Both. The pipes are full of cold water that has to be flushed out first. The further the pipes are from the water heater the more water to flush out. The pipes also act as a heat sink for the hot water traveling through them. The amount of heat lost to the pipes is a function of material, length, whether or not it is insulated, etc.
Eventually the pipe will heat up to the temperature of the water at which point the air around the pipes becomes a heat sink. This is where insulation helps retain the heat. Not usually a problem for domestic water applications but the pipes in a power plant are insulated to retain as much heat ($$$) as possible.
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