Modular construction Q&As

modular construction

Big tech firms like Google and Amazon are joining the fight in search of a permenant solution for affordable housing, a pressing issue for the real estate industry. As a promising answer for the crisis, modular construction is being chosen increasingly by developers because of its higher degree of quality, cost and schedule certainty. Here are some Q&As that I compiled based on my conservation with industry veteran, Doug Phil, CEO of Prefab Logic, a 2019 report by the consulting firm McKinsey & Co. and my own experience.


1. What is Modular Construction?

A process in which building modules (often with MEP, fixtures and finishes) are prefabricated off-site in a factory, and delivered and installed on site. Foundations, podiums, horizontals, roof and central plants are typically completed by the on-site GC. The MEP components of the modules are usually terminated in a common corridor and will be finally tied into the building central plants by the on-site GC.

2. What is the market share of Modular Construction among all construction methods?

5%

3. What is the typical cost saving from Modular Construction?

20% or more

4. What is the typical schedule saving?

Up to 50%

5. Does modular construction make sense to your development

100 units or more development makes most sense, 50-100 units on a case-by-case basis, 50 units or less may not make sense in terms of cost.

6. How much does it roughly cost?

$180/SF, including fabrication, delivery and installation.

7. Who are the leading tech-driven players in modular construction?

Factory OS, Sustainable Living Innovations (SLI), etc.

8. What are the prominent developments using modular construction in the US?

461 Dean in Brooklyn, NY, and CitizenM Bowery Hotel and AC Hotel NoMad in Manhattan, NY

9. What are the biggest challenges for modular construction?

Untested in taller and larger development, limited variety in architectural design, coordination between manufacturer and architect/engineers/GC, and approval by local authorities.

10. Is it possible to achieve Net-Zero emission in buildings using Modular Construction?

Yes

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