Firm flying in new direction under Maguire; developer's foray into aviation brings changes.

Since acquiring Petersen Aviation, more than just the name has changed under the supervision of President Alec Maguire.

The aviation company at Van Nuys Airport has dropped charter service and is concentrating instead on leasing hangar and office space, selling fuel and performing minor maintenance.

In the coming year, Maguire and chief operating officer Tim Wray look to update the terminal at what is now called Maguire Aviation to remove the Spanish Mission influence on the first floor and better utilize the space on the second floor.

Executive suites will be carved out of the existing space to give more room to their tenants.

"As they evolve and mature with more aircraft, the tenants require more space," Wray said.

The facility was built by former publishing giant Robert E. Petersen, the founder of Hot Rod magazine who grew his media empire to more than 30 titles before selling it for $500 million. His charter service catered to political and entertainment figures.

Petersen Aviation changed hands in September, the first such business purchased by developer Robert Maguire, as well known in Los Angeles real estate circles as Petersen was known in the publishing world.

As the world's busiest general aviation airport any opportunity to be at Van Nuys is of value to a business owner. Although never having operated a fixed base facility before, the Maguire company certainly is familiar with the leasing of real estate and of the needs of aircraft owners, having several planes itself.

Wray's experience in the aviation field, including eight years at Raytheon's fixed base operation at Van Nuys, fills in the gap of running the business.

"I am confident we have all of our bases covered," Alec Maguire said.

The purchase falls into a pattern of private equity firms realizing the value of aviation businesses.

Last April, Macquarie Infrastructure Co. paid $338 million to acquire Trajen Holdings, Inc., owner and operator of 21 FBOs in 11 states. Through various acquisitions, equity firm The Carlyle Group cobbled together Landmark Aviation with a network of 35 fixed base operations.

The Raytheon fixed base operation at Van Nuys was sold in December as part of a $3.3 billion deal by a private equity firm formed by Goldman, Sachs and Onex Partners affiliate GS Capital Partners to acquire Raytheon's aircraft division.

"I think generally it is safe to say Robert Petersen saw an opportunity," Wray said of why the original owner sold.

While venture capitalists may not be attracted to FBOs because the return on investment is low, a real estate developer such as Maguire would be more comfortable with such an investment, said Robert Rodine, a Sherman Oaks consultant who has clients in the aviation field.

Real estate investors are more accustomed to shifting rental patterns one would find in running an FBO, Rodine said.

With a 12,000 square foot terminal and hangar space totaling 76,000 square feet on just more than 9 acres, Maguire Aviation is one of the larger facilities at the airport.

Big name clients using the facility when owned by Petersen--Occidental Petroleum, Hilton Hotels, Countrywide Insurance--stayed on following Maguire's purchase. The new owners retained 20 employees of Petersen's and added another 24 workers.

Some aviation tenants also happen to be tenants of Maguire's commercial holdings so the opportunity exists to cross sell to the same clients using the relationships already in place.

Maguire's changing the business model to eliminate the charter service resulted in a raise in rents that in turn did drive out some month-to-month clients who relocated to other facilities at the airport.

Under Petersen's ownership, the five charter planes owned by the company took up hangar space. By eliminating charter service, clients of Maguire now have access to that space.

"We opened the facility up to some of these major tenants and offered long-term leases or multi-year leases instead of month-to-month arrangements," Wray said.

The process leading to the purchase of Petersen took about a year.

By MARK R. MADLER

Staff Reporter