KCM

I invest in and follow undervalued companies, special situations, or businesses that have durable competitive advantages.

[Greg Sydor 🛩️ @sydor_greg]

Ok I’m impressed Sky Harbour @KCapMngmnt

Building hangars in major cities is no small feat

[Brad Thomas @bradthomas]

On June 7, I published "Sky Harbour: The Ultimate HALO Investment Taking Flight" on @SeekingAlpha. Since then, $SKYH is up 13.2% vs. just 0.23% for $SPY.

Yesterday, another major catalyst emerged: the new Van Nuys hangar lease, which I estimate could add ~$ 5 per share in value. I'll be meeting with management again this week.

Follow my latest research at Wide Moat Research (link in bio). ✈️

[KCM @KCapMngmnt]

@marginofdanger No frustration here, promise.
Last one: Circling back to your original question. NYC leases you Central Park land for 50 years at $10/sqft with permits to build luxury rentals. Valuable piece of paper or not?

[KCM @KCapMngmnt]

Sky Harbour just landed two ground leases at Van Nuys — ~25 acres at the #2 business aviation airport in America.

Land at VNY essentially never comes available. 230,000+ annual operations, home field for LA’s private jet fleet, and a hangar market that’s been maxed out for years.
$SKYH

[KCM @KCapMngmnt]

Your argument has bounced from leases not adding value, to not understanding the spread, to not factoring in corporate overhead, to comparing it to the index, to now execution risk.

Execution risk is the a valid thing to point out and a real risk; however, after vertically integrating most of the construction and manufacturing process, timelines and execution have improved dramatically.

As for EBTIDA, reaching $80-$100 million over the next few years, that is exactly where I see it going. Go look at the Business Aviation Group feasibility study (this only includes a portion of the pipeline).

Add in campuses in the pipeline that are not included in the study as well as campuses/airports that have not been announced yet and I believe you will come to the same conclusion.

Don't forget that existing leases have CPI escalators with a 4% floor and re-lease rates (increase in price from final year of a lease to the first year of a new lease) for the trailing 12 months was +23%. So the existing operating portfolio will continue growing at a decent pace.

[KCM @KCapMngmnt]

Okay, so you are being serious....

They currently have ~1 million square feet constructed.... Their current signed pipeline is an additional 3+ million. This doesn't include any future airports that haven't been signed or announced yet. That first million square feet funds corporate overhead plus some excess (the positive EBITDA guidance you mentioned). They expect their corporate SG&A to peak around $20 million per year on a cash basis which is where they are at right now.

So that spread we talked about is going to be what goes to the massive EBITDA you mentioned. Incremental EBITDA margins on new campuses built will be in the ~80% range going forward.

[KCM @KCapMngmnt]

@marginofdanger I can't tell if you're being serious

[KCM @KCapMngmnt]

@marginofdanger They pay airports $1-$3/sqft for the ground lease. Then they build a hangar on it and rent it out for much higher. In the case of VNY, a tier-1+ airport, rents will probably be in the range of $65-$90/sqft. Maybe more

[KCM @KCapMngmnt]

The ground lease is the ticket in the door. You can't buy airport land in LA at any price. A long-term ground lease is the only way in, and VNY has been full with waitlists for years. You sign a ground lease, build a hangar, and rent it out, collecting a massive spread in the process.

[Brad Thomas @bradthomas]

Parking a $50K car in Manhattan costs $1,000/month. Nobody questions it. 

That's exactly what's happening at airports. Sky Harbour $SKYH is the Manhattan parking garage of private aviation. Except the rent keeps going up and nobody can build a competitor. 

Full C-suite interview now on YouTube: https://t.co/Pl9JYqlWtR

[KCM @KCapMngmnt]

@preston_holland $SKYH The hangar shortage is real

[Brad Thomas @bradthomas]

$SKYH is starting to take flight since my Strong Buy recommendation on @SeekingAlpha (30 days ago)

This has never been about quarterly earnings...it's about owning irreplaceable airport real estate with decades of embedded value creation. I believe the market is only beginning to understand the opportunity.
#HALOInvesting ✈️

[KCM @KCapMngmnt]

Very real possibility of $SKYH getting caught up in the $SKHY frenzy. Get your popcorn ready!

[Pod Risk Manager @sadandlonely_69]

As SK Hynix goes public under $SKHY I’m buying the private jet aircraft hanger company $SKYH on a more rich people + ticker misspelling thesis. I love it when fundies and technicals overlap!

[Pod Risk Manager @sadandlonely_69]

As SK Hynix goes public under $SKHY I’m buying the private jet aircraft hanger company $SKYH on a more rich people + ticker misspelling thesis. I love it when fundies and technicals overlap!

[KCM @KCapMngmnt]

I'm less concerned about this share issuance, but the $20 million in September really didn't make sense to me. They could've funded that deal with cash on hand and a small draw on the credit line that they could've paid off within a year. That was some VERY expensive equity they issued at less that half of the current share price.

[KCM @KCapMngmnt]

I'm less concerned about this share issuance, but the $20 million in September really didn't make sense to me. They could've funded that deal with cash on hand and a small draw on the credit line that they could've paid off within a year. That was some VERY expensive equity they issued at less that half of the current share price.

[KCM @KCapMngmnt]

Thoughts on the recent share issuance? They issued shares at $7.50 to fund the Crown 1 deal and those shares have more than doubled in 8 months. Now they are issuing another $100 million.

They could've easily funded the Crown 1 deal with debt and cash on hand rather than issuing precious equity. Now they're diluting us even more. They could easily access the debt markets at favorable terms and fund these accretive acquisitions. Thoughts?

$MAMA

[Brad Thomas @bradthomas]

Everyone is talking about AI, and I'm buying airport real estate...that's essentially the $SKYH thesis.

You can't build another Manhattan, and you can't build another major airport either.

$SKYH is acquiring long-term control of scarce airport land and turning it into a recurring cash-flow platform for private aviation... that's a moat... that's HALO.

Long: $SKYH