There’s a “not so” new class of properties in New York and it’s growing faster than ever. As we all know, extended-stay, corporate or short-term (temp) housing offers the convenience and amenities of hotel or furnished apartment living without the need to sign a full-year lease.
What’s really surprising though is that in the last few years, there have been between 3200 and 4000 non-hotel units built in Manhattan, and the number is expected to increase this year. In addition, hotel units have been growing more steadily with 9309 last year in the New York metropolitan area compared to 8330 in 2009. Almost 2000 are currently under construction.
Although the majority of the above-mentioned hotel units are outside Manhattan, the borough’s growth spurt is largely due to a single property: the Marriott Courtyard Residence Inn, Manhattan Central Park.
The 68-storey skyscraper opened in the winter of 2013 at Broadway and West 54th. Reportedly the tallest single-purpose hotel in the Western Hemisphere, it boasts 639 rooms. Of those, 261 are “extended-stay” and offer discounts of 20% on the $350+ per night rate.
Similar properties, such as the Sutton Court Hotel Residences on East 57th Street are exclusively reserved for long-term guests. The hotel has dispensed with daily housekeeping; residents prefer their privacy. The rooms are twice as large as traditional hotel rooms and cost about $200 per night.
More and more extended-stay patrons go far beyond employees in town for training programs or short term assignments, they include recently separated spouses, homeowners whose homes are under renovation, medical patients and their visiting families and, increasingly, people involved in the film industry.
To serve the latter, AKA has developed four upscale extended-stay properties since 2004. A fifth at 84 William Street in the financial district is scheduled to open in 2015. It will include 136 units, a café and a restaurant.
According to Bradley J. Korman, Co-chief Executive, these properties require only a staff of 25 compared to about five times that at a hotel. He says keeping such overhead costs low is the key to producing the revenue of a hotel with the expense structure of an apartment building. It’s difficult, but profitable.
Hotel/apartment hybrids aren’t new. They were created during Prohibition in the 1920s to skirt the ban on bars. In the 1980s, the Hotel Taft was redeveloped on 7th Avenue and West 51st. Developers sold units to investors who subsequently marketed them as corporate rentals.
The trend continues with offerings from Empire State, Oakwood where studios at its newest property, the 43-unit Nash on East 39th, start at $150 a night. Silverstein Properties recently added 100 more extended-stay units to its base of 106 at the company’s Silver Towers complex.
Along with several partners, Silverstein Properties is currently updating he historic Beekman Tower Hotel with an infusion of $25 million. The property will include a business center and is located near the United Nations.
Forty units were made available in February. From studios to 2-bedroom units, prices start at $199 per day. The remaining 140 planned units are to be available in May.