Closes its First Prepaid Long-Term Hangar Lease with a $5.9 million Upfront Cash Payment
Sky Harbour Group Corporation (NYSE: SKYH, SKYH WS) (“SHG” or the “Company”), an aviation infrastructure company building the first nationwide network of Home Base Operator (HBO) campuses for business aircraft, announced today that its indirect, wholly-owned subsidiary Sky Harbour Capital III LLC (“SKYH Capital III”) is filing today with the Municipal Securities Rulemaking Board through its Electronic Municipal Market Access system (“EMMA”) a Preliminary Limited Offering Memorandum relating to the offering of $100 million of tax-exempt fixed rate bonds with a 5-year mandatory tender date (the “Series 2026 Bonds”), which are proposed to be issued by the Public Finance Authority of Wisconsin, a multi-jurisdictional conduit issuer. Through underwriters Barclays Capital, J.P. Morgan, and Academy Securities, SKYH Capital III expects to price the Series 2026 Bonds during the week of January 26th, after a two-week investor marketing period. The proceeds of the Series 2026 Bonds are expected to be used to finance the development of certain of the Company’s hangar campuses, as described below. The principal amount, structure, tenor and timing are preliminary and subject to change. Any such offering is dependent on market and other conditions, and there is no assurance that all or any of the Series 2026 Bonds will be offered.
Separately, Sky Harbour Capital II (“SKYH Capital II”) completed the onboarding of subsidiaries owning its hangar campuses at Camarillo Airport and Bradley International Airport to the borrowing base of its committed warehouse bank facility with JPMorgan Chase Bank, N.A. on January 8, 2026 (the “JPM Facility”). The Company also amended the JPM Facility in order to facilitate the flow of funds securing the proposed Series 2026 Bonds. These amendments have been filed under Form 8-K with the SEC. On the same date, SKYH Capital II drew funds of approximately $13 million to reimburse the Company for prior advances associated with capital expenditures at Bradley International Airport and certain costs of issuance and fund certain reserves for the JPM Facility.
Update on Leasing Activities
- Stabilized campuses: The Company expects revenue per square foot at its stabilized campuses to increase as legacy hangar leases turn over or are renewed and through the annual rent escalators embedded in all tenant leases.
- Recently opened campuses: As of January 9, 2026, Dallas Addison (ADS) Phase 1, Phoenix Deer Valley (DVT) and Denver Centennial (APA) have reached 87% ,73% and 27% occupancy levels, respectively.
- Pre-leasing: We continue our pre-lease activities at Washington Dulles (IAD), Bradley International Airport (BDL), and have begun pre-leasing at Miami-Opa Locka (OPF) Phase 2 and Addison (ADS) Phase 2. The latter two projects are under construction following the success of their respective Phase 1 developments, which are now nearly fully leased.
- Selective long-term partnerships: We have extended our documentation negotiation period under the letter of intent with a potential joint-venture partner leasing a single SH34 hangar at OPF Phase 2 through mid-March 2026, in order to address certain operational requirements. Separately, we continue discussions for similar joint ventures at other locations in the network with other parties.
- Ultra-long tenant leases: In late December, we entered into an amended lease with an existing tenant at OPF Phase 1 for a 15-year lease term in exchange for an upfront lump sum rent payment of $5.9 million.
Update on Capital Formation
- The proposed Series 2026 Bonds, if completed, would raise $100 million, reducing the need for additional equity contributions associated with the $200 million JPM Facility. As previously disclosed, the JPM Facility has a 5-year term commencing September 2025 with an interest rate of 80% of the sum of daily SOFR + 0.10%, plus 200 basis points. The Company subsequently entered into a floating-to-fixed interest rate swap, with a notional schedule based on the anticipated draws under the JPM Facility and a 4.73% fixed rate for the duration of the term of the JPM Facility. Proceeds from the JPM Facility and the Series 2026 Bonds are expected to be used to fund construction projects at Bradley International Airport (BDL), Salt Lake City International (SLC), Orlando Executive Airport (ORL), Hudson Valley Regional Airport (POU), Trenton-Mercer Airport (TTN), Chicago Executive Airport (PWK) and Dulles International Airport (IAD). The JPM Facility is expandable to $300 million subject to credit approval.
- If completed as planned, the $100 million raised from the Series 2026 Bond issuance and the $200 million of borrowing capacity available from the JPM Facility and other existing Company resources are expected to fully fund approximately 1.1 million rentable square feet of new hangars, for a total of approximately 2.1 million rentable square feet portfolio-wide.
- Selective long-term partnerships: Should the company enter selective long-term partnerships or ultra long-term tenant leases as described above, the Company expects to use the proceeds for the satisfaction of any of its future capital needs and for general corporate purposes.
- Internal Cash Flow Generation. The Company expects that between its leasing activities in Q4 2025, Q1 2026, and the anticipated opening of its OPF Phase 2 campus in Q2 2026, the Company will now be able to reinvest internally generated cash flows as equity for its future developments.
