Sky Harbour (SKYH) 14 Nov 232023 Q3 Earnings call transcript

Good afternoon. My name is Chris, and I'll be your conference operator today. At this time, I'd like to welcome everyone to the Sky Harbour 2023 Third Quarter Earnings Call and Webinar. [Operator Instructions] Thank you. Francisco Gonzalez, Chief Financial Officer, you may begin.

operator. you, Thank CFO, Gonzalez, I'm Sky Francisco Harbour. welcome equity earnings and Corporation. third Sky quarter conference call the investor and Group Hello, Harbour to webcast the for

have this call our well. investors Capital, We join as our Sky to on subsidiary, Harbour in participate and invited also borrowing bondholder

today's that begin, we may year's on impact asked company will to note by this Before the counsel address been that I've call, certain factors earnings.

management statements All assumptions will be may our discussed contains are and the based such come that of These filings results on statements. from language obligation on not actual assume forward-looking as should information a that description made statements. no may any X Slides Some differ you X SEC as refer of statements may which presentation the forward-looking or today well and and statements. we to are today, cause true, the of factors of update to as forward-looking for our to

let's get and Chairman So Accounting CEO with Chief Schmitt, Petro, Board; Mike and our afternoon, the Accounting Tori our started our this Treasurer; team now our Tim Keinan, of Herr, Tal introducing Manager. the Officer; us

up to have with We website this we'll a slides be on we These also this available afternoon with SEC call. been our the after questions. want few before you open filed have in X-K to slides review Form and will

the QX webcast We will and the during our will may using shortly questions you after address remarks. prepared -- written submit we platform, them

started. get let's So

trend summary for X of the This results of is selected the in years a slide. QX past the slide Next metrics. of the context

opened $XXX reflect our filing, surpassed our tenant in capital campuses with as about QX Nashville primarily note Miami from revenues invested completed least step in construction full settlement in mark at commission X revenues. should quarter. the nonrecurring nearing a and First, had in I third Miami. in the in revenues, Phoenix recently in and fuel QX increase hangars our disclosed X X $XXX,XXX function in With who and of and XX-Q leasing, that, hard arising revenues negotiated X campuses progress our in assets, Denver million terms rental our included

shortly We more our leasing activities. this will when on reviewing discuss

Looking this as open next start open function and phenomenon there year to revenue occur ahead, is cash we flowing. in new Denver and we QX as of expect QX expected and leases step continue and step to the Phoenix campuses, next tenant campuses

SG&A watching frugality expenses operating and whenever maintain Our and our continue are possible. to semi-fixed expenses and we fixed,

approaching to the flow Consolidated operating can next our activities indication something is net opened. that quadrant, in cash lower surpass next we is at surpassing and end reaching of from see breakeven earlier and Phoenix expect of Denver original campuses after breakeven, the This year. is summer as than you right-hand

Next slide.

continue terms of home way significant one make leases. Executive securing Airport, Chicago great the In rentable square in basing announced footage, for last progress to at ground we by services. our a month location Last new

before leases end previously disclosed, to second by the XXXX. expect As execute ground end of X and the the X another we quarter have we the of another year of

and lease backward shareholders is The pipeline execution our us. locked thereafter. for the it's we our the in for creation about is is value value front the in looking all the business projects Once of of believe ground effectively not in, executed,

Tal me operating of to summary this an results, CEO, it Keinan, pass With for Tal? let update. our

the following now is and filings development, I'm market, some business are Site you, last operations. because here strategy of quarter. talk to what's learned of both available, at from forward. end, about happening And airfield brief the silos: a our give manufacturing for and the includes go the I'll Briefly, Thank going the bit acquisition, and construction, we X-K in going quickly in a overview Francisco. think questions. which lessons leave business want we'll I leasing room to little way the of quite our

slide, Next please.

kind it's to acquisition and have of in of airport dozens gestation target acquisition, a actually lessons standard work process is it from you'll when and important, about is I that very now we of our throughput we're time. we ago. quite site in a long began seeing XX the lease. one on But think be I get gestation And see these learned, developed So months terms to cycle fruits be the that. versus think can many period, deviation relatively and things period about right big executing ground to bulge think site There beginning of of of that high

starting airports are pop. to So

people expect year. in As X of the operation, development half in Houston, sites permitting leases first Nashville, this X is ground got be that Phoenix, next we to In Dallas. In We've leases additional is quarter and Denver, know, an ground Miami. new Chicago. announcing

please. slide, Next

Okay.

