Kevin Flaherty speaks on the Factory-Built Construction Sector
The Cornell Program in Real Estate was pleased to welcome Kevin Flaherty to the weekly Real Estate Industry Seminar on February 15. His presentation highlighted the emerging trend of modular construction in real estate development. While traditionally focused on single family residential construction, modular building is currently represented in the multifamily, office, and even hotel sectors.
In recent years, modular construction has made significant strides toward mainstream acceptability by overcoming its unwarranted negative stereotype.
“The word ‘modular’ strikes a nerve for many reasons,’” noted Flaherty. “In actuality, ‘modular’ construction is an efficient building process that relocates the majority of construction from the site to a manufacturing facility. The final product is comparable – and often superior – to site-built construction.”
The modular construction process significantly reduces the duration of construction. While the site-built construction process for a new home could extend for 18 weeks or more, the modular construct process takes only 8 weeks from start to finish.
“We’re able to do many things simultaneously in the factory that must be sequential in the field, and the process isn’t subject to the typical weather, subcontractor, or other delays of site-built construction. The modules are 90% complete before they are shipped to the project site,” explained Flaherty.
Builders and developers derive other benefits as well from the modular construction process. It reduces indirect costs, such as insurance, overhead, and financing due to the speed of the process, and larger developments, such as condominium or apartment projects, can be easily stopped and restarted based on changes in market conditions.
“For larger projects, a builder may only have a few dozen modules under construction at any given time. If there is a downturn in market conditions, a builder can stop ordering additional modules,” said Flaherty. “The modules under construction would be finished and delivered onsite, but, unlike in most site-built construction situations where the entire building must be completed before it generates revenue, the builder would be able to lease up or sell all the completed modules and put the development on hold until market conditions are more favorable.”
Flaherty has 22 years of management experience in factory-built housing. He joined Redman Homes as Sales Manager for the North Carolina plants in 1995, two years prior to Champion Enterprise, Inc.’s acquisition of Redman Homes. Flaherty entered the factory home industry in 1983 in Western Colorado where for 5 years he managed Jack McLaughlin Homes, a factory home retailer and developer.
For more information about Genesis Homes, visit their website at www.genesishomes.com. Information about Champion Enterprises, Inc. can be found at www.championhomes.net.
The Real Estate Industry Seminar is a weekly session held exclusively for students in the Program in Real Estate. It provides students the opportunity to interact with industry leaders and explore a number of current topics within the real estate field.