The continuing shortage of skilled labor will further strengthen demand for modular construction in 2017
By Lad Dawson
Modular construction—the process of constructing a building off-site using efficient assembly-line production methods—has evolved far beyond the techniques used to manufacture the mobile homes that first brought the concept to most people’s attention. Today, modular buildings are built to the same codes and standards as conventionally constructed buildings and feature top-quality materials and luxury finishes. Once the modular units are assembled on-site, a modular building is indistinguishable from a traditionally constructed one.
Consistent high quality is ensured through cutting-edge production processes, experienced personnel with specialized skills, and careful inspections at every stage. Depending on the design and the specific project, modular buildings are generally completed 60 to 90 percent off-site, with multiple individual modules then assembled to create larger structures. While we specialize in three-to-five story structures, modular skyscrapers are becoming more common in other parts of the world.
Speed is the most obvious benefit of modular construction. The modular units can be built while the site work is being completed and the foundation prepared. This significantly compresses project timelines, along with the fact that the controlled factory conditions eliminate weather-related delays, labor issues, and many other potential interruptions for major portions of each project.
Modular construction also decreases the financing risk, risk of worker injury, and noise and site disruption. Modular building is also more sustainable, as assembly-line production dramatically decreases material waste and allows for the consistent incorporation of energy-efficient and eco-friendly materials and components.
The more efficient production process reduces the cost of construction and, perhaps even more importantly, makes costs more predictable. Budget certainty is—along with speed—one of the key advantages for developers.
Although much of the discussion of modular building centers on single-family homes, more and more large-scale commercial projects such as hotels, assisted living facilities, and multifamily housing projects are benefiting from the efficiency and cost control of modular construction.
Modular multi-family projects are proving particularly popular in areas with high housing costs, such as the Puget Sound and the San Francisco Bay Area. One example of a successful multi-family project is Domain Apartments in San Jose, California, which began production in May 2012. This award-winning development comprises five four-story buildings containing 431 modular residential units manufactured by Guerdon Modular Buildings. The project team chose high-end features to help attract and retain residents, and the modular units arrived from the factory with 9-foot ceilings, granite countertops, stainless steel appliances, and washers and dryers already installed.
The fast-track construction schedule and a phased occupation strategy allowed the developer, Equity Residential, to get a jump on market demand. The first building was occupied within a year of the start of production, and the other four were available for leasing within the next six months. Modular construction enabled the developer to complete the project nine months earlier than traditional building methods would have allowed and to achieve lease stabilization a full year sooner than would otherwise have been possible.
Another, more recent, modular multifamily development is the Union Flats project developed by Windflower Properties in Union City, California. This sustainable (LEED Platinum) project includes 243 residential apartments and 2,400 square feet of retail space spanning two four-story buildings in the city’s Station District. Union Flats is using 408 modular units built in Guerdon’s factory in Boise, Idaho. Like Domain Apartments, Union Flats will offer upscale amenities, including a pool and spa, a fitness area, and an outdoor entertainment space.
Union Flats is scheduled for completion in spring 2017—a full year sooner than would have been possible with on-site construction. The speed was critical, as the project had an extremely tight timeline. Thanks to the success of the first phase—Windflower’s first experience with modular construction—the developer is planning to use the technology again in the second phase.
Modular building methods are moving into the mainstream as more developers embrace the approach and as household names embark on modular projects—for example Yale University building modular student housing, Google proposing modular components in its new headquarters, and hotel giants Hilton and Marriott building modular hotels.
In 2017, the continuing shortage of skilled labor in some areas, as well as the higher labor costs involved in on-site construction, will further strengthen demand for modular construction. Areas with acute housing shortages will see particularly high levels of adoption, as developers seek to meet the demand as quickly as possible. And as more developers work with the technology, they will come to appreciate the greater control that the process offers, thanks to assured time frames, fixed costs and consistent product quality.
Lad Dawson is the CEO of Guerdon Enterprises LLC. Dawson started the company in 2001 to make factory technology the mainstream building method for modular residential and commercial construction projects. Guerdon now builds some of the largest modular construction projects in the Western United States and Canada. He may be reached at www.guerdonmodularbuildings.com.