now again, development, acquisition of manufacturing includes since So construction and RapidBuilt. the

are of the integrating We RapidBuilt. in process

and are X fields, first Phoenix. by metal pre-engineered feature The which Denver buildings will RapidBuilt

pictured the the middle. end the You see on those top can -- screen, in actually of right side

loop of RapidBuilt think the accelerating we that. improving that's improving time. we our the bottom. available as capability, it's I ambition business the to build. the The And to in but through we aviation filing, have for to go our is is on Again, scale. that continue then think, refer the if secondly, interest. Q&A prototyping bringing We our we chart down rapid it at in own happy have won't manufacturing Our highest cost there's with quality all already, a the of quality fact header and

Next slide, please.

we some think proposition. is proposition roster in like members, the how what is tenants, us. if we has Sky see are you to were stage refer at I aviation value you'd look where clear value of a feel at you Harbour an our business which our leasing, of a Current a explain today, names that could here. savviest So that occupancy moving something about can we're to where we very to concept from experimental understood the we and have We with see lot

branding program We who which with member who are who relatively us to are but been have with been for We're has evangelize. year members beginning People been now new, with a a with for still evangelists. few more us or long -- starts nobody have a time. us a beginning

Harbour awareness announcements our the will some that see in of of You'll offering. and hope personalities soon, some aviation we including public business Sky community increase

if are experiencing things we the of that to you'll term. look One you see coming first leases closely, the

occurring our the a a re-ups, our term. in premium terms. hangar, new a with tenant us coming And whether lease to you lease at or leases tenant we X XX the staying to year stagger significant From have it's rate. to we're seeing As the know, original very first bringing into been years,

that as a in So terms In new XX% escalators the to when people and have close a have CPI premium But in tenant who followed closely paying. at release, original experiencing what know, leases. we jumps. much lease us tenant bigger we're came to we we -- was case, one the

that's leasing. in Q&A. to that So come back Again, on we'll

is for Airfield #X please. slide, priority Next us safety. in operations operations,

experienced So in safety any incidents happy have report, to not we QX.

and we're feedback with is many We intimate and us. gaps. do gaps, delighted. had a do our important that tenants are service have a is pretty of members, survey finding relationship also quite have no We We what rigorous to for tenant service very

to with work been constantly we as has we And go. the service significantly So improve offering offering. them refined the

now on to We continue. right attribute the it, we that we're expect focusing we'll for But that to learned, wheels lessons to get is one as up. about talk time

aviation. that's we over We very critical are It's to shortest the wheels that make something measurable. something time. And again, up And we to talk members. about that's want business offering can already time consistently in our shorter. to Very,

as but the call detailing on we I to services. about pace Q&A provide revenue-producing a now, think expanding there it out is services array interest. we We third-party happens whole of in services footprint services, over New actually happen a It's is there's time. happy began will some know, that talk to today. roll partner, offering intend the through focus. growth that don't focus our the that the at if right is -- But people our not It

Briefly landscape. on slide, the market Next please.

we're very tailwinds. So an we're significant still our FBO not And company. perspective, from remember, seeing

the We or actually fleet, We people don't much that's volumes. delivered height. And We fleet. And the how longer what each so length, in a the fuel the care precisely, are to fly. a really wingspan backlogs a much we the has care in airplanes tail and more seeing about aircraft we're indifferent wider care of remember, average are now is how record taller aircraft footage many year, right at OEMs. square

of in aircraft you Put is up, faster over of and useful technology number time, fleet airframe have much together, footage is of hangar more as the factors actual the growing square that than also the an fleet. grows. So the life getting a going much acute. improves the deficit up And is those

in we're a Once flying think gets most. a But an matters it ones aircraft of ones lot, that. not whether a only needs I market place to think we're flying it it the not I live. observing it's the the that X delivered, lot the is or

of think we have umbrella aircraft been under time and competitive the FBO There's are we'll exactly Q&A, positive now, does. does that's have -- landscape, significant Harbour. the we importantly, from that the pull for terms Sky if again, which, experiencing And a company in consolidation the from Atlantic a what Support, In in increasing still about we Harbour Signature why seen in Sky been talk airports, we demand Flight not airports. industry of

years reach seeing was Increasingly, our of the to us. a Harbour to For campus proposition airport of the we're of us an company's it sponsor. communicate airport to first value trying couple sponsors Sky out existence, mainly

in We is it's from differentiated. doesn't and that's something exist, that airports. demand high It have a service

airport from of kind And give sense one of of proposition of see we congealing. to from value people the sponsor just quotes, a an members and how our a one couple below, one

