Off-site building: the future of real estate development.
Feeling bearish about the building market?
You don’t have to be. There’s cause for optimism, even in the face of a pandemic-induced slowdown in the economy.
Prefabricated homes were already poised to be the sleeper option for developers, and they’re still the future of real estate development, in the near and far term.
Why? Because our off-site construction provides builders and homebuyers with a fast, efficient, affordable option…even in today’s building climate.
Off-site building: still the future of real estate development
Off-Site construction emerged as a major disruptive force in the construction industry.
In fact, the global off-site construction market was expected to generate around USD 175.15 Billion by 2025, with a CAGR of around 6.7% between 2019 and 2025.
We may be a bit off-track in those projections now, but at ICG we know, all to well, that every setback is followed by recovery and growth. We’re living proof: our company was born in the depths of the 2009 market correction and we’ve never looked back.
ICG has capitalized on advances in design and manufacturing technology, and shifts in the labor market, to create a cost-effective, high-quality product that fit a tighter budget.
Off-site construction saves real estate developers time and money
There are so many advantages to the off-site method…they work together to drastically cut costs of building a new subdivision or apartment complex.
Here are the top 6:
#1 Lowers the Number of Contractors
Typically, a developer will hire a contractor, who in turn hires a subcontractor. Then that subcontractor may hire more subcontractors, and on it goes.
Off-site construction eliminates the need for multiple tiers of contractors because most of the work will be done by a single company that controls the supply chain from top to bottom.
#2 Gives You an Accelerated Build Schedule
Off-site construction, in contrast to on-site, is equipped to deliver shorter project timelines.
Because off-site construction projects have a near factory-level method of building, there is less risk of delays and unforeseen complications on-site.
A shorter timeline…less money spent. Plus, residential projects like condominiums and apartments have repetitive structures that can be executed even more quickly with an off-site build.
This isn’t to say that customization doesn’t factor into the off-site construction process.
Companies that offer off-site services are accustomed to serving demands for custom homes. With or without extensive customization, off-site construction projects are completed at a quicker pace by professionals who have developed a standardized process.
#3 Gives You a Clearer Picture of Costs
Because building schedules are more predictable with off-site construction, estimates are more reliable. Supply-chain consistency, climate-controlled manufacturing, predictable factory labor costs, and relatively stable on-site labor costs all add up to fewer surprises.
And since our company is vertically integrated from sourcing the lumber to overseeing the assembly, you’ll only have one bill to manage when we’re finished on-site and your trades are ready to take over.
#4 Reduces Clean-Up Time
A typical on-site construction job leaves behind a copious amount of debris in its wake. The dumpster pulls and clean-up time add up on the job site – they’re expensive and a needless waste of time and money. 3D computer modeling, laser-guided cutting and precision assembly in the factory results in the minimum of waste, off-site, and on-site.
This saves time, money, and the environment.
#5 Improves Safety
Safety is always a top concern for any contractor or developer. A traditional job site is an environment filled with hazards. Off-site construction reduces safety risks during a build. For example, it requires far fewer power tools and heavy equipment, so it eliminates a large number of potential safety issues.
Further, since the pieces of the structure are already assembled off-site, there are far fewer tasks required for the on-site team to perform when the home or apartment arrives.
#6 Increases Quality
Quality is the most misunderstood, underrated benefit of off-site construction. Prefabricated homes aren’t flimsy, monotonous wood-framed boxes on a concrete foundation anymore.
They’re dynamic, customizable single and multi-family dwellings that can be modified to suit both regional building codes and consumer demands.
And the controlled environment of an off-site facility provides the opportunity for more thorough quality inspections of units before they arrive on-site.
This translates to less time wasted fixing unexpected problems and a decreased likelihood that issues will be overlooked before completion.
Don’t take our word for it, check out the numbers on off-site construction
If you’re looking at the future of real estate development in a tighter economy, the numbers tell the story.
- Off-site construction has the potential to scale to an industry that represents more than $100 billion in US and European real estate, delivering up to $22 billion in annual savings.
- Off-Site construction has the potential to claim $130 billion of the market by 2030 in the US and Europe with moderate penetration.
- Off-Site modular construction can increase construction speed by as much as 50%.
- In the right environment, modular construction can cut costs by 20%.
- Off-Site construction becoming more prevalent would help fill a $1.6 trillion productivity gap.
These predictions aren’t simply based on theory. There’s mounting evidence that this disruption is well underway.
McKinsey and Co. discovered that, in the United Kingdom, 40% of home builders surveyed said that they were already investing in manufacturing facilities or intended to do so in the near future.
In 2019, Katerra, a US off-site construction supplier, announced a round of funding from Softbank that took its estimated overall value above $4 billion.
Prefabrication and off-site construction processes have been used for years, but today, with the emergence of new technologies and construction practices, we have the ability to utilize these strategies to create innovative and quality buildings, while also improving construction productivity.
These reported productivity benefits of prefabrication and off-siteization are particularly exciting in today’s economy given the benefits of creating superior buildings while saving cost, time and waste.
Harvey Bernstein, VP of Industry Insights and Alliances at McGraw-Hill Construction
Prefabricated homes had a bad reputation for years – and it was partially deserved. But the design and production of what used to be cookie-cutter modular homes, has evolved into a sophisticated merging of leading-edge 3D design, environmental efficiency, speed…and consistency coupled with surprising flexibility.
Off-site Construction: The ICG Advantage
Here at ICG, we serve clients who are embracing the off-site construction model and are enjoying the benefits. This trend reflects the growing sentiment of the industry as a whole.
ICG understands that home builders are working to decrease construction cycle times and improve quality.
When you’re ready to start planning your next commercial or residential development project, contact ICG to see how you can save time and cut costs for your build. We can help you hit the ground running.
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