Good afternoon. My name is Regina, and I will be your conference operator today. At this time, I would like to welcome everyone to the Sky Harbour 2024 Q2 Earnings Call and Webinar. All lines have been placed on mute to prevent any background noise. After the speaker's remarks, there will be a question and answer session. If you would like to ask a question during this time, simply submit your question online using the webcast URL posted on our website. I would now like to turn the call over to Francisco Gonzalez, Chief Financial Officer. Please go ahead. Thank you, Regina. Hello, everyone, and welcome to the 2024 Q2 investor conference call and webcast for the Sky Harbour Group Corporation. We have also invited our bond holding investors in our parent subsidiary, Sky Harbour Capital, to join and participate on this call. Before we begin, I've been asked by counsel to note that on today's call, the company will address certain factors that may impact this and next year's earnings. Some of the information that will be discussed today contain forward-looking statements. These statements are based on management assumptions, which may or may not come true, and you should refer to the language on slides 1 and 2 of this presentation, as well as our SEC filings for a description of factors that may cause actual results to differ from our forward-looking statements. All forward-looking statements are made as of today, and we assume no obligation to update any such statements. So now let's get started. The team with us this afternoon, you know from our prior webcast, our CEO and Chairman of the Board, Tal Keinan, our COO, Will Whitesell, our Chief Accounting Officer, Mike Schmidt, our Treasurer, Tim Herr, and Tori Petro, our Accounting Manager. We have a few slides we'll want to review with you before we open it to questions. These were filed with the SEC an hour ago in Form 8-K, along with our Form 10-Q, and will also be available on our website. You may submit written questions during the webcast using the Q4 platform, and we'll address them shortly after prepared remarks. Let's get started. Next slide. This is a summary of the financial results of our wholly owned subsidiary, Sky Harbour Capital, and its operating subsidiaries that form the Obligated Group in the context of the trend of the past 3 years on selected metrics. This basically incorporates the results of our Houston, Miami, and Nashville campuses, along with the CapEx and operating costs of our 3 projects currently under construction in Denver, Phoenix, and Addison, Texas. As you may see, the path of construction activity in Q2 has picked up again, and we expect that trend to continue as we ramp up construction. Revenues moved higher in Q2 from 2 main factors: First, there were a couple of tenant leases that kicked in during the quarter, and second, we also benefited from some tenant renewals of our first lease expirations and some tenant replacements, both at higher rental rates. Operating expenses increased, but I should note that this includes the ground lease payments or accruals as per US GAAP in all six ground leases in the obligated group. Said in other words, we do not capitalize ground lease payments or accruals during construction. Even with that, we have firmly crossed into positive cash flow from operations, as you may see in the lower right-hand quadrant. We expect this trend to continue and accelerate in the first half of next year when Denver, Phoenix, and Dallas, Dallas campuses open and begin to cash flow. Next slide. On a consolidated basis, the Q2 revenues exhibit the step function of the incorporation of our new campus in San Jose International Airport. As previously reported, San Jose was roughly 58% leased during Q2, and with the new tenant leases signed in recent days, we expect another step revenue increase in Q3 as that campus approaches, you know, full occupancy. The operating expenses in Q2 increased mainly from two factors. First, the incorporation of the ground lease payments of San Jose, which are significantly higher than in our typical greenfield projects. Let me explain this a little further. In essence, because of San Jose ground lease came with a large hangar, existing hangar, apron, and parking. The cost of these facilities is basically amortized through the ground lease payments as part of our operating expense. Second factor, similarly as the Obligated Group, we accrue in the consolidated operating cost for ground lease payments at the 12 airport locations that we had signed by Q2, and we will begin to have in Q3 another ground lease that will be accruing in terms of this expense with the addition of Salt Lake City a week ago. That non-cash accrual of ground lease expense amounted to approximately $1.1 million in Q2 and reflected within operating expenses. The SG&A, which is mainly at the parent holding company, reflect the impact of non-cash employee stock-based compensation expenses, which amounted to a similar figure of about $1.1 million during Q2. We reaffirm our prior guidance that we expect Sky Harbour to reach cash flow positive on a consolidated basis in the fall of 2025 as we reach sufficient scale with the new campus openings to cover our holding company expenses. Let us turn to Tal Keinan, our CEO, for an update on site acquisitions. Thanks, Francisco. So what you can see here reflects our announcement last week of the Salt Lake City International ground lease, in addition to some expansion that we've been able to achieve on existing ground leases. We've begun presenting it in this fashion over the last couple of quarters because this is really how we look at it, is what is the total revenue capture of land that we have under ground lease at Sky Harbour today? So as of August 2024, you could see it's in the kind of a $125 million-$130 million range. What that number is, to remind people, is the total square footage of buildable hangar on each of these campuses, times the Sky Harbour equivalent rent, which is our proxy for revenue on each of these campuses. That's what that capture number equals. Just to remind people, and I think we have some numbers that we'll share later, on the campuses that we're operating at this point, we are significantly exceeding our Sky Harbour equivalent rents. So we do think that's a conservative number to use as an estimate for what revenue capture potential is on these campuses. Let me hand it over to Will to talk about development. Thanks, Tal. This slide really represents the next phase of development and construction for Sky Harbour on an accelerated growth plan, starting with the three projects that are currently in progress, right? They are on track or ahead of schedule to be completed in Q1 of 2025, per our announcement in our Q1 statements. Below, second half of the page, below in the bar graph, right, really represents our growth plan over the next two years, focusing on 2025 and 2026. 