OFFSITE; ARCHITECTURE JCTING THE FUTURE EDITED BY RYAN E. SMITH and JOHN D. QUALE FOREWORD BY CHRIS SHARPLES, SHoP ARCHITECTSConclusions and next steps ‘These three surveys ar Tose he suey ae positive frst steps to gathoing dat and su {the claims ofthe offsite industry. Cost and schedule savings are among tors that have a significant impact on the adoption of offsite construction toes found deen net lp nd 8 prc sa na decesein oct cede Hower nese 8 porcentin projet budge, tis uncea vet pres of oe sone stent ssn fone ete Cay aay sttion gen project speci content ni parurato tne Technolo i rctectar Conartth Unweaty of toh cecuareag Stub which bogs wo unl th ute munnes pacers ana nite trough case study evan Ise Capes Pincha oon Notes In, New Wek, 1B: fea Buea ad anc Nato Ba fun ress, Now r,t Bary Berl an Pater tones, one Fatvsing he Maso Dulin TheMiseum of Mato Ar en tog loble, Forces af Production, Transaction, N 1 : Nei, Foc Posen Tron ew Be Byer E Sth, pu ofthe Rout ate 2014 Ste Corsten hay ena Bur Scnea OF Sta Contactor Coa pl ‘sites/www.nibs.orgiresource/resmagr} a C. m4 asi 10SCCMIBS. OSC 20r4Surey pl a Janes Tbe, Forewort Cu oust Assurance Cun Contel a yan Pred react A Gio Mader Des and Contnooon ea Inc., Hoboken, NJ, 2010, pp. viinix. a yo Sri) Preach. oh Wie & Se, he. Hoboken, Mi “ IcGrew-Hill Construction, Prefabrication and Modularization: Ine na Frokict onstruction Industry, www.nist, 1 wire Coston nn, wt got cone ater al ie Cnsreraty SUP at ens 3010 “i ar Conscton Aan Rep ‘Building Institute, Charlottesville, VA, 2011. a 7 nent modular construction ‘uction performance . Smith and Talbot Rice nm Thodular construction (PMC) has been marketed as a more cost- aher-qualty, and faster-to-market solution than traditional stickbuilt IMB). The added value of PMC, although conceptually strong, has ignificantly substantiated, This research aims to provide data to fil this tudy quantifies the added value of PMC and evaluates the contextual lwhich PMC in building design and construction may be realized in North nd beyond. The research leverages 17 case studies, listed in Table 7.1 Fes a portion of them to traditional site-built benchmark projects for ce parameters including cost and schedule. The data was collected rature review, questionnaire, and interviews. In addition, qualitative collected to determine the projact-contextual parameters that exist to jeoess in PMC delivery Finally, a roturr-on-investment study is included fate some of the lifecycle benefits of PMC. ‘study method utlizes the case study method for investigation. This method is a com fegy in the study of humanities, law, and business (Yin, 2014). More ‘but environment research has used the case study method, by which project data is collected and analyzed for generalizable results (Groat 2013}, The case study project poo! was established in consultation with ular Building Institute Education Foundation and Canadian Foundstion National Institute of Building Sciences Off-Site Construction Council. The lof 17 cases documented was based on: 5 to avaiable archival data and willingness of the stakeholders to pate and offer adcitional data sity of project sizes, locations, and building types, in order to evaluate {C across sectors, countries, and cultures; andTable 7.1 Case sty roots and thal geographic lcstione LOCATION Greater Sudbury, ON, Canada Chula Vista, CA, USA, ‘San Francisco, CA, USA, Fledmond, Wi. USA Melbourne, Austra Detroit, Ml USA Conktin, AB, Cansda stata Nickel Rim South Hig Tech High SOMA Studios STEM Schoo! Nicholson Vilsge 01a Feators Academy MEG Pate’ Cove Ledge Citizen Bankside London, England Mery Hospital opin. MO, USA. Sins Maryvile, WA, USA Woverhampton, Uk ster het Lodge Whistler BC Conade Inwood Apariments (The Stack) New Yor ly, NY USA, Manresa Student Housing Manrese, Spain : Wels Fargo Prosi AZ, USA Kethar Chi Cro Contr San Fraciso, CA, USA The Meckias Philedetania, PA USA *_srchitectura significance, in ordrto demonstrate PMC performance with ‘buildings that have a greater opportunity for continued cultural inves Araking syst contain hse thee factors wa dx a rudimentary process for determin i = a suport espe projet tomate pa stant te Ne and eight could be comy in cOSt to traditional stick-buit construction benchmark projets, The comparative method Corporation, a cost consultancy firm, Ke fim, Key parameters in deve these benchmark comparisons included the following * Date for both the PMC crs and rotons berchmork compar Was normalized to first quarter 2014 in US dollars and Wast DC building location. ‘le Of cost ware calculated in $/SF and it was assumed that all of the ark projects use