Modular might be the future of construction

Construction Disruption

There’s no doubt that technology is creating a fair amount of disruption in the construction sector. Robotics, Augmented Reality even drones are being deployed in some construction projects and a $1 billion construction tech industry today is projected by some analysts to exceed $10 trillion by 2020.

But the biggest disruptor in the construction sector over the next 10 years might be one of the oldest ideas in the industry: modular construction.

Also called ‘prefabrication’ (or prefab), modular construction is the manufacture of buildings in a factory environment for assemblage on site. It’s an idea as old as the Romans and was even used during the Gold Rush when settlers purchased house ‘kits’ and had them shipped by rail from East Coast factories.

Prefab Sprouts

Modular construction is evident around the world today in iconic structures like the Eiffel Tower, which is made out of prefabricated iron assembled in Paris in 1899. And the archetypal modular building – the ‘mobile’ or manufactured home – is home to 1 in very 18 Americans, according to the Census Bureau.

Yet, even though prefabrication of buildings has been around for years, we are still in the early days of its use in commercial real estate development. But why is it taking off now?

Cheaper, Faster, Greener?

There are several reasons for the growing appeal of modular construction.  First, construction costs are at historic highs, especially in strong markets like San Francisco, Chicago, New York and Seattle. Modular units can be built to meet conventional construction codes less expensively.

Second, because these modules are assembled in a factory the construction timeline isn’t affected by weather or other onsite issues, making modular construction, on average, a faster building process.

There is also an argument to be made that modular building is more sustainable in the long term. Building modules in a controlled factory environment generates less waste and reduces the potential for moisture to be trapped in walls and construction materials. Modules can also be relocated and more efficiently reused.

Not for Everyone

Building modular is no panacea, however. This is a construction technique most suited to projects featuring identical units, such as apartments and hotels. Never say never, but office buildings, especially downtown towers, probably won’t be built in the factory in our lifetimes. Still, building modular can bring a higher degree of project certainty to some development opportunities and is something to be considered, especially in the Bay Area where in addition to the high cost of building development timelines can be long. That said, having a good project manager to oversee the entire process is a wise decision, especially for modular projects.