Central Oregon is densely populated with regional, municipal and private airports/airstrips. As a pilot, unless you are fortunate enough to have your plane on your own private airstrip or rent one nearby, upon buying a plane you’ll have to find a space for it. With the large number of airports in close proximity to the towns and cities in Central Oregon, it gives the buyer of a hangar the advantage of relatively low travel time between the airport and home.
When looking for the perfect space for a shiny new bird, most experienced aircraft purchasers have had to go through a series of challenges to secure adequate housing or storage. Seasoned owners are either well aware of the challenges of hangar purchasing or, more likely, they’ve had experienced real estate professionals or attorneys who understand the nuances of securing aircraft storage or airport industrial land to assist. No matter the opportunities or number of options, it’s important to have someone in your corner to help navigate the challenges that can come with purchasing airport commercial property.
The common pitfalls when purchasing airport hangars can include, but are not limited to, clearing the property of all previous transfers and making sure there was accurate reporting as required by the airport authority and the Federal Aviation Administration (FAA). Another pitfall can include a reversion clause specifying that after a period of time, the improvements become the property of the lessor. This typically takes place at the end of the base lease period. An experienced aviation real estate broker can help to make sure the buyer’s best interests are secured.
Furthermore, the broker with aviation experience can offer assistance in understanding the rights and restrictions under each airport’s General Terms and Conditions. The terms will be different for each airport and will govern land under the airport’s jurisdiction. These terms are a blend of rules and guidelines from state and federal laws including, but not limited to, anti-discrimination, national security, fair practices, environmental laws and the type of use for any aircraft hangar. This document is beneficial for users and owners. This will assist an owner to follow the proper documentation required by the FAA grant assurances that have been in existence since 1982, and helps the owner be prepared for any reporting.
When you buy property at an airport, what exactly do you get? If you purchase a lot at an airport to build a hangar on, you’re buying the right to lease the land, any improvements to the infrastructure, the right to build the hangar and finally, an opportunity to land that shiny new bird on a safe and well-maintained runway. In other words — location!
The bottom line is, if you are looking for a home for that new airplane, chances are you‘ll be dealing with a land lease. Each airport in Central Oregon has a different lease policy for rate and length of lease. Some are as long as twenty or thirty years with ten-year options, while others may be as short as five years with five-year options. In addition, you may be dealing directly with the airport manager, or you may be dealing with a master developer or a fixed base operator (FBO) that in turn subleases you a footprint. That footprint includes the dedicated hangar space and a land buffer around the hangar. You own the hangar, which is to be used for aeronautical purposes only, but you lease the land.
When it comes time to sell, the transaction is facilitated by a lease assignment or a new lease generated by the land administrator, and a deed or bill of sale. Broker commissions are usually paid on the value of the improvements transferred, or in the case of a greenfield site, the Port or Airport Authority may pay a commission on the value of the land lease.
The market is Central Oregon is currently somewhat tight with demand coming from in-migration while the options are very limited.
For more information on this market, contact Robert Raimondi at Compass Commercial by calling 541-383-2444 or emailing rraimondi@compasscommercial.
Robert Raimondi, CCIM is an aviation specialist and seller of aviation properties in Central Oregon with over $10 million in aviation properties sold at all three regional airports. For more information on this market, contact him by calling Compass Commercial Real Estate Services at 541-848-2444. www.compasscommercial.com/Robert
