SPECIAL REPORT: LAND DEVELOPMENT OEA Employment Map
1 - 2335 jobs/sqm 2336 - 4670 jobs/sqm 4671 - 7004 jobs/sqm 7005 - 9338 jobs/sqm 9340 - 11673 jobs/sqm
1 - 5 jobs 6 - 54 jobs 55 - 268 jobs 269 - 842 jobs 843 - 2054 jobs
Analysis section Advanced selection
Sources: US Census Bureau, RERC Strategic Advisors. Airports must typically receive fair market value and complete multiple
reappraisals. These requirements can pose challenges for private developers who need predictability of lease costs over the entire ground lease term for a given property. These issues become more salient depending on the availability of
off-airport substitutes to accommodate the same targetted land uses that the developer can purchase. Regardless, lease terms can be negotiated to address and overcome these limitations. Second, ask how your land is unique and who wants it? Conducting a local
and regional market analysis for targeted commercial uses brings into focus the market context and identifi es what is possible. Analyses of the relevant trade area including prevailing market trends and
local demographics will suggest what potential opportunities exist and at what value or price. Because property ground leases favour landlords, here airports, lease terms must be long enough for developers to amortise their upfront investments. This need generally requires a minimum 30-year base term with two or
more 10-year renewal options for most commercial uses. It is important to recognise that ground leases place a market constraint
on property use. However, in today’s marketplace and fi nancial environment, commercial tenants are willing to consider ground leases in key locations having few substitutes. In general, the more urbanised an area becomes, the greater acceptance
of ground leases as real estate instruments. You must acknowledge what your airport is, as well as what it is not, both
from aviation and non-aviation aspects. The insight provided by market analysis will clearly indicate prevailing commercial trends surrounding a particular airport, further suggesting the uses, which should be targeted to extract the highest and best use of the airport’s commercial property. Expectations should not exceed market realities absent of any focused economic development initiatives such as special development districts or
business attraction grants that seek to push market dynamics to more intensive development. Should the commercial frontage of your airport be predominantly
developed with one-storey retail shopping centres and outparcel restaurants, for example, it may be diffi cult to intensify the development pattern to multi-storey development. Typically, developers want to deliver specifi c proven products having
fi nancial institution support. In many cases, strategically selected outparcel uses such as banks, pharmacies and restaurants can produce higher rental revenues for airports than single story uses having larger footprints or multi-storey buildings with mixed uses which do not share the same market timing and support. With regard to aviation uses on airport property, an airport must clearly
embrace its business model, whether primarily passenger versus cargo- focused, Origination & Destination versus connecting, business versus tourism-oriented. Each model has specifi c real estate implications for passenger terminals,
airfi elds and commercial land, not only for long-term growth but more importantly the community’s vision. A master real estate strategy must align with and complement an airport’s master plan. The master planning process provides a venue for stakeholder
engagement (your third step in the process) and solicits input regarding the airport’s commercial development plans. This dialogue is especially pertinent as airports continue to balance
economic sustainability with perceptions about competing with private landowners. Engaging local planning and government representatives, private developers and the community at-large, while challenging, typically produces outcomes with greater viability. Absent other external infl uences, an area will capture its fair share of
total available demand according to the proportion of the market it already represents.
AIRPORT WORLD/FEBRUARY-MARCH 2011 37
Page 1 |
Page 2 |
Page 3 |
Page 4 |
Page 5 |
Page 6 |
Page 7 |
Page 8 |
Page 9 |
Page 10 |
Page 11 |
Page 12 |
Page 13 |
Page 14 |
Page 15 |
Page 16 |
Page 17 |
Page 18 |
Page 19 |
Page 20 |
Page 21 |
Page 22 |
Page 23 |
Page 24 |
Page 25 |
Page 26 |
Page 27 |
Page 28 |
Page 29 |
Page 30 |
Page 31 |
Page 32 |
Page 33 |
Page 34 |
Page 35 |
Page 36 |
Page 37 |
Page 38 |
Page 39 |
Page 40 |
Page 41 |
Page 42 |
Page 43 |
Page 44 |
Page 45 |
Page 46 |
Page 47 |
Page 48 |
Page 49 |
Page 50 |
Page 51 |
Page 52 |
Page 53 |
Page 54 |
Page 55 |
Page 56 |
Page 57 |
Page 58 |
Page 59 |
Page 60 |
Page 61 |
Page 62 |
Page 63 |
Page 64 |
Page 65 |
Page 66 |
Page 67 |
Page 68 |
Page 69 |
Page 70 |
Page 71 |
Page 72 |
Page 73 |
Page 74 |
Page 75 |
Page 76 |
Page 77 |
Page 78 |
Page 79 |
Page 80