Contact Us
News

Here's Why Hotels Take Longer To Construct Than Any Other Commercial Building

Want to get a jump-start on upcoming deals? Meet the major players at one of our upcoming national events!

While the U.S. hotel industry is still riding a building boom, research shows the popular commercial real estate asset class also takes the longest to build. 

A 20-year study on hotel construction times conducted by The Real Deal revealed the average hotel takes close to a year longer to build than any other property type.

Here's Why Hotels Take Longer To Construct Than Any Other Commercial Building
The Standard, High Line hotel in Manhattan

The discrepancy in completion times is tied to longer permitting processes for hotels than other buildings, with hotels taking 56% longer to attain initial building permits than other types of projects, The Real Deal reports. The construction phase narrows the gap, as hotels only take 10% longer to build than other asset classes.

André Balazs Properties’ The Standard, High Line — a 19-story, 200K SF property on Manhattan’s High Line — completed in December 2008, three years and nine months after the developer began work on the project. In another case, JD Carlisle Development’s 53-story, 620K SF Beatrice Apartments in Manhattan only took three years to develop.

Hotels are often larger than other types of buildings, with the median New York City hotel taking about 50K SF of floor space compared to the 15K SF of median office space, but that is only a partial factor. Hotels completions are often extended due to their stricter building codes. There are more safety concerns when it comes to hotels given their constant stream of guests compared to multifamily or office assets. 

Fire alarm systems at hotels also require complex inspections that aren’t typically seen in other buildings by the Department of Buildings and New York City Fire Department, according to the Department of Buildings.

The timeline could also get even longer in New York thanks to additional regulations under consideration by local politicians. Light manufacturing districts like Long Island City and Jamaica, Queens, have attracted hotel developers, with 13% of existing hotel rooms and 30% of the hotel development pipeline slated to go into these areas, dubbed M1 districts. 

The New York City Department of Planning has proposed a zoning amendment to require special permitting for future M1 hotels, which could pose challenges to the sector while the city pushes to maintain a certain level of industrial use in these neighborhoods.