2025, you have a combination of eight projects starting in construction, with three completing for a total of 11 projects. To bridge into 2026 of 15 projects starts, and a completion of seven projects for a total of 22. So over the next two years, between 2025 and 2026, we are ballparking 33 projects between starts and finishes, which is definitely an accelerated growth plan. Now, turn it back to next slide. Thank you, Will. We continue to enjoy strong liquidity with $150 million in cash and U.S. Treasury bills. We continue our cash management strategy of rolling our cash in 1- to 3-month U.S. Treasury bills and notes, pending their use in construction. During the past quarter, we continued to earn more in our cash than the interest cost of our bonds. As many of you know, our debt is permanent fixed-rate bonds, with the first maturity, principal maturity coming up in 8 years, and capitalized interest, through July, the July payment, of next year. The expected cash flows from operations at the Obligated Group in 2025 we continue to expect to amply cover the net debt service of $5.6 million due next year, without having to touch the ramp-up reserve we put in place, just in case, back at the time of the issuance of bonds. That ramp-up reserve will get released once the construction is completed at the Obligated Group. Next slide. Oh, yes, one more comment on our bonds. Our longest 30-year maturity due in 2054 traded a few weeks ago at 5.35, and just yesterday, our 12-year maturity bond traded yesterday at 5% flat. These levels are a testament to the great quality and investor demand for our bonds. We reiterate our expectation that future debt service coverage ratios will exceed those forecasted at the time of the bond issuance three years ago, and our solemn commitment to protect such coverage. We continue on a path to seek investment-grade ratings next year as campuses ramp up with cash flow generation. We add accretive fields to the portfolio in a de-risked way, and we use interim financings in order to protect the current bondholders of the Obligated Group. Next slide, please. Yes, we have shown this slide before, but wanted to reiterate that we continue to approach capital formation deliberately and opportunistically to act in the best interest of our company, its bondholders and shareholders. We have continued to receive funding proposals, both equity and debt, to meet our growth capital needs, but we're disciplined in our consideration of these. On the debt front, we conducted a limited market outreach and have received proposals from 5 major U.S. financial institutions for a $150 million bond or loan facility at attractive interest rates. We plan to select 1 or 2 banks to lead such effort after Labor Day and expect to complete the financing, subject to market conditions, early next year. Over 2 days, during the early part of this past quarter, we test-drove our ATM program and sold 7,407 shares over 2 days at an average price of $12.42, without impacting the trading price of our stock. We will keep this as a tool, but don't plan to use it unless our stock is significantly higher than current levels. As in the past, our conservative balance sheet and liquidity allow us to be deliberate. We're fully funded for the first 10 airports and can reach cash flow breakeven without any additional capital raise. Of course, if we can accelerate growth with the right new funding, we'll take advantage of opportunities as they arise. Back to Tal for a brief review of our achievements during Q2 and areas of focus for the next 12 months. Thanks, Francisco. So as people know, I like to think of our company in these four pillars, site acquisition being the first. As we discussed, we're excited about getting underway at Salt Lake City, and that expansion on existing fields is something that we're going to continue to be working on. All the fields that we're on, by definition, are attractive to us. If we can get more square footage on those fields, that is equivalent to winning new fields. On the development side, this is where I think we're gonna see a lot of the action over the next couple of quarters. We're really in a phase shift in this company, where we were working in serial, we've got to work in parallel now. You know, it's a really kind of massive ramp-up on the development side. And you I think you'll see in the press release, the introduction of a few people, key people who have joined the team in the last quarter or so to help us meet that challenge. So we've got three projects set for delivery by the Q1 of 2025. That's Denver, Phoenix, and Dallas, but we've got 10 additional projects in development now. That number is only gonna grow, right? We As challenging as it is, there is no intention to stop accelerating on-site acquisition. That's what this company is about, fundamentally. We're going to have the resources in place to process it as we grow. So right now we're at 10, but our the intention is to actually increase that quite significantly over the next, over the next few quarters. As part of that effort, you know, we are institutionalizing. This is becoming a much more process-driven construction effort, a lot, a lot less reinvention of the wheel as we go. We have finally completed the design of the Sky Harbour 37 prototype. We think this is a breakthrough hangar. We think it's the best hangar in business aviation by far. I don't think anything comes even close to it in terms of the capacity to, to hold aircraft, but also the utility of the hangar. I mean, it's. You know, again, we, we've, we've seen a lot of hangar designs over, over the years. This is, you know, by far the most thoughtful we've been able to come up with, and we don't think anything comes close to touching it. We have RapidB uilt, our pre-engineered available building manufacturer configured to pump exactly this model of hangar out, and we expect to achieve very significant economies of scale as we do that. On the leasing side, you know, we're under NDA with many of our tenants, and we're seeing the questions come in already, and there's some questions about privacy. That's definitely a big piece of it. So we're never going to disclose our tenants' identities. They're, of course, free to do it themselves. We