Also, using our currency to potentially even do things in the M&A market, even again, if we’re dealing with the rises. So being a public company, I’ve come around full circle here. And so, [Jaime], I appreciate your question. I also appreciate your following. I know you’ve been following us for a couple of years from the Harvard Business School, a contingent of people who invest in Sky Harbour.
Tal Keinan: This is Tal. I’m going to add to that. I think we’ve been lucky enough so far that we run this company as though it’s a private company in that we’ve not sacrificed the long-term for the short-term in any case here. We’re running it so far exactly as we think it should be run. I think we’ve got, I think, a good following of major shareholders who understand, what we’re doing. By the way, many of them tenants to who really understand the business model and the value that we’re that we’re bringing. So I agree with Francisco on balance. I think this ended up being a good decision.
Operator: Your next question comes from [David Penone]. Could you please comment on the timing and structure of future bond issuance? And what does management expect to pursue an investment grade rating for the muni bonds?
Francisco Gonzalez: Thank you, David, for the question and also for your first participation in a bond issue back two years ago. Indeed, as I said earlier, reaching investment grade is one of our objectives. Obviously, we got to do and have a little bit of more history to show the ranges and have a structure to get to investment grade. So we plan to I think the right timing when all those, things will come together will probably be in the earlier or middle of next year, somewhere of 2025. And, so that will be kind of like our timing of our goal to do that. And then again, in terms of the next bond issue, if we can wait till then and be able to you know, we have done all the breakeven analysis about forming ourselves through other means, entering debt, bank debt, equity financing and so on and then recapitulate ourselves and achieve and capture that 200, 250 basis points savings.
I mean anybody who has the calculators, we’re looking in long-term debt. Our first bond issue was 33 year final, 25 year average life. When you get 200, 250 basis points savings both going in best in grade versus non-rated, and you present value up to today, boy, that’s a lot of money of savings if you can capture them. And we’re looking to — we our objective is to try to capture that before we do our next permanent bond deal.
Operator: From [Mike Nipp], in your recent interview with the Motley Fool, you in indicated no other type of real estate has unit economics nearly as attractive as this. Can you expand upon that?
Tal Keinan : I don’t know if no other type of real estate, but I I’ll say, look. I haven’t seen too many asset classes where you’re able to achieve consistent double-digit yield on cost — unlevered yield on cost. And I think, if just in case people, miss the point this is at non-Tier 1 airports. Again, your construction costs will vary within a pretty limited range. Your OpEx will vary within a pretty limited range. Rent is really what drives the unit economics of this business. We’re very happy with airports where we’re getting per square foot rents in the 30s and 40s. But as you’ll see, as we get into more and more of these Tier 1 markets, we are holding again your CapEx and your OpEx relatively constant but increasing revenue significantly, that is unit economics will respond correspondingly.
Again, this is without what Francisco was alluding to earlier, which is this real kind of afterburner of municipal bonds, kind of a very elegant and efficient form of leverage in this business. I’m talking about unlevered returns in the double-digits. I don’t know too many areas in real estate where that’s readily achievable today.
Operator: Your next question comes from [Connor Kim]. During the capital raise in November, where you priced it at $6.50 per share, do you feel that this was an attractive price for you to raise capital, considering the market is now valuing it at double that price? Or did you place significant value on the partnership of the investors?
Francisco Gonzalez: It’s important to know that even though we announced the pipe around October, November, probably November of last year, it was something that was being negotiated during the summer when our stock was trading in the $4 to $5 range. So it was a pipe that was coming actually at a premium to the observed equity price. And we did it in a limited amount of capital rapid to our future needs and we thought it made sense to seamlessly market our market access. Our market access has a common stock offering type with our preference, over the things that you see out there. And again, we didn’t need the cash right now. It was the right, thing to do for us, for the company and I think the market reaction has proven that strategy.
And I’ll let Tal comment on the partnership of the investors because some have been publicly disclosed and we can talk about that in terms of your being some of them are tenants. Some of them are people with affinity to the aviation industry. And then others have wanted to remain private, but they’re very — people who are very significant in terms of investment community in the United States.
Tal Keinan: I think that’s right. Look, that investment round or that pipe deal had some of the most sophisticated business jet owners in the United States in it. Again, like Francisco said, some of them disclosed, some of them not disclosed. I would say all of them have been extremely active, since we closed that route in everything from site acquisition to introducing us to, again, some of the best residents we could we could possibly hope for in the business. So all told no regrets. We don’t look back. I think we’re very happy to have to have completed that at the size that we indicated. So we’re quite pleased with that investment round.
Francisco Gonzalez: So, operator, I know we have hit the one hour mark. I know there are many other questions to remain in queue. But at this juncture, you have to keep this tight for an hour. I’ll ask and we’ll, we have people’s questions. We’re going to respond back to people individually via email. So at this juncture, we’re going to close the webcast but not before thanking everybody for joining us this afternoon and for your interest in Sky Harbour. Additional information may be found on our website, www.skyharbour.group. And you can always reach to us directly with any additional questions through email investors@skyharbour.group If you wish to visit our campus, please let us know, and we’ll arrange a tour. I know several of you took advantage of this opportunity in the last few months. So, again, thank you for your participation. And with this, we have concluded our webcast. Operator, thank you.
Operator: Ladies and gentlemen, this does conclude today’s conference call. Thank you for your participation and you may now disconnect.
