Absolutely Prefab-ulous: Why Luxury Buyers Are Moving Toward Modular | Barron's

2022-10-26 12:52:10 By : Ms. Aries Zhou

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       Absolutely Prefab-ulous: Why Luxury Buyers Are Moving Toward Modular | Barron's

Set on a vineyard in California’s Napa Valley, a compound intended to entertain a large family is in the early stages of design.

In addition to the main residence—in what Oakland, California-based architect Toby Long calls Napa-barn style—the project, as Mr. Long conceived it, includes a pool house and a party barn. The cinema, conservatory-style great room, swimming pool, hot tub, outdoor kitchen, large reflecting pool and outdoor terraces bring the party home. But for all its singularity, the lavish home is among a growing number of modern modular mansions springing up across the U.S. that feature prefab factory-built components.

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Ultra-high-net-worth individuals, some driven by the need to sequester safely during the pandemic era, have chosen to erect these houses, which can cost millions and even tens of millions of dollars, because they are more efficient to build, are of superior quality, and most significantly, they can be completed far more quickly than those built via traditional on-site construction methods.

Mr. Long, who has been building prefab houses for over two decades under the brand name Clever Homes, said that the genre “is emerging from its slumber in the U.S. When you mention prefab or modular, people think of high volume, low quality. But it’s overcoming its legacy of cheapness—it’s a sophisticated process.”

Steve Glenn, CEO and founder of Plant Prefab, which is based in Rialto, California, has completed about 150 units, including 36 at the Lake Tahoe-area ski resort development the Palisades at Olympic Valley, where residences sell for $1.8 million to $5.2 million.

“Prefab is popular in Scandinavia, Japan and parts of Europe but not in the U.S.,” Mr. Glenn said. “We have had a significant growth in orders over the last couple of years; some is Covid-related because people have the flexibility to choose where they want to work and live.”

Plant Prefab’s building system provided an efficient and predictable way to build high-quality homes in Lake Tahoe’s short building season at a time when U.S. shortages of skilled labor are particularly acute on the West Coast, said Lindsay Brown, principal and owner of the Brown Studio, the Encinitas, California-based firm that designed the Palisades development. Prefab “mitigated the need for us to compromise on our designs,” he added. 

Although the first documented prefab house was recorded in 1624—it was made of wood and shipped to Massachusetts from England—the concept wasn’t employed on a mass scale until World War II, when there was a great need for cheap housing that could be built quickly, and it’s only in the last decade or two that custom home builders have embraced it for high-end private estates and luxury residential developments.

It’s not an inexpensive option. Prices for custom prefabricated houses average $500 to $600 per square foot, but often are much higher. When site planning, transportation, finishing and landscaping are added in, the total finished cost can double or even triple.

“These modern modular mansions are unique,” Mr. Long said. “There are not a lot of people doing them. I build 40 to 50 prefab houses a year, and only two or three of them are mansions.”

Prefab, he added, can be a practical option in luxury-resort areas such as the Colorado ski-and-golf resort Telluride, where the snowy Rocky Mountain winters can throw a monkey wrench into construction schedules.

“It’s hard to build there,” Mr. Long said. “It could take two to three years to get on a builder’s schedule and two to three years to build the house, and there’s a short build season because of the weather. All these factors spur people to explore other methods of building. You can shortcut and simplify the schedule by working with a factory partner.”

Modular mansions, he added, can be completed in one-third to one-half the time of those built with traditional construction methods. “We can do a project in under a year—not the two to three years it takes in most towns,” he said.

There are two main types of conventional prefab options on the market that builders of high-end houses employ: modular and panelized.

In the modular system, building-block-like units are constructed in a factory, shipped to the site, placed in position with a crane and finished by a general contractor and a construction crew.

In the conventional structural insulated panelized system, panels that sandwich an insulating foam core are manufactured in a factory, packed flat and shipped to the site and assembled.

Most of Mr. Long’s architectural designs are what he calls “hybrids”: They meld modular and panelized elements with traditional on-site construction, and depending on the prefab manufacturer, a proprietary brand-named system that incorporates various features of both.

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In the case of the Napa Valley estate, for instance, the timber systems of the structures were prefabricated. The project has 20 modules—16 for the main house and four for the pool house. The party barn, which is framed by prefab timbers, is being built from a repurposed barn that was dismantled and shipped to the site. The main living area of the residence, including the great glassed-in room, was the only portion of the project built on site.

