The construction phase of the Standard New York, André Balazs’s 330-room hotel near the High Line in the meatpacking district, is well on its way to completion. Just don’t call it “boutique.”

“I don’t consider it a true boutique hotel,” Mr. Balazs, also the developer of the Mercer in SoHo and Hotel QT in Times Square, said. “The term has been bastardized. What’s happened is that anything with a unique point of view is being called boutique.”

Mr. Balazs is an atypical voice among scores of downtown developers who are trading banal office space and residential development for the cachet of the boutique hotel, now the city’s most fashionable real estate endeavor.

More than a dozen such properties are being constructed downtown, an area long perceived as a tourism backwater for hotel development compared with Midtown’s bees-to-honey draw for both vacationers and business travelers.

But these so-called lifestyle hotels, traditionally known for their independent owners, less than 150-room capacities, high room rates, and upscale, minimalist design, are sprouting up virtually everywhere. With more than 100 new hotels and an additional 13,000 new and renovated rooms flooding the market citywide through 2010, what is most striking, analysts say, is that approximately 20% of all new or renovated hotels citywide are boutiques.

Rates at such hotels can run from $260 for a standard size to upward of $5,000 a night for a duplex. Frequently doubling as nightlife destinations, they boast amenities like heated rooftop swimming pools, 450-square-foot rooms, and high ceilings. According to Smith Travel Research, there are now 45 boutique hotels in New York City. In 2006, the average daily rate was $309.53.

Turning more often than not to sites below 34th Street, developers are eyeing smaller parcels with hotel-friendly zoning in a market with fewer large sites and lagging condo sales.

“As long as there’s high demand, it will remain a strong investment,” a principal of Pomeranc Group, Jason Pomeranc, said.

With his two brothers, Larry and Michael, Mr. Pomeranc is building two hotel-condo hybrids below Houston Street and a 90-room hotel in Columbus Circle. He already runs a boutique hotel in SoHo, 60 Thompson. “In certain markets, the condo was the only thing that surpassed that, but people are wary of that now,” he said.

Last year, some 44 million tourists in the city chose from a paltry 72,150 hotel rooms with an occupancy rate hovering around 88% from April to November. With the frenzy for beds expected at least through this year, building a boutique hotel is often the most lucrative and best use for a particular property, maximizing dollar-persquare-footage revenue, developers and hotel industry analysts say.

Since these properties generally do not yield the same profits as office space and residential developments and often involve more painstakingly detailed work, developers of boutique hotels say they have a higher calling.

“Young entrepreneurs and real estate developers who 15 years ago would have thought, ‘I’m not going into the hotel business because the returns are better in the office business, and why spend all that brain energy’ are now willing to accept slightly lower returns and sweat it because the sector has become glamorous,” Mr. Balazs said. “You have to do it out of some passion.”

In Manhattan, real estate and hospitality industry analysts say many boutique hotels are being built on small sites that are ripe for conversion and require minimal infrastructure investment.

“Larger sites in this market have recently continued to be tagged for residential or office development, and large sites that could support hotels provide greater value to developers as residential or office development,” the managing director and industry leader of the hospitality and gaming group at Cushman & Wakefield, Eric Lewis, said.

Benefiting from greater flexibility with zoning, these hotels often are located in less central, manufacturing-friendly areas where residential development is not permitted and where office space is not desirable.

According to Mr. Lewis, boutique hotels, depending on the property, can capture as much as 50% to 100% more in average room rates than their limited service counterparts, bringing in operating incomes of approximately $40,000 a room every year compared to about $25,000 for limited service hotels and about $60,000 for luxury ones. For developers, the result can be a bottom line that is between 20% and 25% higher.

Experts say new downtown boutique developments such as the Bowery Hotel, with their lack of ballrooms, super-size conference centers, and off-the-beaten-track locations, aren’t always well-positioned to fill the void of now-offline luxury gems such as the Plaza and the Stanhope.

“They can attract $400 or $500 a night if they do a nice job and the location is reasonably nice,” the chairman of the real estate practice at Greenberg Traurig, Robert Ivanhoe, said. “But I think it’s going to be difficult to get business travelers to go the Lower East Side. The only way that’s going to happen is if the rates go through the roof even more on the other hotels.”

Mr. Ivanhoe said hotels, unlike office buildings and residential units, which lock in rents, are risky because every night is a new lease.

Developers say they agree. “There’s definitely a greater degree of risk,” Mr. Pomeranc said. “The thing about hotels that people forget is that you’re starting from zero every day. If things are good, there’s an instantaneous return. But if things aren’t, then you need to fill those rooms without any degree of security that you would have with long-term retail or commercial leases. Or even residential. It’s a day-to-day contract.”

Reports of boutique hotel failures are scant, but in the rare instance that the public does not take to such a property, the hotel can be converted to a different use.

“In a market like New York, if for some reason it doesn’t work, it could conceivably go to residential if zoning permits. It could reverse to a nationally affiliated property depending on location and quality of the physical building,” Mr. Lewis said.

Hotelier Ian Schrager is widely credited with introducing the boutique hotel to America in 1984 with the opening of Morgans on Madison Avenue, though small, independent, and upscale hotels like the Buckingham in Midtown have long existed. With the recent renovation of the Gramercy Park Hotel, Mr. Schrager remains active in this niche sector.

Big hotel chains are now seizing on the boutique trend. Starwood Hotels & Resorts, which operates Sheraton Hotels, is now constructing a W in Lower Manhattan. Aloft, its select-service brand, will open in Harlem and downtown Brooklyn. A Courtyard Marriott at Fifth Avenue and 40th Street is calling itself boutique. And the McSam Hotel Group, which now is constructing more than 3,000 hotel rooms citywide, partnered with Hersha Hospitality to build the 45-room Duane Street Hotel.

According to an architect for the McSam Group, Gene Kaufman of Gene Kaufman Architects, the hotel features a quarry-extracted limestone façade, 60- to 70-squarefoot glass windows, 13-foot ceilings, and glass-paneled showers.

“The guests in this kind of hotel are looking for an atypical experience,” Mr. Kaufman said. “We want someone who will go home and, instead of talking about the Broadway show, will say, ‘I went to New York and you wouldn’t believe the hotel bathroom.'”