Next slide, please. on lessons quarter. Very from learned the last briefly

we airport throughput way versus the in I goals, of to think throughput of our corporate a manner. And articulation that targeted agenda are be also about yet, value much putting to but run talked acquisition articulate have on program for more to this. We rather branding cycle of Again, a than sponsors. X in and goals place proposition value our we in marketing is time, a against So sponsors, time. setting airport to tenants, part concise corporate the will is increasingly airport don't that cycle proposition XXXX, our terms the sponsors, to and that and the

that the formula FBOs. a that to continues works expand. we out We us. recruit for We got think team don't have We've of a

that M&A. go. do the inventing greenfields. acquisition, And as methodology We Foresight we're we with FBOs grow really don't really through this

refine but to programs continue we And finding formula, by think we out the it. I to something now, quite and of robust right heavily veterans are which not MBA dominated continues acquisition the military what Navy, entire have set -- the grow only anymore. is we're but is team, that

On a integrating on thing. that. us I in development, RapidBuilt exactly not challenge country. expect construction and of work our a that benefits integration inning, I like we would considerable But it on of manufacturing construction is don't But it's do feels what that fourth the is very have is ahead integrated. know again, around taking once you we're time. inning we the tell efforts

leasing. Member

a of year Harbour is population articulate members. of and by that the investment little ourselves, That talked to terms bit as we to lease Sky We idea management community. communicate many see within members re-leasing come talk to So certainly about perhaps how some the XXXX risk having helped. helping value a and too it brand not -- that was want about again, leases year. a of from term we about term that in these to able XX We'll proposition that the Again, years originally into recent staggering management. X to and be we and right year later us we given

the in a that we you of is re-leasing X demand. the it's perhaps or matter have from were that benefits reaping premium, unintentionally One that when market, hangar bump, and only of supply just hangar the

anyone real command lease-up put original than You're shot. in versus inventory a premium ever you high market has able much have really X a a a to of campus, our on very where inventory, more

release higher leverage your on So is the terms. significantly pricing

Back but airfield said on I is a that optimizing have Q&A, little wheels up. earlier, Francisco. metric metrics, are of one. time we're in a now we bit for operations, the lot offering. And you, primary to if can There again, the service And talk time to that about other we the differentiated then is as

Tal. you, Thank

capital and about investment decline in That of reflective million is $XX with U.S. quarter, a liquidity in the from our We Let's and the $XXX quickly review position. our prior million about closed third treasuries. quarter CapEx. cash continued

is next Our portfolio our Treasurer, treasuries and U.S. to Herr, by short of me. is Tim managed very sitting here

We invested into as our roll X% to of X- be new waiting north cash and continue to U.S. treasury X-month we earn in bills, hangars.

more analysis IRS. life constitute X.XX% over hand activity bonds the we're capital escrow at the a depicts as amortization prepaying the In our funded cost $XXX the XXXX. of of composed maturity rebate due X XX and it. interest years, earn permanent principal years, cash average for debt company. debt rate and meantime, With slide the final right no bonds. private are X% and to we of And bonds bonded for required our These The these of of next XX preparing have the by that this required of the an and the through years coupon middle fixed we million

slide. capital, Talking of permanent please, next

ultra Altai As ]. last November includes on names [ through many ] we common of stock, are future. capital, funding participation you investment know, [ look net investors as The tenants business investors Capital to offices accreted individuals. Besides family of X over of group $XX.X new investor the equity forward PIPE us XX closed the in we of in potentially with of marquee the million growth and and aviation, of worth high management them having users with many

for illustrates at the potential airfield existing we slide our economic were fully the scenarios and various next unique Until portfolio. sizes X This PIPE, please. company's funded on recent announced slide, Next campuses. capitalization

in closing first of we we'd Or and will the the and to close for group first XX and -- fully another second an could additional to could we airports. the we XX divide to XX campuses additional XX and in to of X. XX do to lower or additional campuses chart. do XX $XX so be the additional be the Phase X airports can the expect sites for X airports, of Now Phase on a on doing we November XX additional between column of up funded PIPE, phases usually campuses, cumulative we Again, X, just presence Phase X either million -- X XX -- obligated the will

as illustrated new we equity with debt anticipated This also also the assumes pair here. financing,