don't, we don't do that. But what we can say is the premier flight departments in the United States are residents of Sky Harbour. The best flight departments in the country are residents of us. I think we have perhaps reached a certain threshold in terms of brand awareness within our specific industry, where the most sophisticated decision-makers in business aviation understand the utility of the home basing solution versus, for example, living at an FBO. The second thing I think it's worth pointing out is the actual revenues from airports, where we're exceeding our projections by about 32%-33%. I'll say that's in the initial lease-up of all of these properties. What we're also beginning to see, and we discussed it a little bit in the press release, is that we're seeing a significant step up in revenue when we renew a lease or replace an existing resident. Again, we haven't had that many of those. It's little more than a handful at this point, but the numbers have been pretty consistent. We're marking up at a little over 20%, right? So if you're getting $1 in rent, when that term ends and you re-lease the hangar to a new tenant or to the same tenant, you're getting $1.20. And I think that is the first, and we'll put out numbers at some point when we can—when we have enough to, you know, make it statistically valid, but we can already see it. We see this as probably the first empirical demonstration of our thesis on inflation, on airports, right? There's a finite number of airports. You're not gonna build new airports in the United States. They're already space-constrained. We think we're in one of the most inflationary segments of the U.S. economy, and I think we're beginning to see that in our renewals. Operations, so San Jose was a quick effort to get it staffed, equipped, and up and running. We did that very quickly. We're accommodating, you know, many tenants right now. We've got a, you know, very robust operation there, and we've got three fields that we've got to staff, equip, and get standard operating procedures for in the next two quarters. So we're already well underway on that. We'll talk about some of the new members of the team on the operations side, but just as I got, I think I used this analogy on the last call. You know, this is an exercise. Like any growing company, it's an exercise in shifting bottlenecks. If site acquisition was the primary bottleneck for a very long time, you know, today, we think it's primarily in development and construction. Operations is next, and, you know, we're looking 24-36 months ahead in terms of staffing and putting processes in place to accommodate that growth. The last thing I'll say on operations is that this has been a quarter where we've spent a lot of time and gleaned a lot of insights on what makes our service special. Why is it that we're commanding such a premium versus FBOs on our rents, and why do we have waiting lists on all of our campuses, right? We're at a position now where we're turning people away. which is, you know, where we had hoped to be. A lot of that has to do with the fact that when you don't have a transient business, there are all sorts of service attributes that you can create and that we think really add tangible value for our residents. I won't get into them now, but if there are questions on it, we're happy to talk about it. Looking ahead, so kind of our radar, at least for purposes of this call, is pushed out about 12 months. On the site acquisition side, the metric that we're targeting is Revenue Capture, right? Which is, as I discussed earlier, that's rentable square feet times Sky Harbour equivalent rent, which focuses you by necessity on specific locations in the country. We are looking to pull down the best airports in the country right now. I I think we have a very good sense of who they are, and we're well underway on a lot of those airports, so expect announcements in the near future. Salt Lake City is airport number 14 for us. It also satisfies our guidance of 4 new ground leases for 2024. Well, we did that in July. So I, you know, we, we kind of sat down and looked at that together with the pipeline, you know, where we see, you know, airports that are in process, and decided that we're going to update our guidance. Right now, we up until now, we've been on course for 6 additional airports, right, up to airport number 20, by the end of 2025. We're going to raise that now to 8 airports. So 22 airports by the end of 2025 is our new guidance. Moving on to development. Right now, it's about standardization and really maximizing the benefits of economies of scale, right? Right now, we're, we're the largest hangar developer in the country, perhaps in the world. There are some real opportunities that come with that. I don't think we're quite at the place where we've maximized the efficiencies that can be gained from that, but that's the objective right now. We'll be looking for opportunities to introduce Steve Martinez and Dave Sherman. They're both mentioned in the press release as key leaders on the development and construction team that are going to push that effort of standardization forward. On the leasing side, so that brand awareness is a key thing for us. You know, we don't have a marketing department. We haven't really engaged in active marketing. We've just done what we do. And I think word of mouth has probably been our strongest competitor. Our aircraft owners take off before anybody. From arrival to the airport to wheels up, you will have the shortest time at Sky Harbour. And there are a lot of reasons behind that, but if you're flying a $50-$70 million jet, that time is quite critical. I think for many people, you can look at your airplane as a time machine. It really is. It is that. Why wouldn't you house it in a way that you can maximize its utility? And I think that's been one of the key attributes. Again, I see in the questions that are coming in, questions about privacy, security. I mean, these are all attributes that we can deliver in a way that nobody else can. But what we've been focusing on, up until now is that time to wheels up, and I think we're that, that's showing, and, again, I think it's part of the appeal of Sky Harbour to new residents. There's also a lot of unmet need on the airport sponsor side, in that we are ticking a box that I think other types of developers or tenants on airports are not ticking. And again, we haven't really marketed this in any, you know, deliberate or proactive way. But I think, you know, awareness of Sky Harbour in the airport community is, you know, exactly where we