a design-bid-build delivery system. When possible, 8s for the comparisons were based on actual items of work. When 5 not available, precedent values from other projacts were interpo- these comparative projects, 81s were based on current bid prices in Washington DC and subcon- overhead and markups were included. General contractor overhead it wore excluded ues determined were based on the probability of cost of construction programmatic design stage. mating the values to construct the benchmarks, the folowing sources eed: US Department of Labor Prevailing Wage Resource Book {US of Labor, 2014), Building Construction Costs with RSMeans Data 2014), and Cumming Corporation Internal Economic and Market Fecort fa). The items not covered in this comparison included: hazardous tement, utility infrastructure improvements, design/consultng fees, its, testing and inspection fees, and land acquisition casts. isons were developed into case study cut sheets, each sarving as a ‘example of PMC versus traditional building benchmark counterparts, gmples of case study cut sheets are included in the Appendix, has several imitations. The first imitation is the fact that there are few 10 date that have been built relative to traditional construction. The (Quantify @ trend or make a statistical argument is dificult without more thermore, the amount of information that was provided for particular stakeholders was also limited. More often than not, participants did information such as cost and labor hours. With the small amount af infor the already minimal amount of case studies, its challenging to report ly significant results. Regardless, these cases provide timely evidence cific performance, analysis: en claimed that the cost of PMC is less expensive than traditional meth- nstruction. Further analysis in these cases demonstrates that the cost scessariy always lower. In fact, the cost is sometimes at a premium. the study suggests that PMC projects are on average 16 percent lower 3} construction cost compared to conventional methods of construction anPGE, Sa a Rin Cae ee Sener Foure7 Itis important to note that most stakeholders reported PMC offers a scr’ contro of cost compared to traditional build. This is attributed to the inherent forstrcton 10 reduce the number of change orders in any given PMC project. Ina recent femgaredto conducted in Montgomery County, Maryland, the Office of Legislative Ovek ae (2014) studied 17 county government projects that reached substantial ca tion between 2009 and 2013. The study found an & percent overall incr contract costs due to change orders. Respondents concluded that the # ‘why modular construction is cost controlled is because the design must be ‘complete before module production, driving the number of change orders When the cost was at a premium, respondents listed the folowing ‘additional materials requted for structure and transport transportation costs for large load permits and laad cars; ‘+ time lost due to permiting: time lost due to transportation over long distances, Schedule The validity of the industry’ claim that schedule reduction isa clear advanta PMC has been demonstrated by precedent research (Smith, 2011). Acre cease studies documented, the schedule was reduced by an average of 45 pe (Figure 7.2). Respondents indicated that this is due to the fact that a PMC is builtin a factory and site work is conducted concurrently, This reduces th time compared to tracitional methods of construction, according to which o built work must be cared out sequential. Tha time saved with PMC is al ‘opportunity for additional cost savings, ‘mesa ya SENS Wah Th stakeholders were asked for qualitative information about a range of to geta better understanding of how PMC performs against conventional ion methods, This information is intonded to give some understanding PMC can be improved ly, there is a struggle to turn over construction projects on time and on Based on the case studies, these survey results show that the use of fan mitigate cost and schedule challenges. When stakeholders were asked the drivers behind their use of PMC rather than conventional construc- fe most common response was a mativation to reduce the construction Je. LeRoy Stevens from Stevens Architects explained why he prefers PMC: is an abilty to control the hard cost and schedule using PMC.” Al of the ies included inthis report not only met their construction deadlines but the average construction schadule by an average of 45 percent when Fed to traditional construction, re ary software used by all ofthe manufactures, architects, and contractors {rawing programs such as Autodesk