Cover article for April 2013 King Air magazine

A MAGAZINE FOR THE OWNER/PILOT OF KING AIR AIRCRAFT

APRIL 2013 • VOLUME 7, NUMBER 3 • $4.50

Business Savvy

King Air is Perfect Business Tool for Herman & Kittle Properties

Growing

with the K

by Melinda Schnyder

H

erman & Kittle Properties, Inc. (HKP) recently was recognized as Affordable Housing Finance’s 21st largest affordable housing developer and Inside Self-Storage’s 55th largest self-storage owner in the United States. CEO Jeffrey L. Kittle said the Indianapolis-based company’s $500 million portfolio wouldn’t be possible if his hard-working team didn’t have access to a business aircraft. In September 2012, HKP took delivery of a new Beechcraft King Air 350i – the historic 7,000th King Air delivered from the factory since the legendary line of twin-engine turboprops began production in 1964.

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The Team Herman & Kittle Properties is built on a foundation of providing affordable housing to communities. The company is the successor to companies that have been around since 1948 in the form of Herman Associates, Inc. and Stanley Herman Homes. When Stanley Herman retired, his son Tom Herman aggressively continued the company’s affordable housing focus while expanding into the self-storage industry. Jeffrey Kittle joined the firm in 1998 as a real estate developer. In 2002, Kittle became co-owner and the company changed its name to Herman & Kittle Properties, Inc.

As Herman & Kittle Properties’ King Air neared completion at the factory in Wichita, Kan., the company was told it would be the owner of a milestone aircraft: the 7,000th King Air produced since deliveries began in 1964 with the original Beechcraft King Air Model 90.

Jeff Kittle poses with HKP’s milestone King Air at the delivery ceremony.

(Photo courtesy of T&J Studios)

King Air Herman & Kittle Properties, Inc. upgrades from a 200 to a 350i, and uses the historic 7,000th King Air ever produced as a true business tool APRIL 2013

Together, Herman and Kittle grew the company by expanding HKP’s geographic footprint and by adding a market-rate conventional multi-family housing model to the affordable housing products it offered. Tom Herman retired in 2010, making Kittle the president, CEO and sole owner of HKP. Today, HKP has 312 employees and a portfolio of nearly 110 properties that is diverse in both product and geographic location. Those properties consist of more than 8,200 apartment homes and more than 12,000 self-storage units in 10 states throughout the Midwest and Gulf regions of the United States.

Kittle describes HKP as a vertically integrated company with four main areas of interest: property development, construction, financing and property management. A customer might have a property that simply needs managed. Or, a customer might need an apartment complex constructed, developed, financed and managed – which HKP can do from beginning to end.

“If we didn’t have the airplane, our business model would have had to change,” said Kittle, an Indianapolis native with a bachelor’s degree and an MBA from Indiana University. “There would be no way we could have effectively run and grown our portfolio over the past 10 years with existing staffing levels.”

The Aircraft HKP began using business aviation a decade ago, first flying a Cessna 340 twin-engine piston and then a 1979 King Air 200 with newer engines. Kittle had such a great ownership experience with his first King Air that he knew he wanted to stay in the family when his business’ transportation needs changed.

“As a real estate developer, I’ve got sites I’m looking at in 15 to 20 states at any given time. Sometimes I can combine looking at those properties with a personal visit along with my wife and our two daughters, who are nine and 10 years old,” Kittle said. “Knowing that we fly so much and that from Indianapolis we often fly through some not-so-perfect weather, we wanted a capable, safe airplane that’s been proven over the years as King Airs have been.”

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HKP CEO Jeff Kittle is impressed with the comfort and technology found in the cabin of his new King Air 350i, which he calls a true workspace for himself and other company executives onboard. (Photo courtesy of Herman Kittle Properties)

Grand Rapids Flint He said he considered a jet but decided that the King Air Lansing 350i offered the ideal combination of payload and range

Ontario

Montagna was an airline and charter pilot for 35 years Syracuse Rochester before joining HKP in 2012. He said the King Air 350i’s Rockwell Collins Pro Line 21 avionics package, with its Buffalo three 8-inch by 10-inch LCDs, was a huge step up from the steam gauges in the King Air 200. “The Pro Line 21

Detroit

for his various mission profiles, a quiet and comfortable state-of-the-art cabin, as well as comprehensive warranty rie ake E700 and customer support programs. “We fly less Lthan miles for most of our trips, and we get there as fast as a business jet while burning less fuel and with our team being very comfortable and productive in the cabin,” Kittle said.

