Mulling ModCon

NATIONAL REPORT – Parsing the state of modular construction is a bit like sussing a Picasso; best to start with the frame to get your bearings, then focus.

The “frame,” in this case, is hotel construction in general in the United States. March data released Thursday from CoStar/STR showed a downward shift (-7.5%) year-over-year for the third consecutive month in the number of hotel rooms under construction (144,760 rooms across 1,216 projects). That slide is cushioned, however, by a 10.9% increase in planning (representing 359,878 rooms) and a 3.7% boost (273,068 rooms) in final planning.

Commenting on the data, Isaac Collazo, senior director of analytics at STR, stated it wasn’t surprising fewer projects have broken ground, citing increased uncertainty and the potential for higher construction costs.

That potential could revive greater interest in modular construction for owners, developers and investors in the U.S., where the process was a hot topic last decade, fueled by signature projects such as the 21-story citizenM New York Bowery and 25-story AC Hotel by Marriott in the city’s NoMad district. Before long, other domestic metro areas were touting their ModCon hotels, with many projects carrying mega-chain and other brands.

Despite its surge in popularity, however, the process over the years has not resonated to the degree that the industry’s numbers-crunchers have carved it a niche. For example, ModCon doesn’t have its own lane within CoStar/STR’s construction data.

“Modular construction was becoming an interesting option for developers in 2019. As the pandemic took hold, it faded and has not truly restarted in any significant way in 2025,” said Bruce Ford, senior vice president and director of global business development of hotel real estate information aggregator Lodging Econometrics.

Noble Investment's Ben Brunt

Ford’s company, which reports data on hotel-construction stages, from early planning to opening, doesn’t have a slot for tracking ModCon projects either. “In 2025, it is unclear how many modular construction companies are producing hotel rooms in the United States,” Ford said. “The pipeline for such projects is nearly non-existent.”

A few pioneers

Not quite. One investor helping out that particular pipeline is Noble Investment Group, which is presently in development with its first modular construction project: a Marriott StudioRes in Greensboro, North Carolina.

“Our approach to modular construction is rooted in the same fundamentals that have guided Noble for decades: disciplined decision-making, thoughtful innovation and a focus on execution. For this project, the alignment of the Marriott StudioRes brand prototype, site logistics and project timeline made modular a compelling solution,” said Benjamin (Ben) Brunt, managing partner and chief investment officer.

Noble currently has 12 construction projects underway—it broke ground on seven StudioRes hotels in Q1— with 20 projects planned for this year and next.

The ModCon project is a four-story, 124-key, midscale, extended-stay property. Brunt explained the units are being constructed offsite in a controlled manufacturing facility. “Each fully outfitted guestroom is delivered to the site with all fixtures and finishes in place. Once on-site, modules are stacked floor by floor, significantly reducing vertical construction time. We anticipate a total timeline compression of four to six months, supporting earlier stabilization and a more efficient path to cash flow,” Brunt said.

In 2025, it is unclear how many modular construction companies are producing hotel rooms in the United States,” Ford said. “The pipeline for such projects is nearly non-existent.

Bruce Ford

Share this quote

“Modular construction enables us to reduce build time, manage labor availability, and improve cost certainty—important considerations in the current environment,” he added. ”The selected site, located in a high-growth submarket with strong demand drivers, also provided the logistical access and zoning flexibility required to support modular delivery.”

The Greensboro project also is the first StudioRes utilizing ModCon, and Brunt credited Noble’s longstanding relationship with the franchisor as key to moving it forward.

“As we explored modular construction for this project, Marriott was not only supportive, but they were also collaborative, recognizing the opportunity to scale the brand more efficiently. The Greensboro project reflects the shared confidence between Noble and Marriott in piloting innovative approaches that support thoughtful growth,” Brunt said.

Concord Hospitality Enterprises Co. also cut its ModCon teeth on a Marriott project, the five-story, 156-key AC Hotel Louisville Downtown (aka AC Hotel NULU for the city’s New Louisville District) in Kentucky. Carl Hren, Concord’s executive vice president of development, recalled the property, which opened in April 2018.

“[It] was a full modular project. It was assembled up in Pennsylvania and trucked to the site,” said Hren, noting the hotel, with a 196-space parking garage, was constructed in just under one year. “The time savings on the schedule was very impactful,” he said,

While the Louisville project has been Concord’s only involvement in ModCon since then—the property was acquired for $51 million by Apple Hospitality REIT in October 2022—the process is back on the company’s radar.