would hope it would be. And then lastly, on operations, you know, for a while, and things are growing fast. It went from 3 campuses to 4 campuses, and it's about to be 7 campuses operating simultaneously. The focus is, you know, 100% on the Sky Harbour resident, right? If we maybe thought 3 or 4 years ago that we're a real estate developer, yeah, we're also a real estate developer, but we're an operator, and it's very important that we don't lose sight of that. We're delivering value to Sky Harbour residents that we don't think anybody else can deliver, and we keep coming up with better ways to do that and to do it at scale. With that, we don't have him on the call yet. He will be on the next earnings call. Really excited to announce Marty Kretchman as our Senior Vice President of Airports. Marty spent most of his career at Signature. Just a fantastic addition to the team, and his, you know, his focus is specifically on airports and with and partnerships, with FBOs, with other people in the aviation community. And then finally, something that we've been, I think has kind of been a peripheral activity for us, which is additional revenue streams, where up until now, you know, the vast majority of our focus has been on putting more dots on the map. We're not taking our foot off the gas at all on that. But now that we have Marty on board, we are looking to start developing those additional revenue streams through services that we're going to provide on the campuses. With that, I think we can go to questions. Thank you, Tal. This concludes our prepared remarks. We now look forward to your questions. Operator, please go ahead with the queue. At this time, I'd like to remind everyone, in order to ask a question, please submit it online using the webcast URL. We'll pause for just a moment to compile the Q&A roster. Our first question is from Philip Ristow. Great quarter! What are your thoughts about broadening the float to mitigate against future potential selling from Boston Omaha and Altai? And we're not able to hear a response. Speakers, are you on the line? I apologize, but there is a slight delay in today's meeting. Please hold and the line will resume momentarily. Please do not disconnect. Thank you so much for your patience. We will now resume the meeting, and our first question is from Philip Ristow. Great quarter. What are your thoughts about broadening the float to mitigate against future potential selling from Boston Omaha and Altai? Hey, thank you, Phil, for participating and your question. Yes, you know, we are conscious of a limited float of our stock and our plans to address that are driven by the fact that over time, you know, as we do we hit the right milestones in terms of our progress, the right time will come to address that through you know, organized equity offerings that will increase the float of our trading. We don't expect we will do that until quite some time, definitely not within the next 12 months. In the meantime, though, as some of the investors who have participated in our equity stack in the past trade our stock, obviously, float will increase. Now, let me just comment, you know, we don't really want to comment on what some of our shareholders do. They actually were not privy to what some of our shareholders do in terms of their stock trading. In the case of Altai, though, we will note that Altai led the PIPE that we did last November. They did it through an SPV, a special purpose vehicle, and I think the sale that was reported in the marketplace was just the breaking up of that SPV and the allocation of the shares to all the participating PIPE investors. So that was not truly a sale, it was just a distribution to the ultimate investors. Some of them who I see participate on this call and who have expressed interest to continue investing in Sky Harbour. So we welcome that. In terms of Boston Omaha, you know, we did see a small sale by them. You know, we in discussion with them, and they have reiterated to us their stature as long-term investors and holders of Sky Harbour. So any further questions on their, you know, day-to-day activities with our shares should be directed to them. But again, they have reiterated to us their view and long-term interests of being a shareholder of the company. Next question. Our next question is from John Blais. Is the SJC lease profitable today, given the high rent? Is it profitable at 100% occupancy? Hey, John, it's Tal. Thank you for the question. Yeah, it is profitable today. You know, we don't really think in terms of 100% occupancy. There is no specific cap to the revenue potential of an airport. Remember, we're also taking fuel margin today with our residents. We have all sorts of. I think we discussed on the last earnings call semi-private hangar arrangements, where we achieve significantly greater than 100% occupancy. So yes, San Jose is significantly profitable already today, and there is still upside potential at that airport. The last thing I'll say on that is, you know, again, we're starting to quantify this 20% markup or premium on a renewed lease or replaced lease, that's one of the places where we see it. It's not, you know, we're staggering our lease terms, so it's not like everybody's on a 5-, 7-, 10-year lease. We have people now on 1- and 2-year leases as well. What we're finding is when those come to term, we have a significant opportunity to, you know, to raise revenue from that airport. Our next question is from Alan Radlo. If Signature and Atlantic and other large FBOs compete against Sky Harbour by offering tenants a hangar price combined with a fuel discount, how does Sky Harbour plan to compete with just a hangar and having to negotiate with a major FBO for a fuel discount? Airport commissions are not handing out fuel farms. Offering hangars without owned fueling places Sky Harbour at a disadvantage, especially if Signature offers their tenants a discounted price at every Signature location. Question, Alan. Thanks for the question, Alan. It's Tal again. A couple things. First, we do offer fuel. So in that sense, what distinguishes between us and an FBO primarily is that we don't, we don't have transient customers, we're, we're only base tenants, but we do provide them with fuel. And you're right to assume that total basing costs should be the metric that guides at least your, your price analysis, your cost analysis of being at an airport. You know, the two biggest components of which are rent and fuel. But we're both us and the FBOs are in that game. There's not a lever that we have that they don't have and vice versa. What