MIAMI — An investment group is targeting Colorado Springs, Colorado, as the next hidden gem to support growing demand for air cargo transportation in locations that offer cheaper operating costs and less congestion than major hub airports.
Burrell Aviation announced Tuesday plans to build multiple facilities for air cargo handling, cold storage, warehousing/distribution, integrated logistics, and aircraft maintenance and testing on a 65-acre property at Colorado Springs Airport.
The company said it is willing to invest up to $110 million in modern infrastructure and to work with state and local development groups to generate interest in Colorado Springs Airport.
Based in Aspen, Colorado, Burrell Group formed an equity arm in 2019 to invest in new aviation infrastructure, primarily at regional airports, to meet increasing demand for air freight. Boeing’s 20-year outlook envisages a doubling of air freight volume by 2041. Airports are captive markets with limited land, and businesses that need quick and regular access to air travel are increasingly willing to pay for convenience.
The company differs from traditional airport real estate developers who typically respond to tenders from airport authorities. Instead of waiting for a project to pop up, Burrell’s strategy is to build the project. It aggressively seeks opportunities, convincing airports that the legacy procurement process is too slow for shippers with immediate supply chain needs. Typically, it enters into a leasehold agreement with the airport for a term of 30 years or more, and then relies on a consortium of partners to build, market, lease and operate the facilities.
“Traditional developers are reacting to the interest that has been aroused. We’re a lot further upstream,” CEO John Carver told FreightWaves at the International Air Cargo Association show here last week. “We select the airports and then work with the airports to determine the highest and best use. And then we have the opportunity to make the investment. What we have done is secure the only buildable land available at the airports where we have positions. So if anyone has business in Colorado Springs, all roads will go through our property.”
Burrell has quietly developed a portfolio of 21 airports from Alaska to southern Florida, but is now making his investment strategy more public. It focuses on non-passenger facilities including cargo, corporate hangars, aerospace/defense and maintenance. The public-private partnerships are based on a bundled service package.
Last week, Burrell formalized a national design-build master services agreement with Lemartec, one of the leading aerospace general contractors and part of MasTec Inc. (NYSE: MTZ), a Fortune 500 construction company. The companies will work together to develop regional municipal airport projects that improve access to air cargo services and enable smaller airports to generate economic growth.
Burrell is also in talks to partner with a major airport services provider to handle cargo planes and operate terminals, Carver said. Finding tenants for the airport real estate is the responsibility of Cushman & Wakefield, a global real estate services company.
“Now that we have critical mass, we can make an appointment with DHL, for example, much easier than in Baton Rouge [Metropolitan Airport in Louisiana] alone,” said Carver, who took the helm at Burrell in August.
Between 2016-20, Carver was associate general manager for special projects at Los Angeles World Airports, the airport authority that operates Los Angeles International Airport.
“We have tried to create this pioneering position by choosing the airports that we think are the best,” he said. “What are the best airports? The airports that have the right geographic location, that are surrounded by large population bases, but also have airport administrations that are a bit more forward-thinking and willing to do things a bit differently. The more limited way of developing property at airports doesn’t work as well for the supply chain as it’s all about speed to market.”
More FreightWaves/American Shipper stories by Eric Kulisch.
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