X. markets. yields and on the to bit within our margin XX XX cost, average airports years, we prosecute yield XX% to which, from NOI XX% on a business in our In than of taxes in as airports airports expect a on our enhanced we level we XX%-plus more airports, target pretax expected from note to XX scenarios, as the unlevered to move lower-yielding to unit equity. be come next are continue first We model XX profitable yield approximately we to the XX as couple for our the cost married be move with or yield returns leverage, we will to Please in expect airport on economics project-level as that XX

strength Yet recent increase fields the rates the pretax yield us levered investment-grade to will and of the offset other in potential project interest lower bond XX% debt This of ROEs. in achieve and market cost. borrowing increased expected the NOI things continue program will the our overall still to and future plus help these XXXX allow yields lower will equal, leverage ratings support to in

slide, Next please.

Capital, here's While bond the on private of the a subject Sky of subsidiary. at borrower liquidity bonds, breakdown our activity Harbour

original [ phases as We be project the fully continue remaining for Orion amended. in to funded ] the

Next please. slide,

referred in stock occur open. expenses, and consolidated employee continue holding Capital, except figures group in territory the positive turned this new results, obligated largely and to of warrants to cash as and SG&A move obviously award which cash the Here's company outstanding for to campuses past at impact group. obligated the Please and note, quarter is the at company. expected as positive our flow a Sky revenues summary mimic Harbour holding otherwise These flows of the

continue but PEPS of program our pay that protect of our of to in also are projected to the matter offering especially It company on just a who our boring And the debt I want program. [ we terms we the to as this is is policy, manage bond this will at reiterate Not service time, to to in to of XXXX. coverage exceed program. bondholders ] a commitment that ability we time service the sacrosanct. the on August a call consider

Next slide, please.

continue our prudently and we in webcast, our opportunistically. funding to last will seek manage growth discussed permanent we capital As

funds additional real share continue in private our resources to with bonds use will a partner when when estate appropriate generated the activity fund growth. right at order equity infrastructure to internal on basis accelerating needed, raise and issue prices, We our timely

me to Let pass it thoughts some final business strategy. on for Tal

go We can back features to ] Francisco. the [ during you, these Thank QX Q&A.

business You can put the strategy up slides.

Here we go.

Okay.

can So we it pipeline Side more that. a quite feel expected good much about we more into robust like The briefly, in to acquisition, Q&A. than is very we're get during position. anything again, very we're and in detail excited be, we

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materializes challenge we projects be have development. a the -- to as up than running parallel scale for very in the on far side We We'll more soon. pipeline today on ahead also HR are

Stay discussed in member for a Sky rollout strategy branding of and ambassadors. strategy brand real leasing, XXXX Member a we Harbour. tuned for

operations. airfield On

to long -- have on no We're is that, in training where safety. and the programs to term medium industry be going It in we that and operate to very #X an always both we So be. ensure compromises feel we I'd that's robust programs, demand, say, monitoring and term, near have will safely. term, priority

we campuses we Sky said, is services. are, up time side. one up wheels is alluded to now one Harbour the the term, first targeting I #X. to rolling are There on we've services. in of service that be what detailing perform on to there's rolled crew is national metrics specific provider, then that out the to out but We be a detailing. begin the priority to of medium And each all most as to earlier, again, third-party matters others, the wheels Again, not believe with partnership on Which to hangar is it's whole members. will Time is in but a a now, campus going a permanent in aircraft in-house, we X-person services with rolling now. out, right roster

priority. the So scaling is #X

every To time palpable. very X In now moment we're a of a crew lot we've culture is established lot ahead. this place, member Harbour's about that that interacts everybody the done to We've a in scale. and in where of history with a general, or year think I is Sky learning. it's And methods, I think Harbour, experimentation, procedures put what Sky who in is

