Hotels take longer to build than other property types — soon it may take longer

Lodging facilities in light manufacturing zones could be subject to special permit rules

A construction worker asking for the time (Credit: iStock)
A construction worker asking for the time (Credit: iStock)

Hotel construction experienced a remarkable boom in the mid-2010s, with ripple effects that are still felt to this day. As it turns out, building a new hotel is also a more time-consuming enterprise than building any other property type — at least according to the numbers.

An analysis of construction times over the last 20 years by The Real Deal has found that the average hotel already takes nearly a year longer to complete than any other property type.

Considering more than 6,000 new building projects completed over the last two decades — including nearly 5,000 residential buildings and more than 200 each of hotels, office and retail buildings — TRD discovered that while the median project completion time for a hotel was three years and 11 months, the median completion time for other buildings was just under three years. That’s a 23 percent difference.

This discrepancy first becomes apparent during the permitting stage (from when a construction job is first filed to when the first permits are issued). On average, hotels spend 56 percent more time waiting for their first permits than other buildings do. The gap shrinks somewhat during actual construction — from permit issuance to receipt of an temporary certificate of occupancy — with hotels taking just 10 percent longer to build than other buildings.

Sam Chang, one of the city’s most prolific hotel developers, said he wasn’t sure if hotels actually take longer to build.

“It usually takes about three to four years to build a building,” he said. “I only do hotels, so I don’t really know how other buildings might be different.”

Of course, numerous factors contribute to the amount of time a new building will take to permit and construct, so no one project is the same.

“Every project is different, and things like weather and contractors will all affect how long it takes to get done,” said Dustin Stolly, co-head of the debt and structured finance group at Newmark Knight Frank. “Some simple hotels can get built really fast, and more upscale hotels can take longer. So I’m not sure I would say that hotels take longer to build than other buildings.”

Size, of course, could somewhat dictate the timeline. The median hotel in New York City, with 50,000 square feet of floor space, is more than three times as large as the median office (15,000 square feet) or apartment building (11,000 square feet).

But further analysis shows that even when geography and size are taken into account, hotels still tend to take longer to complete. After grouping building across all property types into size categories (by both floor count and square footage) and location (Manhattan v. the outer boroughs), TRD’s analysis found that hotels were usually the most long-running within each grouping, or second only to office buildings in a few cases.

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Another factor that could contribute to the lengthier timeline is that hotels are subject to slightly different building code rules. The transient nature of hotels, with many residents passing through for short periods of time, results in particular safety concerns that regular apartments do not have.

“For hotel projects specifically, timelines could be extended due to the requirements for fire alarm systems,” a Department of Buildings spokesperson said in an email. “[These] are generally more complicated than in other building types, requiring inspections from both DOB and FDNY.”

And now, the city is considering a new rule that would require special permits for hotel construction in manufacturing zones.

Much of the recent boom in hotel construction has been in the outer boroughs, which are also the primary target of proposed rules to limit hotel construction in M1 or light manufacturing zones. Among construction projects analyzed by TRD, about one-third were built in M1 zoning districts, and those projects took four months fewer to complete on average.

These are a few of the projects with the “most average” build times in New York City:

The median Manhattan hotel: The Standard Hotel at the High Line by André Balazs Properties at 848 Washington Street. The 19-story, 200,000-square-foot property was built in three years and 9 months (1,384 days, March 2005 to December 2008).

The median Manhattan residential building: Beatrice Apartments by JD Carlisle Development at 105 West 29th Street. The 53-story, 620,000-square-foot property was built in three years (1,100 days, April 2007 to April 2010).

The median outer borough hotel: Aloft Long Island City by Nissim Seliktar at 27-45 Jackson Avenue in Long Island City, Queens. The 19-story, 67,000-square-foot property was built in four years (1,470 days, December 2012 to December 2016).

The median outer borough residential building: TF Cornerstone’s 33 Bond Street in Brooklyn. The 25-story, 600,000-square-foot property was built in two years and 11 months (1,079 days, July 2014 to June 2017).

This is the first article in a series exploring how long it takes to build in New York City. Stay tuned for more.