In an era where housing affordability is a growing concern and construction costs continue to rise, the real estate industry is increasingly turning to modular construction as a solution. This innovative approach, which involves building structural components in a factory and assembling them on-site, is gaining momentum in the United States. Greystar Real Estate Partners LLC has recently joined the ranks of pioneers with the opening of Ltd. Findlay, its first modular apartment community, in Coraopolis, Pennsylvania. This milestone underscores the potential of modular construction to revolutionize housing development.
Speed, Efficiency, and Sustainability
The Ltd. Findlay project consists of 312 units within six buildings, offering one-, two-, and three-bedroom layouts ranging from 662 to 1,373 square feet. While the completed buildings resemble traditional garden-style multifamily developments, the underlying construction method is anything but conventional. Each apartment is comprised of two to four modules and was built in Greystar’s Modern Living Solutions (MLS) factory in Knox, Pennsylvania. These modules are transported to the site and assembled into fully functional units.
“This allows us to deliver an attainable product that is also more sustainable due to reduced construction waste,” said Andy Mest, managing director of development for MLS at Greystar. Mest, who previously spearheaded Greystar’s modular efforts in Europe, highlighted that the Ltd. Findlay project was completed roughly 40% faster and 10% cheaper than a comparable traditional multifamily project. Moreover, on-site construction required only a third of the usual workforce and generated 90% less waste.
These efficiencies align with broader industry trends and demands. The Modular Building Institute reports that the annual market share of modular construction in the U.S. has more than tripled over the past decade, reaching 6.6%. With a persistent shortage of skilled construction labor, modular construction is increasingly viewed as a viable path forward. According to the McKinsey Global Institute, global revenues from modular construction could soar from $180 billion in 2022 to as much as $1.1 trillion by 2040.
Meeting Affordability and Lifestyle Needs
At Ltd. Findlay, modular construction also supports affordability. Rents are lower than those of traditional multifamily housing in the area, making it an attractive option for renters seeking quality housing at a reasonable price. Unlike many attainable housing options in the United States, Ltd. Findlay goes a step further by incorporating modern amenities such as property-wide high-speed internet, smart locks, and resident apps for streamlined maintenance requests and guest access. Community amenities include a pool and fitness center, further elevating the living experience.
The combination of lower rents and premium features highlights the potential of modular construction to address the housing affordability crisis without sacrificing quality or modern conveniences. “We believe that modular construction allows us to deliver not just housing but homes that people want to live in,” Mest said.
Challenges to Adoption
While the benefits of modular construction are compelling, the method is not without its challenges. The cost of transporting prefabricated pieces to the construction site can be significant, especially for projects located far from manufacturing facilities. Financing modular projects can also be difficult, as lenders are often less familiar with this approach and may view it as riskier than traditional methods. Additionally, regulatory approvals can pose hurdles, as building codes and permitting processes in many jurisdictions are not yet optimized for modular construction.
Despite these obstacles, major developers are exploring modular strategies. Companies, like Related, Amherst, and even hospitality giant Marriott, have experimented with modular construction, signaling its growing acceptance across different sectors. Marriott, for instance, has used modular techniques to build some of its hotels, leveraging the speed and efficiency of prefabrication to accelerate project timelines.
A Global Perspective
The growing interest in modular construction is not confined to the United States. In Europe, modular construction has gained substantial traction, particularly for projects focused on affordability and sustainability. Andy Mest’s experience with modular developments in Europe has undoubtedly informed Greystar’s U.S. initiatives, showcasing the potential for cross-continental learning and innovation in this space.
Globally, the modular construction industry is poised for remarkable growth. McKinsey’s projections underscore the sector’s potential to address critical housing shortages while driving down costs and environmental impact. The scalability of modular techniques makes it an attractive option for tackling the dual challenges of urbanization and affordability in markets around the world.
The Future of Modular Construction
As the demand for housing continues to rise, developers are under pressure to find solutions that balance cost, speed, and quality. Modular construction, with its ability to deliver projects faster, cheaper, and more sustainably, is increasingly seen as a critical tool in the development arsenal. However, for modular to realize its full potential, the industry must overcome the challenges of transportation, financing, and regulatory alignment.
The opening of Ltd. Findlay is a testament to the progress being made. By demonstrating the feasibility and benefits of modular construction on a large scale, Greystar is paving the way for wider adoption of this innovative approach. As more developers, lenders, and regulators embrace modular strategies, the method could play a pivotal role in reshaping the housing landscape in the United States and beyond.
With its promise of speed, efficiency, and sustainability, modular construction offers a glimpse into the future of housing development. As the sector matures, it has the potential to not only alleviate the housing affordability crisis but also redefine how homes and communities are built, making it an exciting frontier in real estate development.
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