Modular Construction Use Is ‘Booming’ in Commercial Building – NREI

As more and more developers get accustomed to the process, the use of modular construction is expected to increase.

Commercial real estate experts forecast increasing demand for modular construction in the healthcare, industrial, education and multifamily sectors.

“If modular goes mainstream, more manufacturing facilities will be needed to meet the demand for modular buildings,” says Mark Skender, CEO of Skender, a Chicago-based design and construction firm. “So, theoretically, yes, the more modular companies ramp up production, the more industrial facilities will be occupied.”

The U.S. modular construction business has doubled in size to $8 billion over the last five years, according to the Modular Building Institute, a non-profit trade association serving modular construction. Of general contractors already using modular construction, 67 percent expect modular use to increase over the next three years, 24 percent expect demand to remain the same, and none expect it to decrease, according to the U.S. Chamber of Commerce Commercial Construction Index. General contractors use modularization mostly for constructing exterior walls, building superstructures and fulfilling mechanical, electrical and plumbing requirements. Around 69 percent of general contractors in the Northeast use modular components, leading the rest of the United States. Contractors in the South use the least of these modular components, at around 24 percent.

“It’s booming,” says Skender. “We’re very early in the utilization of modularization, and the emerging firms are forming various strategies and approaches. As more people understand the potential for industry disruption, it will become much more common.”

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Written by:
Sebastian Obando | May 15, 2019

National Real Estate Investor