How the estimator works
Income, not cost
We capitalize net operating income at an aviation-specific rate, the approach the market actually uses to price hangars.
The reversion
On leased land, value is the present worth of income over the remaining term. At expiration the building typically reverts to the airport for nothing.
Airport quality
The field tier sets both the rent you can charge and the cap rate investors will accept, a premium that compounds.
Frequently asked
How is an aircraft hangar valued?
A hangar is most reliably valued with the income approach: net operating income capitalized at an aviation-specific rate. When the hangar sits on leased airport land, value is the present worth of income over the remaining ground-lease term, because the improvements typically revert to the airport authority at expiration. Airport quality drives both achievable rent and the capitalization rate.
Why can a hangar be worth less than it cost to build?
Most hangars sit on ground leases. At lease expiration the building usually reverts to the airport with no compensation, so a hangar is a wasting asset whose economic life is capped by the remaining lease term. A newly built hangar on a short remaining lease can appraise for a fraction of its construction cost, which is exactly what the sensitivity table above shows.
What capitalization rate applies to a leasehold hangar?
Leasehold cap rates generally run 200 to 400 basis points above fee-simple rates for comparable property, reflecting finite terms and renewal uncertainty. Applying a fee-simple rate to a leasehold cash-flow stream materially overstates value, one of the most common and costly errors in hangar valuation.