I will say, though, is the FBO business is fundamentally a fuel business, and it's about transient customers. Yeah, there are base tenants at an FBO, and there are base tenants who should be at an FBO. We're not the right fit for every tenant. We are the premier offering of business aviation, full stop. We are the front row and kind of floor seats at the NBA game. There is only one front row, and it's us. So I think the market shakes out kind of naturally between us and the FBO industry. They've got their focus, they've got ours. We do compete at the margins, but it's not one-for-one competition with the FBOs. And I think you can recognize that or see that, it's demonstrated quite well in our multiple joint ventures and cooperations with the FBOs, right? We do work well, you know, quite well with the FBOs, specifically with Signature. So I think there's some natural synergies to be found there, as well. But again, the offering is fundamentally different, between Sky Harbour home basing and an FBO offering. Our next question is from John Blais. With your goal of IG and DSCR targets beginning in 4Q, how would raising an additional $150 million be possible? Thank you, John, for your question. It's a very nuanced question, but I'm glad you asked this. You know, we are very protective of our bondholder investors that participated in the first issuance in 2021. It is a program, meaning the Obligated Group is a program. There are a couple of other programs out there by two or three other issuers, mostly in the cargo space. We intend over time to make it a program. But to be able to accelerate the investment-grade ratings, achieving investment-grade ratings for the existing senior bondholders, our goal and strategy is to do the next issuance outside and apart from the senior bonds. And that way, protect the current bondholders from calling the credit dilution of adding more construction projects to the portfolio. And only in a few years from now, when the new projects that are financed with our next debt offering reach stabilization, then that will be the appropriate time to collapse everything into the into the growing program and sustain those investment-grade ratings and coverage ratios that we seek. But again, very nuanced point, but very important point, especially for our bondholders who are participating also on this call. Next question. Our next question is from Matthew Howlett. With the bond deal you're contemplating, how should we be thinking about leverage going forward? Prior framework suggested a 70/30 debt-to-equity split. Should we be thinking about less equity capital needs going forward and consequentially, higher ROEs longer term? Yes, Matt, thank you for your question and for your following of Sky Harbour. I believe 70/30 is still the right way of thinking about our leverage target. And especially, you know, if we do what we mentioned in terms of having in the next set of debt to be outside the existing Obligated Group. But I think over time, back to my earlier comment about this being a program, I will say that the third issuance, when that comes, you know, a couple of years down the road, is likely to be higher than 70%. You know, one of the critical things of this obligated group program, and as it achieves its more maturity, that it will provide adequate coverage to existing bondholders and allow us to ever increase leverage. To give you an example, some of the programs that are in existence out there that are BBB rated, one comes to my mind that did their last issuance at 95% leverage. Why? Because over time, as all these properties that we're constructing cash flow, there's an inherent credit strength these borrowing programs that will allow you to then incrementally do financings at ever-increasing leverages, and thus have the impact on our ROEs. You know, anybody keeping the relationship between return on assets, our leverage, and return on equity will understand how important our borrowing program is to achieve the 30%+ ROEs on the unit economics that we continue to pursue. Next question. Our next question comes from Connor Kaye. How do you see the life cycle of lease signing through stabilized revenue as you increase the number of campuses? For example, do you expect the permitting and construction timeline to be quicker for campus number 15 versus campus number 8? Yeah, it's Tal. Connor, great, great question. Thanks for that. Let me start with this. All of our projections, everything you see, does not take what I'm about to say into account, 'cause we, we don't know exactly how effective it's gonna be. However, that is absolutely the objective, is to constantly work on, A, getting our construction costs down, and B, getting the timeframe that you identified here down as much as possible. Some of the steps that we're taking here, you know, first of all, we've been looking at site acquisition and development as two discrete activities with a handoff. That's not how we look at it anymore. As we progress, the entitlements process starts significantly before we actually sign the ground lease. That's one thing. Again, we haven't seen the fruits of that quite yet. We'll see how effective that is over time. We have key roles that didn't exist before in Sky Harbour. For example, pre-construction, pre-development roles, we're working our head in them. You know, perhaps most importantly, there's no rocket science to what we do here. It's a very simple business, but there's 1,000 little tricks of the trade that, as far as I've seen, the only way you can learn them is through experience. So each time we go through another one of these entitlement processes, we get a little bit sharper, a little bit better, of what we're doing. And then the last thing I'll say on that is we think one of the benefits of the prototype hangar design is it gives the approval process a real boost in that if you've got exactly the same design approved by, you know, 15 different fire departments across the country, the 16th one has, I think, an easier time digesting exactly what it is. We also get much better at communicating exactly what the features of our hangars are. So, you know, kind of put all of those together, and maybe a few other efforts that we have underway. Again, none of that is really accounted for in the projections that we've put out, but it's certainly the ambition. So thanks for the question. It's exactly definitely a focus of ours today. Our next question comes from Peyton Sewell. What is the steady state capacity for a number of phases in development at once? Yeah. It's Tal again. Thanks for