Dear Friends,

I am pleased to present the attached corporate presentation detailing the activities and business operations of Burrell Aviation.  This letter provides a brief overview of more than four years of extensive work conducted by our team to position the company as a market leader in airport investment, infrastructure development, ground operations and air cargo distribution. 

The company is now capable of providing advanced, build-to-suit facility solutions for a variety of aviation users across North America, in sectors that include (among others) air cargo, integrated logistics, cold storage, aerospace/defense, medical supply, governmental/emergency services, local industrial, general aviation, maintenance, repair & overhaul (“MRO”), third-party logistics, surface logistics, and emerging technologies. With over twenty international and regional municipal airport locations currently in the Burrell Aviation portfolio, the company is not only growing rapidly, but is positioned for a bright and promising future

As a secondary strategy to its core infrastructure development initiative, Burrell Aviation has also entered the independent, private air cargo market, one of the most underserved and least-competitive market segments of the supply chain delivery system, through the acquisition of a point to point, scheduled air service provider that is poised to begin operations in the next 24 months and will provide a lower-cost alternative to users with differentiated characteristics from the majors (e.g., FedEx and UPS). With an operational hub at Fort Worth Alliance Airport (AFW), BA Cargo Express will have the capacity to serve 42 markets through the operation of twenty-five Boeing 737-800 aircraft.

Burrell Aviation evolved out of my background in commercial real estate, construction, infrastructure development, and governmental work, focused heavily on establishing long-term public-private partnerships, which primarily began in health care. Even prior to the onset of the COVID-19 pandemic, I felt that the limited availability of high-quality industrial warehousing space to address current and future supply chain issues was problematic and would only become more challenging with time, particularly at airport locations across North America that were suffering under the weight of land scarcity issues and a shortfall in public funding for their non-passenger development needs.

To provide some context, for the past 20 years, cities, counties and airport authorities across the country have largely focused their capital investment programs on the passenger-related elements of their airports and operations.  Following the September 11^th terrorist attacks, for example, emphasis was immediately devoted towards enhancing airport and passenger security, integrating cellular data and communications, implementing modernized baggage screening systems, and other similar endeavors.  The next several years saw a heightened emphasis on otherwise improving the passenger experience at all levels, including enhancement of terminal lounges and concessions, the emergence of ride share networks such as Uber and Lyft, traffic mitigation, smart parking and other passenger-centric elements.

Meanwhile, the non-passenger airport activities such as cargo handling; maintenance, repair and overhaul (MRO); integrated logistics; and related business lines received very limited public investment, forcing airlines, handlers and other service providers to operate in facilities at or near the end of their life expectancies, and with little capacity for further volume growth.

At the same time, logistics infrastructure outside the airport continued to evolve at a steady pace, with E-commerce and integrated logistics companies adopting leading-edge handling and communications systems into their facilities and data networks.

In 2020, the COVID-19 global pandemic suddenly placed a spotlight on the importance of air cargo to the resiliency of the U.S. aviation industry and the satisfaction of consumer demands, and consequently, on the pending capacity shortfall and facility obsolescence across the system.  While passenger traffic dropped to levels unprecedented in the modern era due to virus fears, air cargo activity grew at a double-digit pace on account of this same trepidation to shop in public.  The general embrace of E-commerce and consumer expectations of just-in-time delivery have catalyzed a long-term shift within the U.S. supply chain industry, and it has become clear that purchasing norms and their corresponding logistical demands have forever changed.

Simultaneously, greater recognition of the critical importance of air cargo to a regional population became appreciated, as pharmaceuticals, medical equipment, personal protective equipment (PPE), electronics and perishables (to name just a few categories of importance) are almost exclusively reliant on air transport.  By mid-2021, aviation analysts and their engineers began to adjust their previous cargo growth forecasts to reflect a “post-COVID growth trajectory.”  What had been a steady 3.9% CAGR through 2040 was soon revised by many to reflect 10% year-to-year growth through at least 2025, and to then begin to stabilize but at a much higher volume level.  This realization immediately caused alarm among stakeholders of the major gateway airports such as MIA, LAX and JFK, who began to recognize that their maximum cargo handling capacity was much closer to the tipping point than previously appreciated.

For the more regional airports – those located in proximity to major international airports and gateway cargo hubs – the looming capacity ceilings at the Tier 1 airports suddenly represented an opportunity. With cargo airlines now forced to begin exploring alternative routes, bifurcated operations and contingency planning, the ability for the secondary airports to capture new business lines and revenue streams for the future began to emerge.  However, like their larger airport counterparts, many are similarly disadvantaged by the lack of budgetary funds within their Capital Improvement Program (CIP) to develop the needed facilities in the near term to accommodate, and take advantage of, the rising demand.

