airplane#4904]

Our small municipal airport only has 12 T hangars. There stays a waiting list as long as 1-2 years. It is city owned. The city has thrown the idea of additional hangars around for some time but always delays it or denies it due to funding. I'm considering approaching the City and seeing of it's within the realm of possibility to obtain lease for the land, and building the T hangars and renting them out myself. I feel like there's demand enough to see a return on my investment within a reasonable amount of time. We are a small rural airfield but I constantly hear of people from the busier airfields 45-90 minutes drive away looking for space.

Me landing this deal is a long shot but I'm sure someone here has built hangars and leased them out and I'd love to hear how you went about it. Are there any aviation specific codes or regulations in addition to normal local commercial building codes? What was your biggest expense besides initial construction? Any advice?

Thanks for any input.

 

[Tools]

Only thing I know is fire suppression requirements have changed since most were built… Look carefully into that.

Might change configuration is all I foresee with that possible snag. I think it’s a great idea.

 

[midwestpa24]

I would encourage you to talk to your local building official early to determine what codes they will be using.

We recently built a set of 10 at-hangars for $1.5M on an already shovel ready site. 43 foot wide, I believe 12-14 foot height clearance, from Erect-A-Tube. We did have to install a rated firewall in the center to break the building in two for fire code and to avoid the need to sprinkle the building.

Do the math, and see what you would need to charge to recoup your investment, plus cover your land lease and maintenance costs. I have a feeling the answer will surprise you, and is the reason you don't really see private investment in T-hangars.

 

[Airplane#4904]

Good call, I didn't think of that. I don't believe the current T hangars at the field have sprinklers or anything.

 

[RyanB]

This is entirely something within the realm of possibility, but make sure you accurately calculate your return on investment. Typically it doesn’t pencil out as well as many think it does, hence why it isn’t commonly done. The less land development needed, the better.

You’d need to enter a ground lease agreement with the City, hopefully with terms long enough to allow your investment to be realized.

 

[Let'sgoflying!]

The idea is great, good for the city (more traffic & gas sales) ; for the owners who want hangars; for you.

Possible stumbling blocks: our leases prevent subleasing (much as I disagree, there it is)
Would the owners rent from you and you have a lease with the airport? (if so, would the onus would be on you, the hangar owner, to ensure aircraft owners remained in compliance with all the usual airport - tenant lease conditions?)
I'm not sure the airport would want to hand over control of so much of the airport to an outside party as described. I believe there are FAA stipulations (assuming this airport gets federal grants) that require the airport to 'exert control (and maybe ownership) of all improvements on the airport'.
I have also heard folks say airports don't want one owner to own a large share of available hangars, to prevent a monopoly situation where the landlord can then prey on renters (that however, assumes subleasing is even possible).

Hope you can work through this, it sounds like a great idea.

 

[Let'sgoflying!]

recoup your investment, plus cover your land lease and maintenance costs. I have a feeling the answer will surprise you, and is the reason you don't really see private investment in T-hangars.

would you also need insurance or could you trust that the lessees would have their own and you could never be named in a claim?

 

[Kiddo's Driver]

Add solar panels onto the roof or as the roof, and sell the power under a long-term power purchase agreement.

 

[Airplane#4904]

I would encourage you to talk to your local building official early to determine what codes they will be using.

We recently built a set of 10 at-hangars for $1.5M on an already shovel ready site. 43 foot wide, I believe 12-14 foot height clearance, from Erect-A-Tube. We did have to install a rated firewall in the center to break the building in two for fire code and to avoid the need to sprinkle the building.

Do the math, and see what you would need to charge to recoup your investment, plus cover your land lease and maintenance costs. I have a feeling the answer will surprise you, and is the reason you don't really see private investment in T-hangars.

Thank you. I assume you did the asphalt taxiways up to the hangars? Did you contract someone to build or do you do your own construction?

 

[Airplane#4904]

would you also need insurance or could you trust that the lessees would have their own and you could never be named in a claim?

Insurance is on my list of gotta have. I've reached out to some agencies and prices vary from $800 to $5000 a year. The more solid plans I have I'm sure that price gap will close.

 

[RyanB]

would you also need insurance or could you trust that the lessees would have their own and you could never be named in a claim?

Depends how the lease is written. I’d want to require it.

Thank you. I assume you did the asphalt taxiways up to the hangars? Did you contract someone to build or do you do your own construction?