of important what areas With the That's table all integration between functions. to new leasing site our company little very those between where we then prospective investors of bit right we us through that growth and Functional them, capital and think those our good both have integration to part the to and there We're we're in now. are gain at we those sorts lucky who push I doing specific could able for about is Very of And strategy. be X go We've position development, acquisition, bit to silos. to of -- a as looked can areas efficiencies into understand operations lot improve. tenants where we the attract spoke that, forward, Q&A. a a really talked to cap we're are Francisco feel tenants. and a little interaction

queue. concludes our please go Operator, ahead Tal. with you, This Thank prepared remarks. the

that who from rates relative to on other under are "What is the rental [Operator existing X of airports Michael asks, Maxim Diana Group, first the is negotiation?" and Chicago to ranking Instructions] So of our question your based relative

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is updates ], "Can question Amir next lease-up asks, from per rates about foot?" Our give the you who [ us Salar Kevin

in say revenues can so we we you is we've think year or fuel in rent in noted -- basin that business, we're Harbour Sky the So although business, Sky it's general we're tenant. to fuel Harbour. that cost last introduced control -- I us not we have for be important of in the the entire able the may to understood at And the

looking we foot. take now per like we're Miami, was now. in, what rates at the you some low rent What mid-XXs give leasing airport XXs began should is low- blended square That say average if I indication. can is leasing it's the right we're per I to ago, foot, the today. square it, what call in it So to an very year difficult so a -- say where

asks, are question ADS, discuss you [ How ], in mitigating currently The delays construction construction biggest risk?" OPF "Can are who at is what Skill factors APA, next you historically at delays? and this from Peyton the

Yes.

building And would things use biggest as warehouses, pre-engineered So had we've of space. the not was with of construction. we types looser. I the issues other lot But know, a access become that. that address on to orders the way, in in taken the like metal building to real challenges RapidBuilt. centers, say I data of we're step been and has times metal It's our components. lead By problem that's just hangars little X you a can say biggest It's that XXXX pre-engineered materials. bit

So ourselves. now it we manufacture

earlier, said are I there challenges. integration as Now

of will which a forward, by kind constant lot projects, to happen. be that flow of a about having of is ameliorated Going

of have of a projects we're once at So our steady we ramp-up a ahead challenge state out. processing we parallel, gets us. But believe that a in kind of cost

investors business elaborate?" We Group. aviation. to you Maxim of question your another "You savviest as from of have Can some Michael refer the in Diana players new

I'll Tal, coverage I again, your that. we comments, thoroughness And of of company. take very reiterate Tal's it's Francisco, appreciative Michael, on the research are the

just indeed, we Capital are PIPE that focus technology by that So of on ] a -- infrastructure led Altai together group that the And brought space. our closed that investors [ well now as known well. in the also

we disclosed original So net our time ultra the XVC, private, the investors, Boston ] that part the to offices other certain Raga of Partners closing as of came [ remain Capital And and very worth at prefer PIPE. joining Due Omaha, West Partners. the of PIPE, they're Center family individuals and

long-term either and they Again, who relationships aviation. business to savvy and their we are are are creating also on their aviation, planes very own a group because also active holders friends have investors of business close of or in very

So we're forward continue growing investors of capital group to the company. base we the as to grow this continue looking of

Our across and current costs foreseeable markets? next to do And ROIC?" ]. construction question [ vary costs bring from Skill what and construction are "How initiatives down improve is Peyton

any think real estate question, question varies Thanks really is it's and Yes. This it's Tal I the actually What in location-driven. It's revenue, business, again. that. astute for like across right? an Peyton, is markets

costs markets. that actually much vary across construction So don't

But looked but manufactured manufacture over about us, -- a middle in does meaningful the have tighter to There timing. it way, from costs -- that is would geography, very above is variability comes that that everything What construction have that. By it actual finding for timing. just like work, Now actually One facility being about costs be driving across ground construction a we markets. an So facilities. not us difficult by we retrospect, goes do less that perhaps that drive components have we control cycle or of was grading more was mistake. site walked much range There's that or issue to mind we we so a in that construction we're to to costs much pencil. right? away

so but of revenues high possibly things Again, just like. costs. looks it in, much But think the ground though, not what all are the can you it. of absorbed grading, thing have function that Once retrospect, in would drainage, site quite which in so that get Again, market that sort like market a above affect construction you're they're I tight.