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Twelve stops in three states, visiting 21 properties in three days and home in time for dinner with the family, Jeff Kittle uses the company’s King Air 350i as a true business tool.

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Chief Pilot Joe Montagna said the aircraft has delivered on its performance promises. “The airplane is overpowered with those two Pratt & Whitney Canada PT6A-60A engines. They give it a ceiling of 35,000 feet and it’ll do every bit of that,” Montagna said.Montpelier “It’ll carry a load and do it fast; we’ve been getting about 300 knots Lake true airspeed.”

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While HKP doesn’t own property in the western part of the United States, the team does travel there for meetings. In the King Air 200, a trip to Denver from its home base at Indianapolis Executive Airport (TWQ) required a fuel stop. In the King Air 350i, it’s non-stop with two pilots and nine passengers. “Probably the biggest selling point for us with the King Air 350i was the flexibility to load the plane up with full passengers and full fuel; there’s almost no airplane you can do that with,” Kittle said.

SOUTH CAROLINA APRIL 2013

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is similar to what I flew in Boeing 737-800s at ATA Airlines, so it was a very easy transition. It’s a state-ofthe-art system and I can’t think of much more a pilot would want in an airplane,” he said.

Montagna said the King Air 350i has been a safe and reliable aircraft, handling the winter’s icing conditions very well. “It’s beautiful. It’s a limo and a sports car all in one. I just love it,” he said.

In the cabin, Kittle has been impressed with everything from the richness of the feature-laden Rockwell Collins Venue cabin management system, the comfort of the seats and the dual climate controls to the small detail of a high-end coffee dispenser that keeps his beverage hot.

“The airplane comes standard with so many options,” Kittle said.

Business Aviation Benefit With the King Air 200, HKP flew about 300 hours per year. Since taking delivery of the King Air 350i in September, HKP has averaged 60 hours per month. The aircraft gets flown three to four days a week, mostly to transport two to nine team members to current and prospective properties.

Seventy percent of HKP’s missions in the King Air 350i are flown with two pilots according to Chief Pilot Joe Montagna, shown on the left next to Co-pilot Pat Gaston. (Photo courtesy of Herman Kittle Properties)

A recent week for the aircraft went like this: Monday through Wednesday, Kittle and other team members visited the East Coast to evaluate a possible

portfolio acquisition. Friday and Saturday, HKP’s head of construction flew to Louisiana and Texas to check in on four or five current construction jobs. The trip

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early in the week consisted of 12 stops as the team visited 21 properties in Virginia, North Carolina and South Carolina. The properties were all within 60-80 miles of each other.

“The King Air was like a time machine on this trip,” Montagna said. “We had a lot of short legs, with each about a 12- or 13-minute flight. The team would hop out, get in a rental car and drive about 10 or 15 minutes to the property. Then, they’d come back and we’d be off to the next location.”

Kittle added, “There’s no way we could’ve effectively evaluated this property portfolio without private aviation, and specifically the King Air. Some of the runways we landed at were as short as 3,000 feet – which a jet wouldn’t have been able to do – and we had some weather conditions that would’ve been difficult in a piston. With the King Air, I got home in time to have dinner with my family on Wednesday night.”

Family dinner was possible, he said, because the last leg of the trip from South Carolina back to Indianapolis gave him an hour and a half of broadband connectivity – something the previous aircraft didn’t have. Hawker Beechcraft Services in Indianapolis installed an Aircell Gogo Biz broadband Internet system prior to HKP’s delivery. This upgrade allows passengers to perform online tasks from texting to sending and receiving

email and large attachments at the same speeds a person would expect sitting in their office.

“The addition of broadband Internet and phone access has made the airplane a true workspace,” Kittle said.

“Being able to stay in touch and reply to messages in real-time has tremendous value that will quickly exceed the cost of that upgrade.”

Kittle put the system to the test soon after the company took delivery last September. His team covered 2,000 miles during a 30-hour trip. They departed Indianapolis on a Thursday morning with a stop in Alexandria, La., to close on a set of real estate projects and then had meetings and spent the night in Savannah, Ga. On Friday, they flew to Jacksonville, Fla., and Atlanta to look at possible property acquisitions before flying home to Indianapolis.

“We spent about seven hours in the air on that trip and our team was highly productive the entire time thanks to the broadband and phone system. Being able to respond in real-time or calling to interact with people – that’s powerful,” Kittle said. “I personally got through 700 emails and when we landed back in Indianapolis at 4 p.m. Friday, I had my work taken care of so I could be with my family and not catching up on email.” KA

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