Extended stay leases a lucrative niche market.

Extended-stay lodging has emerged as one of the hottest areas in the hospitality business. A hybrid that combines the comfort of an apartment and the covenience of a hotel without the attendant costs, extended-stay lodging is becoming the preferred choice of executives on lengthy business trips. The demand for these interim accommodations is driven by corporate downsizing, the evolution of the contingent-based workforce, and the explosion of e-commerce and web-based applications.

The increased demand from corporations for short-term rentals has left Manhattan with a critical shortage of affordable extended-stay accommodations. To meet the demand, developers have turned to renovating commercial as well as rental buildings, or constructing new facilities. We expect that the number of extended-stay corporate-style apartments in Manhattan will double this year.

As a developer and manager of extended-stay corporate apartments, we are in the business-of relocating executives, consultants, transferees and diplomats to luxury corporate apartments in Manhattan's finest buildings. We recently conducted a survey to find out how often corporations use short-term accommodations, what amenities they expect, and how much they are willing to pay.

Eighty percent of the major New York City corporations provide short-term housing for their employees sometime during the year. Some accommodate as many as 10 people per night, although it averages one or two per night.

More than 50 percent of the corporations we asked relocate at least 10 executive or managerial level employees annually. In the case of new hires, half of the corporations relocate about 10 employees to Manhattan each year.

Who uses these lodgings? According to the survey, transfers represent 67 percent of the executives who utilize these accommodations, although the lodging is also available to consultants and new hires.

As for amenities, one-half want maid service, while two out of five require voice mail or on-premise health facilities. One out of four is looking for Internet access.

Sixty-seven percent stated the principal benefit for leasing interim apartments is cost. Interestingly, 52 percent indicated that administrative convenience was a major factor.

To contain costs, 85 percent of corporations hold leases on furnished apartments. However, corporations frequently have more demand for interim housing than they have supply. To fill in the gap, about 40 percent regularly outsource the service to extended-stay specialists.

When corporations were asked how much were they willing to pay for these apartments, the response was $3,400 for a one-bedroom to $5,100 for a two-bedroom.

There are three other advantages for corporations to lease apartments on a short-term basis. First, the corporation has full control of logistics, which include reservations, apartment inventory, utility costs, cleaning, etc. Second, the corporate apartment is 34 to 40 percent less expensive than an extended-stay hotel. Third, most corporations use a professional manager to manage the apartment, eliminating the need to hire additional staff.

And let's not forget location, location, location. When selecting rental units for their employees, corporations see proximity to the Financial District of prime importance. We recently developed a new short-term luxury rental building at 56 Pine Street. Called The Cambridge Club, the building will feature 78 luxury rentals. It is the first building in Manhattan fully designated for corporate furnished apartments. Scheduled to open in March the property boasts 28 studios, 43 one-bedrooms and several large loft studios. Starting prices for studios and one-bedroom units start at $2,550 and $3,900 per month. By comparison, the cost for a hotel room is $200 or $300 per night and higher.

The amenities being offered meet the wish list of most relocating executives. They include a fitness center, a business center, 24-hour concierge, weekly maid service, high-speed Internet access and wiring for at least four telephones lines.

As a specialist in extended-stay market, Joseph Gregory supplies 65,000 nights of quality furnished corporate apartments annually and provides a full complement of management services to corporations with leased apartments. We are currently negotiating several major deals that will bring additional luxury corporate accommodations on-line to meet the continued demand for these lodgings.