you about -- a to question I real can about bit, location. What Fundamentally, do but acquisition. RapidBuilt site little talked question is this. we alluding is The your it's think

development much not variability country. and really the If going in the you're to have that in markets costs, it's richest we're about targeting revenue now,

looks more OPF. upon online Again, Sky supply from hangar [ at like "It Peyton coming this How Skill ]. would affect there's H's rate tenant renewal?"

fundamentally of to new there's you're year a community I scarcity referring general then different community as for and offering. up probably see certainly X from competition -- at is believe Opa [ hangars of the FBOs, So I those Yes, either that new business. our there X of at helps our really that. FBO to ]. referring opened We don't you might hangar's our be FBO are last think an Locka offering hangar product. But in

wood have So different if people it with offering. and who base there we do expensive -- space it's hangar Harbour, are less significantly the Sky field fundamentally a even just were were on available if other even

some most coming Our about tenants Are rather are on next additional comments multi-tenant than question you single ]. Slezek tenant?" board. -- your from releasing, -- hangars referenced Robert is "In [

again. Yes. Tal Robert. This is Thanks,

base of private concept X So we've experimented is And with bulk was the that all completely a little year still all that's hangar, remember, private or with the spot. concept where a called all that hangars. hangars, hangar, bit. hangar, see X in the might same roommates last right a I now X your we would aircraft -- aircraft, original We still in have tenant. X positioned tenancy began experimenting semi-private

a private Challenger a finding possibilities that, aircraft with in of is for space, or but us. the -- a Falcon up opens something that other aircraft. or you're XXX for have hanger it like office private smaller flying You lot parking, We're your if a

the So aircraft. That just Most those we Falcon down XXX. at It that be tied take entire not hangar. an the way a for was smaller by addressed might mistake. was Houston building of in beginning hangars in those privately be to for are owners hangar happy to aircraft

of always could with know very X X comfortable fit of hangar those are X those closed. your is you others. of is constant maintained. it's not privacy Do The owners X being in You a or traffic. hangars. Most Again, standard neighbors. transient aircraft door with The our

is that X lifetimes, perhaps finding occupancy well. convention of the we And wingspan the because those FBO as square an we of We're benefits that the footage use the than of aircraft. in as -- hangars XXX% can achieve greater that of side works do quite

and You more geometry feet XX,XXX than XX,XXX of airplane play square hangar. of see that around can with square into the can feet you get far

[ is opposed flow. these business is you dividends? on to potential retain paying management's cash to Jackson question within The the not with flows next Alan excess dividends deployed?" thoughts paying quarter, compound from is cash cash how of excess ]. as "Last mentioned Why the What

in we last the -- But markets this that it's we a very can is will our and that's investors. price, a cash converting as that is when the be the for the capital Hi, right, And as call, that critical Thank in business time have at like to stated our continue to now, lot. access we're to start indeed maybe additional the discuss and internally Eventually, been we because efficient for Alan, for cash the REIT dividends we contingency. conference paying ultimately right equity ramping would assumes something retaining Francisco. Right we up. you, question. that generate the

it and So REIT -- start will that, to do we flow unit use if towards we'll campuses invest as you structure. the for suggested, our we arise, can given a cash continue our don't attractive economics in then, the dividends paying If to move opportunities if shareholders.

very strategy, all question, but think So we that's our basically time. the about good a something

hangars Robert as or hangars ]. of in XX-Qs, "For XXXX from June configuration?" September Our and is projects abandoned, from Were a XX XX XXXX. change [ next some development question in properties fell perhaps to Slezek the

you probably Okay. in a disclosure I'll regarding of question. couple for hangars. And the our more take thank we add and should that, footnotes

we campuses roughly are the XX,XXX hangars, size that is the square which experimenting double of a the are in number in do basically hangar formats. development some And when are differentiate we which report typical developing ], is Tom Skyboard larger we not a now. [ feet, hangar Skyboard mentioned, [ XX size. XX], Skyboard As double thus, with [ that future of which or ], now also we XX between --

actually did is the higher X So But indeed in that thing The we're square dropping we a mostly it total you development. moving saw as Land number that, change phase the that happen probably lease the square in terms for at footage, led in is expire. is configuration If in notice rentable footage of of Sugar hangars. you our in second disclosure,

