The Airport Terminal Logistics Giant
Airports offer more than just a convenient way for people to travel. In addition to serving the transportation needs of passengers, airports are also major logistical hubs for shipping and receiving cargo. And one of the biggest firms in the world looking after airport logistics is an Annapolis, Maryland company called Aeroterm.
Aeroterm owns and manages logistics facilities at some of the largest airports in Canada and the United States. “We are at 35 airports in North America,” says Aeroterm Vice President of Development, Alexi Lachambre.
These include huge aviation hubs such as John F. Kennedy International Airport (JFK) in New York, Chicago O’Hare International Airport (ORD), Miami International Airport (MIA) and Montreal-Pierre Elliott Trudeau International Airport (YUL). The company also a presence at smaller, but important locations such as Ted Stevens Anchorage International Airport (ANC) in Alaska and Will Rogers World Airport (OKC) in Oklahoma City.
Lachambre describes Aeroterm as “a terminal support operator. Our bedrock was cargo buildings – big warehouses, right by the tarmac, with aircraft parked in the back and product coming in and out. From there, we branched into flight kitchens, where they prep the food. We own some hangars, and we own what’s commonly known as GSE – ground support equipment – all those little buggies pulling aircraft.”
He adds, “We see ourselves as a leader in airport solutions for terminal support buildings. By leaps and bounds, we are the sole largest owner of airport properties in North America.”
Aeroterm is more than just a property owner, however. The company works on new airport building projects as well. The Aeroterm team can offer expertise in terms of master/site planning, construction management and building design. “Aeroterm carefully studies each site to identify the optimal solutions for the placement of the facility, size of the facility, location of airport positions, truck court sizing, auto parking and airside access,” explains the company website.
Of course, efficiency is a central part of Aeroterm’s building design philosophy. The company understands how valuable airport warehouse space is and opts for approaches aimed at reducing costs and streamlining operations for tenants. For instance, Aeroterm might incorporate a second-level mezzanine space in its plans, so tenants can set up support offices above the warehouse level. Building designs are also optimized for cargo flow.
Aeroterm is part of Realterm, a private-equity firm that focuses on niche real estate asset classes. Parent company Realterm owns and manages more than $4.5 billion in real estate around the world. Aeroterm itself can trace its origins to the early 1990s, when business partners Kenneth Code and John Cammett began to seek opportunities in transportation infrastructure. One opportunity centered on Canadian airport logistics facilities. Back in the 1980s, the Canadian government announced it would no longer directly own and operate airports. The government would retain land ownership but handed over operational responsibility at the country’s largest airports to local authorities. In Quebec, the latter included the Montreal Airport Authority (Aéroports de Montréal). Decentralization opened up new prospects for private companies interested in airport-related ventures.
In 1991, Code and Cammett signed a ground lease for airport cargo and service buildings in Montreal. From this start, Aeroterm was born. Working closely with the Montreal Airport Authority, Aeroterm embarked on a major modernization effort of its new airport facilities. “From there, they grew, with further acquisitions and developments across Canada and the U.S.,” recalls Lachambre.
Partnerships were established with airport authorities and tenants and the company expanded enormously. Aeroterm took a collaborative approach with airport authorities, working with them on all manner of issues related to cargo logistics facilities, including leasing, construction, financing, management and development. Through such efforts, Aeroterm built a portfolio that includes over nine million square feet of property at major air cargo hubs.
In addition to its Annapolis headquarters, Aeroterm has other offices in cities such as Montreal and continues to grow its continent-wide presence.
On December 23, 2016, for example, Aeroterm officials participated in a launch ceremony marking the opening of the first phase of a huge development at Chicago’s O’Hare International Airport Northeast Cargo Center. The project aims to massively increase O’Hare’s cargo capacity while improving efficiency. In total, the project will entail the construction of over 900,000 square feet of new warehouse and office space and new apron pavement for freighter aircraft. Work on the Cargo Center was budgeted at $220 million, with $160 million coming from Aeroterm. The 2016 launch ceremony also featured Chicago Mayor Rahm Emanuel and government aviation officials.
