From the Full Story below, one could always make a joke about NYC parking spaces being slightly smaller than the average hotel room and only slightly more expensive. As the article notes, OTO Development is looking to cast aside the jokes and get to work on their second site in the city. After purchasing a low slung parking garage, the OTO team is planning to redevelop the site into a hotel. Known for budget brands like Hampton Inn and Hilton Garden Suite, OTO is likely to try to squeeze every last inch of development rights from the site.
At Cubed Advisory, we have done some back of the napkin math and figure that OTO is going to have to squeeze hard after paying a not unreasonable $361/sf buildable for the land.
With a buildable area around 99540sf and a likely development cost of around $850/sf, the overall project cost is around $120.5M. With budget hotels averaging 350sf/per room across the building, that is a per room development cost of $422k.
If OTO were to bring the per room development cost down to a more reasonable $375k-380k per room, they would be looking at room sizes of 319sf. This would require a hotel with very small rooms and/or no real amenities.
It is also happens to be twice the size of an average parking space.
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Labels: development, hotels, OTO Development