Friday, October 2, 2015

NY Developer Considers Modular for Next Commercial Project

Commercial real estate developer Prime Cos. is considering an unconventional approach for building a large, upscale apartment complex in the Albany, New York, area: Modular construction.

The firm might rely on a Canadian manufacturer to assemble and ship the buildings that will make up the new, 165-unit Hudson Square apartments near the Van Schaick Country Club in Cohoes, NY.

The apartment buildings would be unloaded by crane, set in place, and then furnished. The process is similar to how modular homes are delivered and installed.

"Once the building is up, no one would ever know it's a modular unit," said Todd Curley, vice president and principal at Prime Cos.

There are two reasons why Curley and Prime Cos. President Ken Raymond are seriously considering modular instead of traditional, stick-built construction:

1. The value of the U.S. dollar vs. the Canadian dollar is higher than it has been in at least five years (today's exchange rate: $1 U.S. equals $1.33 Canadian). That would save on purchasing costs.

2. Labor costs would be higher for conventional construction, especially if Prime Cos. seeks a federal loan guarantee for Hudson Square apartments from the U.S. Department of Housing and Urban Development. The prevailing wages required under the federal Davis-Bacon Act increased "sizably" over the summer, Raymond said. "We can't really afford to pay the new wages that came out," Raymond said.

The percentage increase in the federal prevailing wage for projects in the Albany area was not immediately available. The rate is periodically revised by the U.S. Labor Department based on a survey of employers.
A Davis-Bacon rate sheet released in August by the Labor Department shows bricklayers doing residential construction in Albany County are paid $34.75 per hour in salary and benefits; electricians, $35.48; and structural ironworkers, $49.64.

From an article in the Albany Business Review

1 comment:

Anonymous said...

Doesn't it make you wonder what is wrong with the federal loan guarantee program that require prevailing wage on a job? It forces the developers and end users to have higher costs and strings out the time required for a return on investment. Yes, it makes the marketability of the modular building part more appealing, but the costs of such projects escalates tremendously versus market rate building. Makes no sense to me.