Originally published in 1995
Only a few feelings in aviation are as warm and fuzzy as knowing your airplane is locked in a sturdy T- hangar during foul weather. Not having to clean frost off the wings, not having to suffer faulty avionics which have been subject to the greenhouse effect while the airplane is parked outside and being able to plug into a nice warm engine heater for winter operations are just a few of the joys of T-hangar occupancy. While there is almost always a market for T-hangars, the grim reality for airport operators is that there is not a market at any price.
T-hangars are like any other property investment; they require an outlay of capital that is expected to produce an adequate return on investment.
One of the biggest problems in terms of developing an adequate return is the preexistence of older T- hangars that rent at unrealistic low monthly rates. This can have the net effect of essentially creating an artificially low market, and make it hard for aircraft owners to accept newer rental rates which are reflective of the cost of new construction.
In the current economic climate, it is very difficult to develop decent T-hangars and generate a competitive return and rent them for enough to amortize the investment. The best way to generate a reasonable rate of return if you are either a private developer or an airport operator, is to get pilots used to regular escalations in the rental rates. If these are applied consistently, and in a reasonable fashion, it is possible to keep the existing market in line with the costs of new construction.
If the T-hangar market at your airport is skewed by older units which are priced too low, a good way to bring the market into line is to build units and sell them to owners. This creates two benefits for the marketplace. The first is that the concept that the price paid for a unit represents costs of construction plus profit levels, seems to be more readily grasped by aircraft owners. The second is that if there are unit owners who lease their units to tenants, the rent charged will reflect their investment in the hangar, and will begin to establish a new baseline for the airport.
– Excerpted from NOTAMS, Win Perkins, Airport & Aviation Appraisal, Inc.