August 8th, 2013
Opportunities in Modular Buildings
The concept of modular buildings has caught our attention of late. The beginning of a recovery is a time when building is taking place again but stakeholders are being very careful with their resources. Modular building fits well into that theme. By replacing expensive field labor with less expensive plant labor, modular buildings are less expensive to build than their “stick-built” counterparts. They also require a fraction of the time to erect onsite. Throw in the quality control benefits of building the modules in an enclosed environment with factory-like precision and modular building becomes a very interesting concept.
The modular building industry has changed immensely during the last 10 years. Modular building in the past was primarily used on detached single-family homes. Now, however, the modular industry has come to include attached multi-family dwellings and even mid-rise residential units. A building called B2, a 32-story modular tower, is slated to be built in Brooklyn’s Atlantic Yards. When completed, it will be the tallest modular building in the world.
Another application of modular building techniques is in the so-called micro-unit apartment segment. In areas like New York City, where housing is extremely unaffordable, such micro-unit buildings are bringing a city home within reach of more people. A recent design competition resulted in the selection of a 10-story micro-unit structure, which will be built sometime before 2015. This building will become the first multi-unit building in Manhattan to be constructed using modular techniques.
Still another interesting application for modular building can be found among beachfront homes. These units are compact yet comfortable and within the price range of a broad cross-section of the public. They are also being billed as hurricane-proof. Indeed, such modular beachfront units made it through Hurricane Sandy without a dent. Like many of you, when we hear “hurricane-proof” we hear “high margin.” While some of the low-income applications for modular housing that are being explored do not hold much promise of profit, these metropolitan mid-rise and beachfront modular buildings are worth at least considering.
When we first began to focus on the door and window industry in 2006, we wondered why more companies didn’t focus on multi-family housing. The most common response was, “The builders pay too slowly.” During the downturn, multi-family projects saved some companies. Perhaps the door and window manufacturers that are early in exploring the modular building segment that is the right fit for their product offering and price points will be the similar beneficiaries of the growing trend toward modular building.