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    Home»Real Estate News»Why modular construction fits high-cost custom markets

    Why modular construction fits high-cost custom markets

    Team_WorldEstateUSABy Team_WorldEstateUSAMarch 25, 2026No Comments4 Mins Read
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    Modular and panelized building – usually positioned as a software to broaden the provision of inexpensive housing – can also be gaining traction within the luxurious, customized homebuilding market.

    At The SHIFT, a placemaking convention hosted by Tavistock Improvement Firm earlier this month in Orlando, Florida, Plant Prefab Founder and CEO Steve Glenn mentioned off-site strategies can assist builders ship bespoke houses quicker and with fewer on-site coordination points, particularly in high-cost, labor-constrained markets.

    Plant Prefab produces townhomes, pupil housing, residences and hospitality initiatives, however Glenn mentioned customized single-family houses in high-demand city and suburban neighborhoods and resort communities make up a large share of the corporate’s work.

    Why modular and panelized work effectively for customized homebuilding

    Plant Prefab, primarily based in California, makes use of each modular and panelized building. Glenn mentioned combining the 2 is a match for customized initiatives as a result of most of the locations the place luxurious houses are constructed have excessive labor prices and restricted expert trades.

    “There’s this unbelievable market discontinuity,” Glenn mentioned. “The locations the place customized initiatives are occurring — city infill, mountain dwelling communities and second-home communities — all share the identical traits of excessive land and labor prices and scarce labor.”

    Plant Prefab operates a 270,000-square-foot manufacturing facility at Tejon Ranch, California, that the corporate says can produce greater than 3 million sq. ft yearly. Every venture begins with an in depth digital manufacturing mannequin integrating architectural, structural and mechanical methods.

    That up-front coordination is designed to scale back on-site conflicts and materials waste. Plant Prefab’s newest company sustainability report says the method reduces waste per sq. foot of manufacturing by about 40%.

    Plant Prefab additionally factors to energy-efficient methods and fire-resistant supplies in its designs — positioning the corporate as a possible associate for rebuilding in fire-impacted elements of California.

    On the manufacturing facility, automated tools cuts, labels and assembles parts which can be then shipped to job websites. Glenn mentioned the flexibility to combine modular and panelized components helps the corporate hold initiatives custom-made whereas bettering predictability.

    Glenn mentioned modular building permits website work and fabrication to run in parallel, with potential schedule financial savings of 25% to 50%. However he added that modules can pressure design compromises on some builds, whereas panelized parts can supply extra flexibility.

    Plant Prefab works with builders and designers to regulate plans so they’re simpler to fabricate and assemble off-site, with out sacrificing the design intent, Glenn mentioned.

    Picture courtesy of Plant Prefab

    “There’ll all the time be a spot for architects in customized structure, significantly in cities, and we wish to make that extra environment friendly,” Glenn mentioned. “So we work with architects to consider methods to do their design in a method that displays their intent, however somewhat bit extra effectively.”

    Glenn additionally mentioned prefab can cut back surprises within the discipline and decrease the frequency of change orders. Plant Prefab issued three change orders final yr that weren’t client-driven, he mentioned.

    A aggressive area of interest        

    Even with advantages like velocity and predictability, off-site strategies stay a small slice of the U.S. single-family market. The Nationwide Affiliation of House Builders estimates that modular and panelized building accounted for 3% of single-family dwelling building in 2023 and 2024. 

    Glenn mentioned the largest barrier has been economics.

    “Traditionally, our price for land, labor and supplies has been a lot lower than in Japan, Scandinavia, Germany and different European nations,” he mentioned.

    He additionally pointed to a wave of venture-backed makes an attempt that struggled to scale. Katerra, which spent greater than $2 billion over six years, filed for bankruptcy in 2021.

    Nonetheless, Glenn mentioned the market is massive sufficient for firms that choose the correct lane and execute.

    “A bunch of cash got here in for some start-ups,” Glenn mentioned. “As in any new market. A bunch of individuals are available in. A bunch aren’t going to make it, however some are going to do disproportionately effectively.”

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