AutoCAD. Remarkably, few are using atforms, despite the construction culture software tend.Figure 73 Software ured nem: very Regulatory challenges OF the six cases that acknowledged the issue of regulatory challenges, Noted that permitting and code issues delayed the project. Permitting and) officials are not familiar with or accustomed to this type of construction imperative to start acquiring approvals and buildingtransportation permits An example of this is the Mercy Hospital in Joplin, Missouri. Because the f ‘was located in California, 1,500 miles and six states away, this projact experi ‘ongoing transportation problems: ‘The transportation from California to Mis ‘was a huge hindrance tothe schedule and oftentimes transportation was halt {quire more permits” (McCarthy Building Company. Further study is ne {termine how a closer factory would impact the transportation and permit Felative to an even fastor constuction schedule. Benefits The most significant benefit of PMC is its abilty to be completed with redu in Schedule, Every survey respondent named meeting the substantial tion deadline as success. The use of PMC, according to these case interviews, does not entail a loss of quality compared to conventional con ton, inteiowees were impressed with tno subtantel quality tthe buildings. he Early collaboration ‘The survey asked respondents ifthe utilization of PMC required earlier col ration between project stakeholders. Only one respondent indicated that ‘was no need for earlier collaboration. All other responses indicated that ef and greater lavels of collaboration were necessary, Thero is @ ortca pol Permanent modular construction ject schedule where all major trades need to be well versed in the pro Needs and possible mishaps. This point is far before construction begins, modules must be completely designed before construction starts. Such an cal point calls for major trades to either be involved as consultants very (oF under contract from the beginning. While itis still possible to achieve | of collaboration with a design-bid-build contract, its very difficult and innorently colaborative as its design-build or intagrated project delivery spars, he infancy of PMC compared to traditional site building makes for many pe projects, in which the architect, contractor, and manufacturer are expe- their frst modular build, Because of this, its likely that the number of buikings will grow exponentaly in the coming years. Thorough knowledge between manufacturers, contractors, and architects is crucial to the suc- each of these buildings; and the failure of such knowledge transfer seems. largest hindrance in the success of PMC, The fast-paced nature of PMC. litle room for ertor in permitting and design, both of which can lead to the of the project through change orders. These items must be finalized tenstruction begins; therefore, the need forall key trades to be involved beginning of the project is etical is suggested, based on these case studies, that more collaboration at the ing af the project would be easier if there was a project delivery method ‘thatis more conducive ta this level af collaboration, sueh as design-build fated project delivery. on investment IPM, the cases in this study reduced their construction time by an average Percent. To put this reduction of time in terms of cost benefit, a return on ent (RO!) method was developed to account for time savings. The RO! 16 three discrete bulding type pro-formas from different developers: reall {and charter school buildings respectively. The developer data wes assessed la schedule improvement of 25 percent and 60 percent reduction from the schedule. This evaluation did not include the financial benefit of early return ational business such as sales, or socialfenvironmental impacts. The ben- juded initial cost savings on general conditions and early lease rate income sd with schedule reductions fe pro-formas included four sections: analysis of the schedule based on 0 percent improvement, 25 percent ution, and 50 percent reduction; cost of construction Cost of the construction loan; and ‘generated income. rket rate numbers for the ROI were taken from the Newmark Grubb 2014 Year End UtalvMountain West Market Report The rental incomerumbers were based on the assumption that the building will be 100 cocupied, reflecting the grestest possible opportunity for income, The pe Sho two areas where there is an opportunity for cost savings using PMC. ‘21098 include the cost ofthe construction loan and the money generated the time saved, 40,000 SF OFFICE SPACE - $7.66 M Retail space * The retail space at 25 percent schedule reduction shows $5,187 