An Extreme Way to Guarantee Hangar Space

Crashnburn

Crashnburn

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Crashnburn
I was looking for hangar homes at PRC Prescott, AZ Regional Airport) and came across an ad for a huge hangar facility there for $2.8 million. And a cap rate of 8%. The hangars are 100% occupied.

I’m not a financial guru, by any means. What is a Cap rate in this context?
 
A cap rate is a calculation used to determine the profitability of a real estate investment. In essence, the cap rate is the net operating income (NOI) of a property in relation to the property’s asset value.

Theoretically, that should generate 224k in income a year. Theoretically.
 
My way is better.
Stash drugs in a bunch of hangers/planes, then call the DEA.
I haven't actually tried it yet as I don't need a hanger, but if someone wants to file the serial numbers off and run with it, let me know how it works.
I'm flying out early next week to look at another plane,so maybe I will need a hanger in my immediate future.
 
$2.8MM/0.08=$244k net operating income, presumably from hangar rent (revenue) minus operating cost (expense without the loan payments included)
 
EdFred said:
A cap rate is a calculation used to determine the profitability of a real estate investment. In essence, the cap rate is the net operating income (NOI) of a property in relation to the property’s asset value.

Theoretically, that should generate 224k in income a year. Theoretically.
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Thanks.

Next questions. This is on land leased from the city until 2031 and two more 10 year leases after that. So no property taxes? Right?

Ballparking it, what sort of interest rate could I expect on a property like this!
 
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murphey said:
Don't forget taxes on the land.
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That's already figured in. NET income.

Crashnburn said:
Thanks.

Next questions. This is on land leased from the city until 2031 and two more 10 year leases after that. So no property taxes? Right?

Ballparking it, what sort of interest rate could I expect on a property like this!
Click to expand...

That's a question for the city and a bank. It's going to vary by municipality and bank. But I'm gonna say, conveniently....8% lol
 
How is buying a hangar that’s already full guaranteeing hangar space?
 
Salty said:
How is buying a hangar that’s already full guaranteeing hangar space?
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If you own it you can determine who puts their plane in there and who doesn't. Not rocket science.
 
EdFred said:
If you own it you can determine who puts their plane in there and who doesn't. Not rocket science.
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The planes in there don’t have contracts?
 
I imagine a cursory contents examination of your new hangar bloc will uncover someone in violation of their lease terms. Usually some miscreant who is using a hangar to store boats, RVs, or use as a commercial warehouse. Most leases I've seen require an aviation activity if not an actual aircraft. Find the first one and boot his azz, voila, new hangar space. Probably a few dozen new hangars if it's anything like my airport's neighborhood. :D
 
Crashnburn said:
Next questions. This is on land leased from the city until 2031 and two more 10 year leases after that. So no property taxes? Right?
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That will depend a lot on the jurisdiction. Different airports offer different lease terms. Same with taxes. Here you do owe property taxes, but only on the value of the building improvement not the leased land.
 
Crashnburn said:
Thanks.

Next questions. This is on land leased from the city until 2031 and two more 10 year leases after that. So no property taxes? Right?

Ballparking it, what sort of interest rate could I expect on a property like this!
Click to expand...

You might be paying what for all intents and purposes amounts to property tax via Taxable Possessory Interest. By interest do you mean what you would be paying on a loan to ‘buy’ it? Finding a lender that wants a Lease as collateral might be kinda hard.
 
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It’s not really an 8 cap when you have nothing in 29 years when the lease with the town runs out.

Brokers smh
 
Randomskylane said:
It’s not really an 8 cap when you have nothing in 29 years when the lease with the town runs out.

Brokers smh
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Yeah, it's 5.2%

You'll pull in 7 mil and some change over 29 years, but you lose the 2.8 at the end. You still clear 4.2 million over 29 years, or about 147k a year.
 
So, if you can get a 3% loan on 2.8mil you can have a free hangar for 29 years. ;)
 
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