that. You know, I don't know that there is a steady state capacity. We... You know, like, like I said before, the intention is never, never to slow down on-site acquisition. We never wanna let the bottleneck, whatever the bottleneck is at the moment, dictate the pace of our growth. We're gonna open the bottlenecks. So, you know, if right now we're developing 10 airports in parallel, you know, can we develop 20 airports in parallel today? No, I don't think we can. When that becomes the challenge, we will be able to develop 20 airports in parallel. That's exactly, you know, that's exactly the analogy of moving bottlenecks that I've been using on all these quarterly calls. Our next question comes from Francisco Bruguera. Two questions: One, you mentioned development as your current bottleneck as a company. In general, do the ground leases you execute have a deadline by which you must build out the improvements? And two, are you now targeting shorter leases due to the recent success in lease renewals? How do you think about the trade-off between short lease upside versus revenue visibility? Perhaps if you could put in context of leasing strategy for upcoming properties such as APA and DVT. Thank you. All right, Francisco, these very, very insightful questions, and I know our own Francisco is gonna wanna take a crack at the second one as well. But I'll just say the following. In terms of deadlines, typically, no. Right? The performance requirements on ground leases at airports tend to be relatively lax. That doesn't mean we ever wanna slow down, but you're right, there's not... If I understand your question right, there's not really a gun to our heads once we've signed a ground lease. There's plenty of time to develop. Again, it's in our interest and all of our shareholders' interest that we develop as quickly as possible, but that pressure is not coming from the airport. On the second piece, I mean, it's a yeah, and I know there are a lot of bondholders on the call, and I think you're highlighting a you know, very important tension, perhaps between our bondholders and our stockholders. But I think that tension is pretty easily resolved here in that we stagger the lease terms of our tenants, right? We never wanna be in a situation where we have, you know, a third of a campus, you know, coming to maturity in a single year. We never wanna be in that situation. I also kind of wanna remind everybody, when we open a campus, we're putting more hangar square footage onto a market at a moment than has ever been done before, in most cases, in most markets. You know, FBOs don't open 200,000 sq ft of hangar in one shot, which gives us a significant disadvantage on just pricing leverage, right? We've got a lot of product that comes onto the market in one time. And I think there are ways for us to address that over time, but what it means is the first round of leasing is not really where you discover the market price of Sky Harbour home basing. It's the second round, right? So I think airport inflation is one of the factors that's led to that 20% markup. Another factor is exactly that, is that we're not trying to lease 150 or 200,000 sq ft on the second round. You do want—we believe you do want, in, you know, a certain number of cases on every campus, to reach that second round earlier in the process. You don't want all your leases to be ten years long. So we—well, you know, we do appreciate the revenue visibility of those ten-year leases with high credit tenants. That's great. It doesn't have to be the entire campus. I also, you know, want to point out that the revenue performance on these campuses has been so much better than we projected. You know, Francisco was alluding to the coverage ratios on our bonds that we're achieving those coverage ratios way before we're 100% leased at these campuses, which gives you a little bit of latitude to sort of, you know, so to speak, have your cake and eat it too. Meaning, address the needs of our bondholders and our equity holders at the same time. So fundamentally, the short answer to your question is staggering, but Francisco Gonzalez might have something like that. Is that I think that was a complete answer. Well, that is the following. You know, I think we will, we'll when the time comes in next year and we're facing the rating agencies, we're gonna have to show them and prove to them that what's better for both bondholders. We definitely know it's better for equity holders, but also for bondholders, what's better to have, you know, a very few tenants with a very long lease, or to have a diversification of tenants, with shorter leases that we can show and prove to them that every time they get renewed and re-leased, the rate of growth, as our recent experience have shown, and by the way, this is including our recent press release that we just filed, the recent renewals and replacements, it basically allowed us to increase our rents by 32%. Let me say that again, 32% on those hangars that were renewed or re-leased or replaced, and that we just disclosed, an hour ago. Over time, to Tal's earlier point, I think the range will determine that if we have the right diversification on tenants, we have right tenants in terms of a tenant representation, that we will with higher coverage offset the fact that we have a shorter average life of tenant leases than it will be the case for other comparable bonding programs out there that may have, you know, 20-, 30-year tenant leases, but they have the high concentration of tenants. Anyway, moving to the next question. Our next question comes from John Blais. Can you please explain the rationale for the New York and Connecticut area airports? Yeah. So, you know, when we talked about revenue capture, meaning square footage times revenue per square foot, location is, you know, the key driver. I mean, we've kind of- let's just dial it back for a minute to just unit economics. The metric that we target for unit economics is yield on cost, as any real estate developer should. What I would argue is that all of the action in yield on cost is in the numerator, okay? The denominator being development cost and OpEx. So development cost varies within a pretty finite range across the country, right? It's not like, you know, costs in California are triple, like, the costs in, you know, in Florida or something like that. It varies within a finite range. OpEx per campus varies within an even more finite range, I would argue. So the denominator is actually, you know, relatively static. The numerator, revenue per square foot, is really where the action occurs, and