Currently, Aeroterm is involved in ventures at Cincinnati/Northern Kentucky International Airport (CVG) and Miami International Airport. “There are two main projects we’ve broken ground on. The first one is in Cincinnati. That’s a Class A multi-tenant terminal support building that should be delivered in November of this year. It will be anchored by FedEx. It’s about a 50,000 square foot building. The other is at Miami International Airport. We own a building in Miami that’s roughly 150,000 square feet. It’s a single-tenant building, leased to FedEx. We are in the process of doubling the size of the building,” says Lachambre.
The CVG facility is intended to accommodate cargo, ground support equipment operators, and more. The Cincinnati/North Kentucky International Airport has been getting busier as of late, with a nearly 20 percent increase in annual cargo tonnage from 2017 to 2018. Last year, CVG recorded over 1.2 million tons (this works out to 2.4 billion pounds) of cargo – the highest level in the airport’s history. Passenger traffic has also increased.
Miami International Airport, meanwhile, was the fourth busiest airport in the United States in 2017 in terms of total cargo freight. That same year MIA was the single busiest airport for international freight. Miami International Airport is a major entry point for goods coming from South America, including perishable items, and the weight of cargo shipped at the Miami airport increased by nearly three percent in 2018, making expanded air cargo facilities a priority.
Aeroterm promotes itself online and in person. Company representatives routinely visit or exhibit at trade conferences and are frequently called upon to serve on industry panels.
When it comes to hiring new staff, Aeroterm tries to keep diversity in mind. “We have a very diverse group of people here from different backgrounds. I think collectively, we all benefit from having different perspectives. We all have specialties we bring to the table. We have accountants, people in leasing, in property management, financing, fundraising. You’ve literally got every different kind of persona in the company here,” notes Lachambre.
As Lachambre makes clear, however, Aeroterm isn’t just focused on the bottom line. Like its parent firm, Aeroterm takes corporate citizenship and sustainability very seriously.
“On the citizenship front, I think we all want to be better people here in regards to working with each other. We make a point of being good family members to each other, helping each other out. We want to bring everyone together – work hard, but have fun. We also give to a lot of charities. We just held an air cargo industry golf tournament in Montreal to raise money for the Montreal Children’s Hospital. When there was flooding in Houston, we gave a sizeable donation there. There was flooding in Montreal last year; we gave a donation. Social outreach is important,” shares Lachambre.
“On the environmental front, it all comes down to buildings and trying to build properties that are more efficient, that have LEED design. We try to promote access to public transit; we have bike racks for bicycles. One large property we built in Chicago a few years ago has a green roof, a big garden on the roof. Building design is the main contribution to environmental requirements,” he continues.
In similar fashion, the CVG project involves a LEED-certified building with various energy-saving features.
Lachambre sees both challenge and opportunity in Aeroterm’s future. On one hand, the U.S. economy is strong and the e-commerce sector continues to grow. This means more retailers will be shipping goods, which means more demand for airport logistical services and facilities. At the same time, many North American airports aren’t exactly in prime shape.
“There are a lot of very large redevelopments that are coming up at airports,” he states. “Pretty much everyone knows our airport infrastructure is somewhat antiquated in North America right now. Dealing with the amount of growth that’s out there is a challenge.”
Lachambre believes that Aeroterm is more than up to this challenge. In fact, he looks forward to further growth and big development and expansion projects. “We hope to be involved in more large-scale redevelopments. We hope to be the solutions provider who brings infrastructure at our airports to Class A international standards,” he states.
While the company’s focus into the future will almost certainly remain on airports, Aeroterm isn’t averse to eventually broadening the range of its operations down the road.
“I think we’re at a point right now where we have the scale and expertise to take on pretty much anything at airports,” says Lachambre. “So, it will be interesting to see what opportunities come our way over time. We’re definitely open to looking at every opportunity at airports.”