Investment Strategy
We believe that successful investing in real estate and aviation involves a disciplined approach with rigorous underwriting and analysis. Our goal is to properly determine the risk / reward metrics of each transaction.
In real estate transactions, it is important for us to analyze variables such as demographics, traffic counts, household incomes, building age and construction type, the “stickiness of the tenant” as evidenced by capital they have invested in the building, ease of access to the building, proximity to other essential businesses, and accessibility to transportation and routes. When reviewing the existing lease we consider the duration of the remaining lease term, current rents vs. market / pro forma rents, extension options, escalations, historical sales figures if available, and how critical the building is to the tenant’s operations. We also review sales of comparable buildings, gauge the replacement cost as well as the asking price as a multiple of the net operating income of the building.
In the case of aviation assets, we evaluate criteria such as the age and type of aircraft, the creditworthiness of the lessee, political and repossession risk in the country of operation, the duration of the lease term, redelivery conditions, and motivation level of the seller or catalyst for the sale. Current lease rate vs. the market lease rate, as with real estate, is also an important determinant in our decision to pursue the transaction.
In real estate transactions, it is important for us to analyze variables such as demographics, traffic counts, household incomes, building age and construction type, the “stickiness of the tenant” as evidenced by capital they have invested in the building, ease of access to the building, proximity to other essential businesses, and accessibility to transportation and routes. When reviewing the existing lease we consider the duration of the remaining lease term, current rents vs. market / pro forma rents, extension options, escalations, historical sales figures if available, and how critical the building is to the tenant’s operations. We also review sales of comparable buildings, gauge the replacement cost as well as the asking price as a multiple of the net operating income of the building.
In the case of aviation assets, we evaluate criteria such as the age and type of aircraft, the creditworthiness of the lessee, political and repossession risk in the country of operation, the duration of the lease term, redelivery conditions, and motivation level of the seller or catalyst for the sale. Current lease rate vs. the market lease rate, as with real estate, is also an important determinant in our decision to pursue the transaction.
Anatomy of an Aviation Transaction
Our transactions typically include sale-leasebacks with airlines and the acquisition of aircraft subject to existing leases from third parties. For engine and airframe disassembly and sales, we strategically partner with companies with the requisite infrastructure and expertise.
We typically source opportunities through non-auction-style or competitive bidding processes through international banks, airlines, insurance companies, investment funds, lessors, hedge funds, and other nontraditional industry participants. We focus on individual assets and aircraft portfolios ranging from $5 million to $50 million.
We typically source opportunities through non-auction-style or competitive bidding processes through international banks, airlines, insurance companies, investment funds, lessors, hedge funds, and other nontraditional industry participants. We focus on individual assets and aircraft portfolios ranging from $5 million to $50 million.