Friday, October 30, 2020

Commercial Developer Says "Stop Building Modular Projects Bass Ackwards!"

Modular construction has been gaining popularity for years for its potential to compress construction timelines, lower project costs and shrink the environmental footprint of putting up a new building. But even as developers unveil modular projects in some of the nation’s largest cities, industry veterans believe we’ve been going about the process all wrong.

“In many cases, modular construction has not made good on its promises,” said Justin Stewart, CEO of Synergy Construction, a Seattle-based general contractor. “We’ve spent six years and considerable resources flying around the country to meet with modular suppliers and view projects in person to identify why so many of them go awry.”

Stewart’s conclusion was that developers are looking through the wrong end of the telescope, and thinking about modular construction completely backward, right from the pro forma. By reversing the way it thinks about modular projects, the industry can actually achieve the kind of savings and progress that modular promises.

When sourcing a typical residential project, Stewart said, developers will consider their job site and the zoning restrictions on height and floor area to give them their net rentable square footage. Then they multiply that number by local market rent, giving them their maximum possible revenue for the site. Lastly, the developer will hand the project off to architects, who are tasked with slicing and dicing up the proposed property into apartment units that can help the developer reach that maximum revenue. 

Only once an architect has completed a massing proposal for the new building will developers ask themselves whether they can build the project more efficiently with modular building techniques.

Related Article: What Every Architect and Developer Needs to Know About Modular Construction

“At that point, you’ve already wiped out so much of the value of doing modular construction,” Stewart said. “If you start instead with optimized modular units and floor plans that make sense, you can make projects that are more sustainable, more affordable, where tenants actually want to live.”

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3 comments:

VM said...

The Title of the article is wrong.
Modular Construction is a very wise decision when building.
Sounds like this article is more related to price per square foot of return on your investment.
Not sure if the point trying to get across has anything to do with the actual mechanics of Modular construction. Interesting concept to be for or against the performance of Modular.

Frank M (developer) said...

Gary, the title is perfect. VM is correct about ROI being the reason for going modular or not. The article states that Architects being involved in a project without first looking into what way the project is built, site or modular, the chances of choosing modular are lessened.
It's not a matter of being for or against modular. It's a matter of having each priced fairly on their own merits and by people that know each method.
And no, the article is not about the actual mechanics of modular. It's about the mechanics of a developer not having modular on the table from the onset.

VM said...

Frank
Just need to educate the Architect ..
The article stated “ backwards on the process “
One would do his due diligence with All vendors and subs involved before getting “ backwards in any project.
Vern Miller / owner
Tennessee Modular