Concord Hospitality's Carl Hren

“We are looking at the possibility of building our future midscale, extended-stay hotels via modular,” Hren said. “These types of hotels are perfect for modular since they are so prototypical, and the room sizes work well.”

The EVP noted Concord executed on more than 10 new builds/conversions in the past year, and currently has eight such projects planned for this year and 2026. “We have three midscale, extended-stays breaking ground and one Aloft by Marriott in the next two months,” Hren added.

Best fits

Asked whether certain markets or hotel segments are a better fit for ModCon projects, LE’s Ford suggested, “Modular construction is really only for midscale and upscale projects, the rare exception being some economy projects.”

U.S.-based mega-chain Wyndham Hotels & Resorts will get to see how the latter plays out over the next decade with its Super 8 brand. The franchisor last week inked an agreement with Soliteight Hotel Projects SA for the Portugal-based hotel development/investment company to open 40 Super 8s across the Iberian market, marking the economy brand’s foray into Spain and Portugal.

Many of the hotels are slated to rise via modular construction. “[ModCon] for the brand is being driven by the developer for Super 8 in Spain and Portugal and isn’t something that’s Wyndham led,” clarified a Wyndham spokesperson.

Our approach to modular construction is rooted in the same fundamentals that have guided Noble for decades: disciplined decision-making, thoughtful innovation and a focus on execution. For this project, the alignment of the Marriott StudioRes brand prototype, site logistics and project timeline made modular a compelling solution.

Ben Brunt

Share this quote

Indeed, ModCon has been embraced to a greater degree and for a longer time in international markets, and is more common than in the U.S.

Efficiency—time, cost, labor—was the watchword during the past significant industry push toward ModCon, and had been getting some traction.

“In previous times, it was mostly about speed to get the project open and [the] labor savings of on-site scheduling for sub-contractors,” Ford said.

Now, said Concord’s Hrec, determining if ModCon is a good fit “has come down to costs. If the costs were brought very close to conventional costs, we would be building multiple projects modular.” He added: “Subcontractors price it higher than it should be because they are not familiar with it.”

That said, Noble’s Brunt felt the greatest value of modular construction lies in its ability to bring greater certainty to an increasingly complex development environment. “In a market where labor availability is inconsistent, material pricing remains dynamic and timelines are under pressure, modular allows us to mitigate risk across all three. By shifting key construction activities offsite, we reduce exposure to delays, compress schedules and improve cost predictability. For Noble, the benefit is clear: faster stabilization, earlier income generation and a more-efficient path to project completion,” he said.

“The improvement on the construction schedule and the quality assurance that you can gain by having all rooms built in the same warehouse are the majority of the incentive to go modular,” Hrec added.

Crucial components

The executives noted when opting for ModCon, monitoring the front end and the plan’s progression is critical.

We are looking at the possibility of building our future midscale, extended-stay hotels via modular. These types of hotels are perfect for modular since they are so prototypical, and the room sizes work well.

Carl Hren

Share this quote

“Modular construction requires a high degree of precision and alignment early in the development cycle,” Brunt explained. “Success is won or lost in the planning phase—design, procurement, entitlements, utilities and brand reviews must all be fully coordinated before manufacturing begins. Once production is underway, changes can be costly and difficult, making upfront execution critical.”

Hrec concurred: “There can be big change orders and schedule delays if the general contractor does not coordinate and run the project properly.”

As a strategic investor, Noble is monitoring three key factors: adherence to schedule, cost performance versus traditional construction and guest experience. “If the product delivers as expected in these areas, modular has the potential to become a scalable solution within Noble’s long-term, extended-stay development platform,” Brunt said.

Given the economy, whether ModCon will become more prevalent as an option for those owners/investors who want to keep growing at a steady pace remains unclear.

“When construction-starts begin to accelerate again in the future, there is a good chance that modular will become popular again,” Ford said, “but the near term seems challenged.”

Still, what the picture looks like apparently depends on where you’re standing.

“I do believe that the costs will eventually get in line, and we will be building multiple hotels modular,” Hrec said. “It just comes down to when will we be able to get the costs right?”

With more than 60 investments in the pipeline, Brunt indicated Noble’s outlook was positive. “Modular is not a silver bullet, but it’s a powerful tool, particularly in markets where speed and cost control matter most. Early indicators are promising, and we see a clear path to scaling modular across future developments in this sector.”