Developer Brad Wagstaff plans to start building a 354-room Marriott hotel in Hawthorne next month and finish construction within nine months. That’s about twice as fast as his typical hotel projects, a pace that will put him in line to collect an extra $5 million in revenue.
The speedy time line is possible thanks to modular construction, a method that Marriott International Inc., based in Bethesda, Md., is touting as a way for developers to save time and turn profits faster, especially in Los Angeles and other markets where the labor pool is tight and construction costs are rising.
“There are a few markets where modular really makes sense – markets where construction costs are high, like Los Angeles,” said Wagstaff, who has built three hotels in Redondo Beach over the past few years using traditional “stick-built” construction.
Modular means “the build time is shorter, and we pick up a lot of extra revenue because we can get it open earlier,” he said.
Modular construction has been used in commercial sectors since the 1960s, but the practice remains relatively rare for hotels, according to the Modular Building Institute in Charlottesville, Va.
Marriott’s projects could encourage wider adoption, said Tom Hardiman, the institute’s executive director.
“(The stance on modular) is quickly changing with Marriott’s recent announcement,” he said via email. “We are seeing more owners and developers embrace modular construction primarily to see a quicker return on investment due to a shortened overall construction schedule.”
Modular techniques are used on 3 percent of new construction projects in North America right now, according to Hardiman, who expects that share to nearly double to 5 percent or 6 percent over the next several years with a pickup in the hotel industry.
Wagstaff, managing partner of Mogul Capital in Midway, Utah, said he learned about modular construction at a Marriott conference for hotel owners a year ago and was impressed by the quality of modules on display.
The Hawthorne project at Hawthorne and El Segundo boulevards, set to operate under Marriott’s TownePlace Suites and Courtyard brands, will cost an estimated $73 million in total – about the same amount Wagman would spend on traditional construction but without the time lag. His plan is to begin stacking modules in October and open in February or March.
“The costs are roughly the same, so to pick up the higher quality and open eight to 10 months earlier are the main reasons that we’re going modular,” he said.
Other Marriott developers also are starting to seize these benefits. The hotel company said it expects to sign deals this year with franchisees on 50 projects in North America that would use prefabricated rooms or bathrooms. Those ventures would represent about 10 percent of hotels planned under Marriott’s Select Brands umbrella – about 10 brands including TownePlace and Courtyard that lend themselves to modular construction because most of the rooms are the same size and style.
The modular style calls for the construction of hotel rooms and bathrooms by a manufacturing company. Guerdon Modular Buildings in Boise, Idaho, approved by Marriott as a partner for franchisees, is slated to work on the Hawthorne hotel. The units are then delivered to construction sites, where cranes stack them into place over a foundation.
Construction crews install electrical and plumbing components, and the building is essentially done. Time-consuming processes such as installing carpets, furniture, and finishes – are taken care of before the modules are delivered.
Marriott began looking into modular construction in 2014, seeking ways for developers to offset the rising costs of construction given constraints in the labor pool.
“Our push was to move the industry to it on a wider basis, so all these individuals don’t have to do it on their own, so we can build a systematized approach to doing this,” said Karim Khalifa, the company’s senior vice president of global design strategies.
Marriott opened its first hotel under the initiative last year in Folsom, but had already tested modular techniques in earlier projects such as the JW Marriott at downtown’s L.A. Live, whose bathrooms were built in a factory.
Khalifa said busy areas such as downtown are ideal for modular construction, because construction crews don’t need to close down streets for long periods of time and hold up traffic.
“Downtown L.A. is a great place to go, where you have so much congestion,” he said. “When you do modular, those guys load things in in a week or two, and then they’re gone.”
Architect Frank Vafaee, founder of home-parts designer and manufacturer Proto Homes in downtown, said the hotel industry is smart to latch on to modular construction because hotel rooms are typically the same size and design.
“In the same building, you may have 200 rooms that are perfectly identical,” he said. “In terms of mass production, mass delivery, standardized procedure, and protocol, it lends itself to that use perfectly well.”
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