that's about location. We are in the real estate business, you know, at, at the end of the day. The best metro area in the country for Sky Harbour is New York. It's the best in the country. All right? And then I'm not speaking. I'm, I'm speaking specifically for Sky Harbour for home basing, right? There are places that are great FBO markets. I think from on a square foot level, Aspen Pitkin is probably a fantastic market for an FBO. It wouldn't be for Sky Harbour. New York, and again, we're, we're very metro center focused. New York is the best metro center in the country. There is a 2 million sq ft plus deficit of hangars serving the New York area, right? And again, remember, most Manhattan-owned aircraft that operate in and out of Teterboro are not based at Teterboro. There's no room, there's no hangar capacity at Teterboro. They're based at outlying airports, and they've repositioned into the country. Those outlying airports, the repositioning airports, have higher rents per square foot than most primary airports in most metro centers in the country. So, yeah, frankly, I'd say a lot of our focus, you know, we're not too specific about airports, but a lot of our focus naturally is gonna be in New York. Our next question comes from Matthew Howlett. Thanks for the update on the potential for ancillary revenue, fuel airport services in the model. Can you give us a sense of what the opportunity is for Sky Harbour? How much added revenue this could contribute per airport? Yeah, so I think there are a few ways to look at this. First, we're definitely not in a position to give any numbers yet on this. I don't know if you have to look at it on a per airport basis. You can think, for example, of partnerships with FBO companies for all sorts of on-the-road services, where those can be revenue drivers for Sky Harbour as well. You don't have to think of that on a per airport basis. Yeah, I can tell you, for example, one revenue producing service that we already have in place hasn't actually started kicking off revenues yet, but we think it will in the coming quarters. It's something simple and small; it's aircraft detailing, right? One of the things that we, we noticed is, you know, aircraft detailing is kind of a fragmented industry. It's opaque. There's a lot of exposure as an aircraft owner that you can take by operating or working with a detailer, that you don't know, right? There's all sorts of sensitive equipment on airplanes, antennas that could be broken, things like that. And a lot of our residents look to us sort of as the arbiter of what's quality in aviation. So we formed a partnership with one of the national aircraft detailing companies after conducting our own very extensive due diligence. And, like, we live and breathe business aviation. We know, we know the answers to these questions, I think, as well as anybody does. We formed a partnership with a company called Prime Appearance that has our endorsement on all of our campuses. They know how to operate from every aspect, from where the utilities run on our campuses to security protocols, you know, getting in and out of our campuses. So it becomes a very seamless arrangement to work with this company for your aircraft detailing. And, you know, we're talking about, you know, many tens of thousands of dollars of revenue per aircraft on a detailing basis. That's one of many, many examples that we—again, we haven't really started working on most of these yet. As Marty kind of gets his footing in the company, that is one of his mandates to begin systematically taking down all of these drivers. At some point, we'll be able to, I think, answer your question in a more kind of quantitative manner, what do we think these different revenue streams add up to in relation to rent? But we're not in a position to say that yet. Our next question comes from Connor Kaye. Do you see the potential for signing more leases similar to SJC, where there is an existing hangar, and you can begin earning revenue on the property within a few months? If so, do you have any of these situations in your current pipeline? Look, I would look at that, Connor, thanks. I'd look at that more as an opportunistic, you know, scenario. It's not, it's not a strategy. You know, fundamentally, there's an arbitrage in our business. It's one of several arbitrages that we've been exploiting in our business, which is it's much better to build than to buy. It's much better to build than to buy, right? And there are all sorts of initiatives out there to either, you know, roll up FBOs or, you know, portfolios of hangars. You know, and I think some of these might work, you know, nicely, I don't know. But fundamentally, the economies we've been able to achieve already before we get to great scale, I think this becomes even more compelling at scale, really suggests that the plain vanilla Sky Harbour model is the best way to grow, and that's where our strategic resources are arrayed, which is get the land and build it ourselves. There are situations, there are airports where, you know, like in many cases, this is a strategic decision where you're not really that interested in the short term, right? You might buy some hangar capacity at an airport, or lease some hangar capacity as your first kind of beachhead at an airport, where the intention is to really grow there. Fundamentally, again, and there's opportunistic situations that we don't want to rule these things out, but strategically, what we're actually proactively trying to do is just our plain vanilla model. Get the land and build Sky Harbour hangars on that land. Let me just add to that financially, in terms of target return on equity, you know, as I mentioned earlier, we're continuing to target this, our core business of 30%+ ROEs. When you're looking at a situation, especially a situation that usually comes in terms of an auction or so on, because it's a third party of existing properties, you're likely gonna be driven down to returns on equity in the teens. And obviously, that's not something that we wanna deploy our capital of our investor base to do. Now, we have been exploring various alternatives of how do we bring third-party capital to join us so that we are able to achieve through asset management fees, promotes, and so on, get our 30% return on equity, while at the same time, though, leveraging someone else's capital that may have a lower threshold than ours, given that we bring the expertise of running these type of campuses to bear. So, so as Tal mentioned, we'll be opportunistic. We have been looking at a variety of things that, some