Understanding these evolving dynamics of non-passenger aviation was the easy part of recognizing the need for a company such as Burrell Aviation to provide solutions for the supply/demand imbalance affecting on-runway infrastructure.  The more difficult part was implementing the development of such a company and executing the early-stage launch.

Once we became comfortable that the market barriers to entry were considerable enough to make a long-term financial commitment and investment in Burrell Aviation worthwhile, the logical first step in our process was to develop meaningful public-private partnerships with the municipal airports that we believe will be the beneficiaries of the trends described above and critical to absorbing the “spill over” traffic from constrained hubs. Thus, site selection was critical. 

Using a comprehensive internal and external evaluation process to select airside sites that yield maximum current and future developmental value, we started with 4,950 airports and ended with 86 well-qualified targets, with innumerable filtering steps across a range of criteria along the way.  These airports were evaluated based on a variety of considerations, including (though not limited to) geographical proximity to major metropolitan statistical areas, engineering attributes, market demand, financial viability, environmental concerns, and governmental/regulatory backdrop.

With the target list of airports for the implementation of our strategy identified, the process of actually securing the land (i.e., the master ground lease process) became the core focus.  Burrell Aviation enters into these long-term leases, right-of-first-refusal (“ROFR”) agreements, and other similar contracts that yield an exclusive right to valuable airside real estate. Recognizing the scarcity in suitable parcels for development within the vicinity of major metropolitan statistical areas, the company has strategically leased land at airports where its acreage represents the last available option for a largescale operation.  Understandably, conducting business with a government entity is a lengthy and expensive process involving a multitude of stakeholders (airport staff, their contracted engineers, and their governing body of elected officials, among others).  Fortunately, the multi-year process has been a successful one, resulting in an assemblage of North American airports that now stretches from Alaska to Florida. 

It goes without saying that strong companies need to have strong partners, and Burrell Aviation has executed agreements with its most critical partners, each of whom fill a specific role in our infrastructure development program.  Lemartec, our construction partner, provides Burrell Aviation a methodology to accurately predict the costs associated with the various types of aviation construction. Lemartec will be creating a “kit of parts,” including ready-made build plans, unique to each of the Burrell Aviation product lines (e.g., hangars, maintenance and repair facilities, cold storage facilities, etc.).  This will allow Burrell Aviation to offer its subtenants accurate cost assumptions and faster speed to market. 

Alliance Ground International is Burrell Aviation’s preferred cargo and ground handler and brings with them considerable operational capabilities and a wealth of knowledge regarding the operations of various cargo companies.  Perez & Perez Architects Planners, our design partner, provides expertise in the field of project design and construction throughout the development process. Services provided to Burrell Aviation include architectural design, interior design, project planning, construction, administration and LEED certification. 

Burrell Aviation’s site engineering partners, Kimley-Horn and Armstrong Consultants, collaborate with both Burrell Aviation and the airport’s own team to understand and organize the forecasted project entitlements, site challenges, and value engineering options available, generating a site concept plan matching the unique specifications of each property.

Given the emphasis on real estate in Burrell Aviation’s operating model, our partners include two of the world’s premier globally integrated commercial real estate services and investment firms.  Cushman & Wakefield will market to and identify potential subtenants for Burrell Aviation’s national portfolio of development sites.  Cushman’s services to Burrell Aviation will include services such as public relations, communications, brochure and marketing material development, reporting/deal tracking, target market database development, website, and artwork.  CBRE is Burrell Aviation’s third-party consultant, providing detailed reports on the feasibility of development at airport sites selected by Burrell Aviation as potential targets and recommending a development mix across various construction categories.  Additionally, CBRE has provided appraisal estimates as to certain individual airport sites that are under contract with Burrell Aviation or are in late/medium-stage negotiations, and without subtenants (i.e., their intrinsic value assuming no subleasing or development).

With a nationwide portfolio of airports under its control, Burrell Aviation envisions the development of 35 on-runway airport locations in three distinct tranches, each being developed over a 5-year period and comprising approximately 250,000 square feet of vertical construction per individual airport.  Certain subtenant end users will occupy only a single Burrell Aviation site, while others are expected to take a more programmatic approach and sublease several locations throughout the airport portfolio. 

Overall, the Burrell Aviation strategies are unique. They accelerate project timelines and delivery, positioning the company to construct build-to-suit infrastructure on demand for qualified airfield users from coast to coast at airports that represent the only logical “spillover” space available. At the same time, the company enters the market as one of only a select few independent, scheduled, point-to-point air cargo services in the U.S. providing same-day/overnight delivery, through its BA Cargo Express platform.

I invite you to review the presentation that follows, which provides a more detailed review of all aspects of our business platform, and greatly appreciate your interest in Burrell Aviation.

Best Regards,

Dan Burrell

Founder & Chairman