The microhotel trend, first popularized in Japan, is landing in Philadelphia.

Modus Hotels, a subsidiary of Conrad Cafritz's D.C.-based investment vehicle Cafritz Interests, will soon break ground on an 11-story microhotel with 252 rooms averaging 170 SF (including a bathroom), the Philadelphia Inquirer reports. The hotel will be called Pod Philly, under the same Pod Hotels brand umbrella that Modus operates for Pod DC and other operators use for multiple locations in New York.

Pod Philly will rise on what is now a parking lot just off the southeast corner of 19th and Ludlow streets in Center City. Parkway Corp. owns the lot and is co-developing the hotel with Modus, according to the Inquirer. Parkway and Modus obtained construction financing through a $38.5M, nonrecourse, senior construction loan from Bank of the Ozarks and a $15M mezzanine loan from an unnamed source — both arranged by Meridian Capital Group, Commercial Observer reports.

When the hotel is completed (expected by the end of 2019), it will include a ground-floor restaurant with a coffee shop and a rooftop bar with a retractable canopy, both operated by Defined Hospitality. The company, run by chef Nick Kennedy and former Starr Restaurants Director of Restaurants Greg Root, also runs restaurants Root and the soon-to-open Suraya in Fishtown.

Modus and Parkway are hoping the discount rates associated with tiny rooms — Cafritz estimates charging 20% below the market rate for standard-size rooms — can help offset the effect of an increasingly crowded hotel market. From 2016 to 2019, Philly will increase the number of its available hotel rooms by 21%, according to a CBRE report cited by the Inquirer. Already, the crowding's effect can be seen in Carl Dranoff's decision to abandon a planned hotel on South Broad Street in favor of condos.