“In projects with high-dollar investments and complex architecture and finishes, there are always elements that are built on site,” Mr. Long said, adding that the amenities and special features of custom residences are what drive the cost up.

Architect Joseph Tanney, a partner in the New York-based firm RESOLUTION: 4 ARCHITECTURE, typically works on 10 to 20 luxury “hybrid” prefab projects a year, most of them in New York’s Hamptons, Hudson Valley and Catskills, and all of them are designed to meet LEED standards.

“We’ve found that the modular methodology provides the highest value proposition in terms of time and money relative to the overall quality of the entire project,” said Mr. Tanney, co-author of “Modern Modular: The Prefab Houses by Resolution: 4 Architecture.” “By leveraging the efficiency of conventional wood-framed modules, we’re capable of building about 80% of the house in the factory. The more we can build in the factory, the higher the value proposition.”

Since April 2020, a month into the pandemic, he said that inquiries for higher-end modern homes have “spiked.”

Brian Abramson, CEO and founder of Method Homes, a prefab builder based in the Seattle area that constructs houses whose finished prices range from $1.5 million to over $10 million, said that “we have seen a large increase in demand for our homes” since the pandemic “with all the people moving and wanting to change their living situation with remote work.”

He noted that the streamlined, predictable approach of prefab appeals to a lot of new clients who have built homes in the conventional way. “Additionally, labor is very limited in a lot of the markets we work in, and local contractors have multiple-year backlogs so we provide a faster option,” he said.

Method Homes are finished in the factory in 16 to 22 weeks and are assembled on site in one to two days. “Then they take four months to over a year to finish, depending on the scale and scope of the project and local labor availability,” Mr. Abramson said.

At Plant Prefab, which uses its own proprietary Plant Building System composed of specialized panels and modules, business is so brisk that the company is building a third factory, this one fully automated, that will be capable of producing up to 800 units a year.

“Our system offers the design flexibility and portability of panels with the time and cost advantages of modular,” Mr. Glenn says, adding that it’s “optimized for custom architectural homebuilding.”

The company, which was founded in 2016 to focus on custom homes designed by its in-house studio and third-party architects, is on a mission “to make great, sustainable architecture more accessible,” Mr. Glenn said. “To do that, we needed a building solution designed for custom, high-quality, sustainable home construction: a factory with the technology and systems to make the process faster, more reliable, more efficient and less wasteful.”

Prefab builder Dvele, which is based in the San Diego area, is experiencing similar growth. Founded five years ago, it ships to 49 states and has plans to expand to Canada and Mexico and ultimately roll out internationally.

“We make 200 modules a year, and by 2024, when we open a second factory, we will be able to do 2,000 a year,” said Kellan Hannah, the company’s director of growth. “The people who buy our homes have dual incomes and higher incomes, but we are moving away from customization.”

Prefab isn’t the only unconventional option that custom builders and their clients are embracing. Custom post-and-beam kits, such as those made by Seattle-based Lindal Cedar Homes, are being used to build turnkey residences that sell for $2 million to $3 million.

“There are no architectural compromises in our system,” said operations manager Bret Knutson, adding that interest has increased 40% to 50% since the pandemic. “Clients have a very open-ended palette to choose from. They can design whatever size and style of home they want as long as they stay within the system.”

He noted that clients like “the variety of modern and classic home styles available and enjoy the custom design process and the flexibility of the system.”

The kit doesn’t include interior finishes, which he said can double or triple the total cost.

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Lindal, the largest manufacturer of post-and-beam kit homes in North America, works mainly with clients in the United States, Canada and Japan. It delivers the house kits, which take 12 to 18 months to complete and around the same time to construct on site as do conventional builds, by shipping container, a plus for secluded vacation spots or resort islands that cannot be accessed by car.

Lindal, which has an international network of dealers, recently collaborated with the Los Angeles-based architectural firm Marmol Radziner on a 3,500-square-foot residence and matching guest house in Hawaii.

“The quality of materials was absolutely premium,” Mr. Knutson said. “There were completely clear fir beams and clear cedar siding throughout. Even the plywood was custom-clear cedar that cost around $1,000 a sheet.”

This article originally appeared on Mansion Global.

Set on a vineyard in California’s Napa Valley, a compound intended to entertain a large family is in the early stages of design.

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       Absolutely Prefab-ulous: Why Luxury Buyers Are Moving Toward Modular | Barron's

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