A long time independent consultant with a JD and MBA from Columbia, Jim has developed a specialty in aviation real estate, first as Managing Member of California Hangars, which owned and operated a general aviation airplane hangar project in California, and then as President of Aviation Advisory Service, which enables him to consult on real estate and operational issues around general aviation hangar development. His experience encompasses site location and evaluation, financial analysis, development planning and operations.
With a comprehensive background in multiple asset classes, what led to you focusing on real estate?
Real estate offers me the opportunity to bring to bear many of the skills and experience I have developed in the course of my career, including financial and business analysis, transaction structuring, preparation of presentation materials, contract drafting and negotiation, and coordination with other professionals, such as legal counsel, accountants, design teams and contractors. In the aviation real estate sector, I can draw on my wide-ranging knowledge of and relationships in aviation, and do something distinctive in what has been until now largely a cottage industry.
During your long career in financial services, you’ve held consulting positions calling for focus on many types of projects. What do you believe your different positions and experiences have culminated into professionally?
I always wanted to be a principal instead of an agent. And I was attracted by the prospect of being able to do something distinctive in a largely overlooked sector of the real estate industry, instead of continuing to chase after mandates from sponsors of deals that weren't too different from one another.
Most recently you’ve focused on aviation projects. Tell us what your most recent project on Hayward Hangars has been like.
I've had the satisfaction of developing one of the best general aviation hangar projects in one of the strongest hangar markets in the country, handling everything from hiring a cleaning woman to negotiating the ground lease and arranging the financing. I first visited Hayward Executive Airport to solicit an engagement from a developer that was building high end hangars there in 2003. As soon as I arrived at the airport, I said to myself that I would like to develop a project there. The following year, I became aware that a leasehold in a prime airport location was available for purchase. I visited the site, put together preliminary projections and concluded that this project was viable. I then negotiated a purchase agreement with the seller, assembled an initial group of investors, and set up a new entity to assume the lease and develop the project. The leasehold already had an 8200 square foot hangar on the site. We made plans to construct two new buildings on the site, each of which would be divided into box hangar units that could be rented to individual airplane owners and small aviation-related businesses. As President of Hayward Hangars I took the lead, negotiating a new ground lease with a longer term from the City, finalized a site plan, retained a general contractor and a design team, and obtained building permits. I arranged construction and term loans, structured a "Reg D" private placement to raise additional equity, and identified investors. I put together an advertising campaign and other promotional activities to attract tenants and negotiated leases with them. I recruited the staff we need to provide outstanding service for our tenants, including a part time on site manager and janitorial staff. I remain in close contact with our tenants in order to make sure that any problems or concerns that they may have are resolved quickly.
Tell us about a rewarding recent client engagement.
California Hangars, the first hangar project I developed and financed, was particularly rewarding. I initially assumed that my role would be limited to sourcing the mortgage and raising the equity, but I took over an on-going role in the management of the project. I overcame a number of obstacles, implemented simple but effective systems so that I could manage the project even though I was 3,000 miles away, and delivered superior returns for our investors. Over 17 years, we paid our investors an average of 14% annually, and sold the project at a profit. The biggest challenge was probably finding a bank that would provide the mortgage. Many banks were uncomfortable with hangar projects because they are an unfamiliar property type. In addition, the amount of the mortgage was pretty small, and many banks have a policy against lending on properties on leased land. I had to approach over 30 banks before I could find one that would do the deal. Aviation real estate projects take longer to finance than most other types of commercial property.
Why did you decide to join StealthForce? What resonated with you?
I like the idea of being able to undertake selected advisory assignments to complement my development activities. I was a full time consultant (specializing in the airline and aerospace sectors) I spent a lot of time on marketing activities and following up with both new and existing clients. Since aviation real estate development is now my principal focus, I would be hard pressed to mount a major campaign to identify and pursue new clients. StealthForce appears to offer me the opportunity to get my name and background in front of prospective consulting clients without having to undertake a major promotional effort.