Modular Building is Gaining in Popularity Over the Past Two Years…

May 10, 2019

“…but only when the tide goes out do you discover who has been swimming naked.” 

–Warren Buffet

The increasing use of relatively capital-intensive, modular prefabricated construction approaches by Skender, DPR, and others is being driven by growing labor shortages in construction and the desire of owners to build faster. However, I remain concerned about the significant levels of investment required for most firms’ current approaches to modular building construction in what has always been a highly cyclical —and hence capital-light— industry.

For that reason, I continue to favor Industry 4.0 approaches in which the design-builder, plays the role of a system integrator and develops modular design elements. Additionally there is now software to make it easy for architects to design flexibly, allowing for the outsourcing of the manufacturing to large, diversified producers that can build modular elements. This diversified producer can produce for construction and also serve other industries, while being a key participant outsourcing in construction as contractors move to play the role of assemblers.

I see companies like Bone Structure and Project Frog following this Industry 4.0 approach and look forward to continuing to watch the evolution of our industry.

Dr. Raymond Levitt

Operating Partner, Blackhorn Ventures