experiment we nicely, with Land, our was first attractive are as that our at fixing, was but that recall, flowing so hangars as we now not not it of It the do Sugar opportunities front may that all it's a campus. drop is X all we're and with about that of and a we -- you in removal. have doesn't Phase that X things location It's decided to us, cash it. where that happy happened, campus, As

ground how from is Nashville?" Land, anticipate the build The and do Opa site? lease? planned anticipate site? do And Sugar next How was on the you Benoni ]. question [ surrounding Chicago long How Locka color to to differ provide that "Can from clientele many you please you the price for the the hangars is term? David What additional paid

couple There is there. a This are right. again. Tal in questions of All

pay David, So for ground we the don't first, leases.

One of of doing there the benefits is is this no upfront payment. greenfield

we So more at the call total it's hangar we're square Sky of to lease using made time shift, of Harbour of Happy square perspective. the now. hangar but feet our from XX as get hangar that roof, Chicago. about I'm each to for the We're term footage The very why following what talking point, XX in changing. something efficient Chicago. hangars under those years it -- XXX,XXX order just -- into this we've in on is Francisco's number larger, on it's is The mix

look center. I do filter feet. clientele, runways airports Executive on X,XXX business the feet. sort We the attract which the I of a on of newest, a We had think largest most clientele, that terms call didn't runway. thing know, as of of have has interesting Arresting In people X Chicago System X,XXX than the we to metro highest-end shorter the is tend the an X,XXX-foot think got runway. say I -- a It's can at EMAS, used an to in the jets Emergency

conditions we And X other things a works that is certain very that in there the well. are of X,XXX-foot among under which learned Chicago runway places

jets, business Bombardier can GXXXs, base largest out -- that Global runway. XXXXs, at Executive and the Chicago of Gulfstream our So operate

again, airport So for from goes of there's that's large has this Chicago, a market own owner our Chicago's... of Each an But X locate into learned airports of X selection criteria. a a not example, but jet think, that is its length. Houston with I nuance lot lot where target particularities. might runway We that the the

The or overruns projects? next seeing issues, many construction are Megan]. with at offering as the competitive experiencing discuss [ airport space." cost you is any question environment we labor others "Are hangar MIA from Please or D.J.

Yes.

we Tal is experiencing We industry. this So everybody I -- else look, the again. is think experienced in what

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question year refinance Philip is from The an option Bristow decline PABs year-end?" [ you next if next rates ]. for if raise "Will there before to be

will the you're of between those very X and appreciate that investors that we I'll I And thank follows all Philip, materials. questions in closely, calls. also you're for you, reading take your that. Glad our And conference say that question. come that

that over that separate XX-year outstanding, private it's benefits So us of have a yes, bonds remember on And when par with activity we we are is to the portfolio the I deal. bonds a have a come of allows -- various taxes one program, bond the time not a bonds call.

the group, basically will join So several. issue join next the bond obligated on

optimistic why season we so are X it fact will a secure which is deal investment-grade on go forth, next the to bond the ], on support to expect of benefits already and [ ratings. that XXXX, cash So rainy we and that -- portfolio there's flowing secure when collateral to in so

like achieve in that interest the in we'd the And And savings market issuing of that recent basis experienced go when points in can increase bond reduction market, have type months. spread XXX to offset that's will to nonrated. we ideally significant XXX rate when a to of the credit versus we in portion

ideal equity time now our permanent funding that will time between bond might terms us and be will market. now be we of with in bonds it's position the projects the debt the a and in investment-grade to point, at solution. the the do in time And come More we bridge will capital then, between interim achieving and on that to within that So in that if capital, you ratings. later, to look

The from customer source investors groups target? question do yet costs? your acquisition you customers? help?" would your easy new be next Can you've Christine Thomas. which customer not your targeted is to are Are "How What there

we Tal. the to from customers, which haven't might done. This I original guidance The for of some Christine, the Yes. question question. stem get is using was -- That your plan. think Thanks, original on really in to and brokers our

you at there. a financial if models, have our I brokerage look we significant expense did in think pretty

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investors. In new works new terms how groups of with it our and

of owners more multiple among frequent than fleets are So aircraft that aircraft investors and our own actually market. new X