of them that we have passed on, because again, we're gonna be very deliberate in terms of not overpaying or overbidding for certain situations out there of existing assets. Next question. Our next question comes from John Blais. Can you outline your ROI calculation on SLC with $40 million of minimum capital improvements on 8.4 acres of total property? Yeah, I don't know if we share that level of site-specific detail. I think what we can say is that a couple of points here. First, we believe that our next set of airports, the ones that we have been signing in the past few, you know, six months and currently, are on average have a-- we're underwriting to targets that are higher than what we underwrote, you know, three years ago for the current projects that we have in operation and were in construction. So that's one key element to consider. We love Salt Lake City as an airport. It meets the criteria that we have that we have outlined publicly in terms of thresholds for return on assets and returns on equity. So we're looking forward. If we could get more land in Salt Lake City, we've gotten, but I think, you know, we got as much as I think the airport will give for business aviation, a hangar, and I think that we have been able to secure that. One thing I will also note is we're getting better and better at getting the terms that we care about in when we're securing ground leases. You know, our first ground lease was 30 years. I'm sure people are noticing that our recent ground leases are really 50 plus 10, 60 years. And there are many other terms that we've been able to secure that are important to us and that are important to our equity investors in terms of value accretion of this enterprise. Next question. Our final question comes from Alan Jackson. When pursuing a ground lease, what are the primary bottlenecks or pushbacks that occur from airport sponsors towards Sky Harbour? Do surrounding residents in a metro area push back towards municipalities establishing a Sky Harbour campus? Yeah. Thanks, Alan. It's Tal. I think the term in the industry, if you've seen one airport, you've seen one airport. We were frustrated by our inability to find kind of one, kind of one-size-fits-all model, for this is how you acquire land at airports and just apply it across the country. I think that's actually become a real asset for us now, is that it's very hard to do this. It's very hard. I mean, I can't think of any two airport situations that were alike, that we've experienced. And as you know, we're in process at many, many dozens of airports around the country as we speak. I don't know that any two situations are similar. The reason I think that's become a plus is, you know, it's become increasingly... Our feeling at the time was, you know, there are certain barriers to entry. There's certainly good barriers to entry on airports or good moats around us at airports where we're already operating, because we tend to take the last readily developable land at those airports. But there wasn't—we didn't feel there was such a moat around the business model itself. Increasingly, it is very hard to get land at airports, you know, full stop. And however much, you know, money you spend on trying to figure it out, there is definitely a learning curve. And, you know, we're certainly not done. We're on that learning curve somewhere, but, you know, we're, we are light years ahead of where we were three or four years ago in terms of our acumen. How do we actually get land at airports? We're also in process at the airports that we want to be at, right? We're, you know, many, many airports around the country. So I think it's a great question. It's something that we, you know, I think thought about for a long time. I, you know, there was a time where I wished that notion of primary bottlenecks or pushbacks was a question we could answer kind of in one sentence. Today, I'm happy that we can't. And it's just a very complicated world, but we've got a great team. You know, we've trained a team. We learned together, you know, exactly how to do this. And, you know, hopefully, we continue getting better at it. In terms of the surrounding residents and metro areas, I would say kind of the same thing, that you know, it's sort of everywhere. But what we've done is, you know, everything from improving the environmental footprint of an airport, that is something that we do. If you think about, you know, airports where there's not enough hangars and there's a lot of repositioning, take an airport like Chicago Executive Airport, where, you know, again, like a Teterboro, you have more airplanes operating in and out of Chicago Executive than you than you can actually house on that airport. So you have airplanes that live in, you know, Waukegan or elsewhere, you know, or around the Chicago area, repositioning. Understand that a repositioning airport, if you want to fly from Chicago to Miami and your airplane is not based in Chicago Executive, Chicago Executive has to accommodate four operations, right? They've got an empty leg landing at your airport. You've got a full leg taking off from Miami, a full leg landing from Miami, and then an empty leg repositioning back to Waukegan or wherever your airplane is, is based. By adding hangar capacity at that airport, we're cutting, we're cutting that in half, right? The number of operations. So from an environmental perspective, a noise perspective, all of that, that's great. Again, I won't get into every example, but think of, you know, environmental impacts of things like de-icing aircraft, right? Our aircraft live in heated hangars. They don't need de-icing, right? They only come out when they're ready to fly. They're not like an FBO, where the airplanes live on the ramp outdoors. They're getting snowed on, frosted on. You can't take off in an aircraft that's frosted. By the way, that's a many thousand dollar operation to de-ice an airplane, and environmentally, it's not, you know, not a great situation. That's something that we cut as well. The jobs that we create, the tax revenues that we create for airport sponsors, I'd say fundamentally, we are a plus for an airport in a way that no other airport tenant is. We've got a very specific set of, you know, values that we bring to, you know, to an airport and to a community. Again, you know, I'm happy to say today, there is no one value that gets prioritized across the board, everywhere, and kind of create that virtuous triangle of, you know, the airport sponsor, the business aviation operator, and us. This concludes today's meeting. You may now disconnect.