Friday, January 1, 2021

Off-Site Construction Industry Has More Than It's Share of Failures

The recent news of Katerra receiving a $200,000,000 cash infusion to save it from bankruptcy is just the tip of the iceberg for Modular and Off-Site construction. Throughout the last 15 years, we have seen some of the biggest names in modular and off-site either close their doors or scale back their production to the point of being almost irrelevant.

After the housing crash of 2008, dozens of modular and off-site factories filed for bankruptcy or simply closed their doors. Tough times for the housing industry. However, it wasn't all bad. A couple of new companies began to make their presence known as new startups. 

One of those was Blu Homes. Their story of building folding homes, getting huge investments in the tens of millions, holding Wine and Cheese Open Houses, adding new divisions like their own Architectural firm and finally a factory, made them media sweethearts. Even though Blu Homes still has a very small presence in Northern California, almost all that investment money was lost along with their factory, which is now owned by Factory OS.

Skender was another company that opened a modular factory in Chicago, got a ton of investment money and before they even completed a single project were forced to close their doors. There are many different stories about why they closed but it all boiled down to not getting enough investment money to feed the machine.

Now we have Katerra bleeding investor's money and continuing to get more. Part of that huge new investment also included forgiveness of over $400,000,000 in debt. That puts the latest investment value at over $600,000,000.

Nobody in the off-site construction industry wants to see them fail as it would give our industry a black eye but honestly, if you got over $2B in investment money and you still haven't figured out what you want to be when you grow up, maybe you shouldn't have been in the business to begin with.

Gary Fleisher, the Modcoach, writes Modcoach News and Modular Home Coach blogs as well as the best site for off-site consultants, Modcoach Connects

Contact Gary at modcoach@gmail.com

1 comment:

Unknown said...

Katerra is an epic failure, all because tech guys thought they could get lucky twice in their life jumping into something they knew nothing about and getting lucky doing it.....but this time they got bit by the lack of knowledge of what they were really getting into. Credit their marketing and PR team for pulling the wool over the eyes of everyone looking at this company.... and computer animation of projects they never really built to sell this dog...and now the last $600M will be swallowed up covering the stock the execs will walk away with, and 500 more folks will be out of jobs.