As many of you know, my foray into aviation began with real estate.  I got my start in aviation by being asked to value an FBO leasehold for lease negotiation purposes.  While I am often embarrassed and astounded when I go back and review reports from my early years in aviation, I can honestly say that the underlying premise has always been that aeronautical property is different and unusual from virtually any other type of real estate.  As such, while the underlying valuation principles may be the same, the ultimate analysis of an aeronautical leasehold is very different.   

While non-aeronautical property on an airport may compete with the local real estate market, and as such require a comparison to the local real estate market, the characteristics of aeronautical property dictates that it must be compared to other aeronautical property.  It is true that airports are somewhat monopolistic in that aircraft owners have limited choices from where to operate and/or base their aircraft, but there is still a level of "competition" that must be recognized.  Airports typically compete against other airports in the region in such areas as air carrier service/enplanements, based aircraft, flight operations, facility and economic development, and fuel sales.  It is generally understood that FBOs compete on a regional and national basis, but it is often overlooked that, to a certain extent, other aeronautical property types do also.  As such, in the estimation of appropriate market rents for aeronautical property at an airport, it is necessary to look at other airports in the immediate and surrounding region to determine what the market recognizes as appropriate relative to lease rates. 

In certain situations, it may even be appropriate to expand the "region" to include other market areas.  This may be due to the uniqueness of the subject market which warrants expanding to other areas to assess what represents "the market".  Regardless, in the analysis of aeronautical properties, either improved or unimproved, it is necessary that you compare "apples to apples" by assessing similar rates and fees at other comparable airports.