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Pages 10-15

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From page 10...
... 10 2.1 Introduction Market value and market rent are often misinterpreted and misunderstood, not just in the aviation industry but in property management and in general real estate practices. In the aviation industry, market value and market rent are often treated as interchangeable terms, which can be misleading.
From page 11...
... Understanding Market Value and Rent 11 • What is the appropriate airport sponsor rate of returns on capital investment for determining rent? • Do additional attributes (such as ingress/egress aprons)
From page 12...
... 12 Estimating Market Value and Establishing Market Rent at Small Airports Implicit in each definition is that these value considerations exist concurrently. For example, if an airport sponsor enters into a 30-year lease agreement, value is created for both parties, as follows: • Leased Fee Estate -- the airport sponsor has the right to receive rent for the term specified in the lease agreement (e.g., 30 years)
From page 13...
... Understanding Market Value and Rent 13 2.4 Key FAA Guidance and Compliance Considerations A federally obligated airport sponsor must acknowledge certain FAA guidance and compliance considerations and implement them accordingly. While current and prospective lessees or tenants may not be obligated to comply with all considerations, the airport sponsor should ensure each party understands these elements.
From page 14...
... 14 Estimating Market Value and Establishing Market Rent at Small Airports sponsor are acting knowledgeably. Through the survey conducted specifically for this report, a negotiation (with or without the support of an objective analysis)
From page 15...
... Understanding Market Value and Rent 15 use of land and/or improvements owned and operated by the airport sponsor. However, consistent with FAA guidance, civil aviation must realize reasonable tangible or intangible benefits from the not-for-profit entity's use of airport land and improvements at a reduced rate.

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