Government sponsored construction has to undergo a bid process. Private development would not and could be sourced through someone of your choice, typically. It’s still wise to have the Airport’s engineer consultant review plans.

 

[Airplane#4904]

Depends how the lease is written. I’d want to require it.

Government sponsored construction has to undergo a bid process. Private development would not and could be sourced through someone of your choice, typically. It’s still wise to have the Airport’s engineer consultant review plans.

Very true, that's the main hurdle I'm concerned about.

 

[midwestpa24]

Thank you. I assume you did the asphalt taxiways up to the hangars? Did you contract someone to build or do you do your own construction?

We are the airport, so we had to follow public process and bid the project. Being government does increase the cost

The $1.5 million did not include the taxiways and utilities, those were done previously to create a shovel ready site for the building and were additional costs. The only reason we as the airport make the math work is because the project was funded through grants, so return on investment does not have to be guaranteed.

Just for easy math, $1.5M translates to $150,000 per unit. Assume a 15 year business loan, $10,000 per year, 12 months means $833 per month for rent. That is no interest, no utilities, no maintenance, no insurance, etc.

Outside of major metro areas, how many people are paying $800+ per month for a T-Hangar? If we charged that here, we would be accused of being anti aviation and run out of town with pitchforks and torches.

 

[midwestpa24]

would you also need insurance or could you trust that the lessees would have their own and you could never be named in a claim?

You would want, and probably need insurance. If you are borrowing the money you would be required too.

Another data point, property insurance for airports is going through the roof. Ours has tripled in the last year, yes 3x what it was. Many underwriters have left the market, which didn't have many to begin with. I'm told too many tornadoes hitting airports and resulting in multi-million dollar losses.

 

[Airplane#4904]

You would want, and probably need insurance. If you are borrowing the money you would be required too.

Another data point, property insurance for airports is going through the roof. Ours has tripled in the last year, yes 3x what it was. Many underwriters have left the market, which didn't have many to begin with. I'm told too many tornadoes hitting airports and resulting in multi-million dollar losses

Tripled? Dang!

 

[dans2992]

We are the airport, so we had to follow public process and bid the project. Being government does increase the cost

The $1.5 million did not include the taxiways and utilities, those were done previously to create a shovel ready site for the building and were additional costs. The only reason we as the airport make the math work is because the project was funded through grants, so return on investment does not have to be guaranteed.

Just for easy math, $1.5M translates to $150,000 per unit. Assume a 15 year business loan, $10,000 per year, 12 months means $833 per month for rent. That is no interest, no utilities, no maintenance, no insurance, etc.

Outside of major metro areas, how many people are paying $800+ per month for a T-Hangar? If we charged that here, we would be accused of being anti aviation and run out of town with pitchforks and torches.

I know many places where $800/mo hangar rent would be welcome with open arms…

I’m thinking of places where the FBO wants $1200/mo to park…. Outside.

 

[bonefishpete]

Construction costs have gone through the roof. Generally I believe the city county who owns the airport gives you a long term land lease and at the end of the lease the hangers then belong to them.

 

[RyanB]

Construction costs have gone through the roof. Generally I believe the city county who owns the airport gives you a long term land lease and at the end of the lease the hangers then belong to them.

You are correct, but you should also get first right to refusal on renewal.

 

[WDD]

What is the critical mass on the number of T Hangars? That is, it cost $X just to put one in, but because of shared walls and what not, the cost for building each additional one is cheaper than the one before it, and the average cost goes down. At some point the curve flattens completely and it's then just a matter of building the number of units that the market will support.

What about building a covered tie down vs traditional hangars? Reduce the building cost, maybe the insurance costs, less codes to deal with.

Here is ATL land, a hangar would be nice, but they are impossible to get. A covered T would give me 75% of what I need (protection from hail, keep sun from cooking the plane, etc.). I could see putting a truck bed sized locked tool box in the area to keep some supplies in. Assuming I could also get an electrical outlet, I'd pay you $400 a month for that. Did I mention I'm in ATL area LOL.

 

[ArrowFlyer86]

What about building a covered tie down vs traditional hangars? Reduce the building cost, maybe the insurance costs, less codes to deal with.

I've often wondered why covered tie-downs aren't more popular. It's amazing how much worry can be eliminated by throwing up a relatively inexpensive piece of corrugated aluminum over the plane as a roof. Then just throw a dock box next to it with some storage and you're half way to the value of a hangar.