The MiTek Modular Initiative is a new approach to factory-based modular construction that has an undisclosed amount of backing from Berkshire Hathaway
The MiTek Modular Initiative, which has backing from Warren Buffett’s conglomerate, is betting big on modular construction—something fewcompanies have been able to navigate successfully.
Warren Buffett's Berkshire Hathaway-funded startup MiTek Modular Initiative is transforming risk-averse, conservative construction industry processes
This is a so-called modular building, in which high-end module boxes are manufactured in advance in a factory, and then they are built quickly and effectively by connecting and stacking them.
There are plenty of hurdles to making this type of construction process work, from the high overhead of building and running factories to the regulatory and labor challenges of getting unconventional construction approved.
Formally launching today, the initiative is a joint venture between MiTek, a construction software and building services company, and New York City-based Danny Forster & Architecture, which has designed several high-profile modular buildings, including one that will soon be the tallest modular hotel in the United States.
Their approach combines Forster’s firsthand knowledge of the shortcomings of modular construction and the wide range of construction companies under MiTek’s umbrella, including a manufacturer of structural steel, a maker of high-rise building facades, and a maker of the fireproof wall boards that line the insides of buildings around the world.
Forster’s firm joined with MiTek about a year ago to establish the MiTek Modular Initiative, a long-term investment in developing a new approach to factory-based modular construction that has an undisclosed amount of backing from Berkshire Hathaway.
Through an innovative approach to making the modular steel boxes that form the literal building blocks of this type of construction and optimizing how and where they are outfitted with utilities, interiors, and facades, the Modular Initiative could overcome the challenges that have held other efforts back.
It’s an approach that’s been used to create highly replicable building projects like healthcare facilities, condominiums, and hotels, including the AC NoMad Hotel in Manhattan, the tallest modular hotel project in the United States, which was designed by Forster’s firm and is now under construction.
Constructing buildings in a factory is not new, and MiTek’s Modular Initiative is certainly not the first to try to make industrialized construction work at a bigger scale.
“What causes most other modular companies to go out of business is they just get crushed under the weight of their own overhead,” says Todd Ullom, vice president of modular building solutions at MiTek, noting that the need for expensive factories—and a steady stream of projects to keep them running—has been an Achilles’ heel for modular construction.
These pop-up plants, as the company calls them, can be created as needed in already existing warehouse spaces near building sites, using equipment rented from MiTek to outfit each module like the last stages of an assembly line.
The actual construction of modules has been one of the major choke points for big modular projects in the U.S., according to MiTek’s Ullom, who says there just aren’t enough factories and companies capable of building them at prices that can compete with factories in places with lower labor costs.
“To date, most of the high-rise modular buildings that have been built in the U.S. are built using offshore labor,” he says.
That issue came to the forefront last fall, when the board president of the San Francisco Building and Construction Trades Council sent a letter to the city’s mayor blasting a planned modular project for lowering standards and pushing down wages.
One of the ways MiTek may get general contractors on board is by finishing as much of the module as possible in its own factory, sending the flat-packed boxes to pop-up plants with labeled boxes of precut parts that construction workers would simply need to put together—more Ikea than Lego.
Even with that time and the luxury of Berkshire Hathaway’s deep pockets, a lot about the construction industry would have to change for something like this to succeed, from the work practices of general contractors to local permitting rules to building inspections inside manufacturing and assembly facilities.
Source: fastcompany
WEB: https://www.mii.com/
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