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looking something we're We but that haven't it's at. done that yet,

in brokerage add we little of very terms paid Yes. fees. that just I will have

and this think less $XX,XXX only inception than year. I $XX,XXX since

having open moving having it business campuses makes As Tal of various fashion, and a of this in a good running probably national having cadence it's leasing a by And and staggered scale marketed very of our internally. doing for these again, scale efficient mentioned, internal comes it group center. of in

hangar is industry? ]. new The [ Same Salar the the next economy? with space the are in from XXXX?" Amir is question for Kevin absorption space markets softening as changing How "How of

for if of aviation market the got grows. It's earlier X we were fluctuate, it's is a the economy, owner is case square it U.S. in now hangaring you severe aircraft you the in somewhere. I is alluded pull It is That to are say because not claim drives of if as business in the Tal again. down. less fly less, doesn't the be that the recession, once I to Kevin. right? soft footage fleet, an I an and aircraft owns delivered, it's which flying, -- bank business would the consume live what to different a Thanks, a the up, even go would goes if what extreme, would this that not fuel. can only very aircraft really fuel it's Yes. But levers

gets in the demand So once aircraft we feel locked delivered. the that gets

there's from we think, So insulation, significant economic the cycle.

to you question you think said leases forward?" about the Is Matthew going execute ]. is next The Howlett expect this "I XXXX. expect X from in you ground [ pace

that the ground Tal things this in actually And of I the leases put -- think This seeing an X of X first estimate we of Yes. we you're again. if is is half do an We starting XX which out is are we if right? dozens many ever-increasing it about should ago, sprout. And right, this seeds not dozens, to do it starting pace. now We do months at planted right, linear, of XXXX.

So a execution to biggest story. will We be our linear challenge this expect be don't here.

Or that in Instructions] time next something is is the Chime you to think of line for Connor year the now?" X-plus do structure? from [Operator years The you something next kind a "What ]. possibility happening the from this conversion you is see see a Is of or question [ this lines X? REIT along

that will on to in something a more [indiscernible] out so flow cash be question. long-term into a a flow, growing, dividend as know, to conversion call, for that And new flow to growth which, discussed definitely to Connor, once -- REIT, thus, the of projects. of currently. that's mode, need you're a we this we way your may convert we cash a in you medium you, as We're want No, you certain and continue Thank required earlier strategy. -- to percentage cash we're REIT, investing

medium the years. more term, definitely X not So the in long within something next to

in be Philip the press pipeline is be from outside the Will other phrase airports Bristow. question next was locations?" the there America close Can used the United to release? "Why North XXX States? The

about Tal. short in is operate is the in. right answer world We yes, the United regulatory of States, airports here jurisdiction to The XX% on this the outside United think Philip, is, States. X

certainly it attractive pursue. that are is enough but there So to exceptions the low-hanging fruit, are

us say want of pipeline go, terms I speculate a direction to number, target on I here. to examples out one, Sky attractive. airports I'll can we where of understand for couple turned Harbour. you're of understand to the a overlooked but that I airports many of examples can be think thought think we actually can't good airports now many now not we were the that headed of that I of Number don't of In right are things. and attractive

year So are not I X,XXX-foot opportunities for a under Sky were Harbour gave a completely looking which of and the ago. conditions runways, we certain example of fine the up that opens at lot

we're universe development The but last larger. for on thing yield value denominator in are that using Harbour all the prototyping, we're get per-square I'll you vertical cost engineering, taking cost. the To say economics that existing development of refining, foot of get and measures can working gets airports on integration, costs airports on only the on viable Sky this our not down the better, unit is understand, the is as can extent the that that we through do

terms. a want you're So going put same now, the where but in on right exactly the I number question. with that I to We're don't understand predicting

remarks. questions time. Gonzalez to We have no it further at over closing I will turn Francisco for any this

being I for in to questions, us there joining no this for and operator, and thank want you, interest Thank additional everybody Harbour. afternoon Sky your

can may investors.skyharbour.group. directly through always at you Additional www.skyharbour.group, e-mail out website information found be in and reach our additional questions with

Operator, With we a have will our let please participation. us concluded this, campus, Thank for If webcast. tour. arrange you. you wish to a thank visit know, we your you and

Thank call will today's and conclude you. webcast. This conference

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