in onstruction loan interest and $29,333 generated in rental income effective gross income of $34,620, At 60 percent schedule reduction, $10,250 was saved in constructio interest and $58,666 generated in rental income, giving an effective income of $69,017 (Figure 7.4). sasaa08 Offce space az” 6C CEE 2 generated rental income of $292,333 for an effective ‘gross incor cere $945,547 at 25 percent schedule reduction ‘At 80 percent schodule reduction, $78, 147 was saved in construction Rtoronsene _terestand generated rental none wes 844000, quingnoleciny ‘SF retail space income is $518,147 (Figure 7.5}. , gett =. ‘saved in construction loan interest with a 25 percent schedule ees luction. $134,030 was generated in rental income for an effective gross om income of $409,319 (Figure 7.6). — \ction cost. “oe $58,667, P oe - Ea Table 7.2), qualitative benefits (Table 7.3), and return on investment (TableAan E. Seth and Tab Rice Permanent modular constuction 36,000 SF CHARTER SCHOOL - $7 M ‘outlook ses fe sconomic downturn ot 2008, tho demand for construction andthe supoly a Gonstucon folowed suit. Constructon demands high eosin, yet supply low end cannot meet demand (Figure 7.7. Ths presents a gop where a construction can take advantage due tits lower labor requirements, The rah for PMC. snc a son Annual % Change ~ Construction Volume vs. Skilled Labor sro (National) sone some soum Y za Figure 7.6 |(SCONSTRUCTION LOAN INTEREST SAVINGS RENTAL INCOME. S rere 800 Saree co oy 2 i com 10% sevings commen etme et Cgt Coc areca ang etal Schedule 45% savings a Js limited by the sample size, the scope of company parcpation, Ussmatuaton te oy Cos cot ang Gholenge of locating appropriate traditional constuction comparisons. “ease eatin cha edeton the research thangs soggest helpful metic: tobe doveopd by etn Sp software putccan: sae hers in the future to demonstrate the value of PMC beyond inal edu. ee = cistand sched tough tectve a5 baseline reper arson emetin mes — nce metic of cost and sched dont tae ino consieraton the ul ea pes ip benefits of otste modular. This section discusses nev saps inthis Sato tyre ee ho demonstrate the perfomance of PMC. Lesson learned once a Fe study tock PMC projects and gathered quantitative deta foreach case erature sources and questionnaires compled by project stakeholders. folowed by quottaveinteriews wit architects, cortactors, and mod tale7& esi ufacturrs. The data colected was comoared to benchmark cas studs ee sched aeetan aaamae ng Corpraion, a cost estimation canoutant. The benchmark projects soon 60% shade rection 10.995" everage Eiticnal ste bult proects completed in the lst on year, Although cost sce ormalzed co the cation focior was sinlar, it was chalenging fo find that were comparable enough to PMC cases to draw feasible conclusions nstrato the performance of PMC. tying a traditional site-bult project of similar size in overall square foot ‘and number of stories, and with simlar specification is difficult. PeerFan E. Smith and Talbot Rice review of this study suggests that future research should use two com ‘methods to determine performance, ‘Method A 1. Locate a built project whose type is apprapriate for PMIC, This may ‘multifamily housing, student dormitory, education, retail, or other Procure the building's as-built drawings and specifications from the stakeholder team and their permission to evaluate the project Obtain three separate bids and construction schedules from PMC Bl and partnering general contractors for the project in the same locale site-buit work, including all vertical construction costs, Compare the actual traditional site-buit project to the bid project construction performance, Permanent modular construction af Bulding Institute (2010) Improving Construction Etfciency and Productivity th Modular Construction, www.madula cgimarketingldocumnentshWhitepaper_ ingConstrectionE ficiency pa 0.03 (accessed Apri 27, 2015) br Building Institute Website, ww. modular orglHtmiPage.espx7name- ss04 Api 17,2018), ark Grubb ACRES (2014) 2014 Year nd UtalMountain est Market Repor, wns 5 comipublic/uploacs/1/2016/1/newmarkyearend.pa accessed Decomiber 1, 18, (of Lecisatve Oversight (2014) Change Orders in County Construction Projets, ;mortgomerycountymd.gov/eouneResaurcesFiles/agenda/em/2014/140403 140403. 601 pot laccessed December 1, 2016) 2011) Prefab Architecture: A Guide to Modular Design and Construction, John fey & Sons inc, Hoboken, MY, Captor 3 entof Labor (2014) US Deparment of Labor Prevalng Wage Resource Book US tment of Labor, Washington, OC [20141 Case Study Research: Desig and Mothods, th Elton. Sage Publications, sand Oaks, CA, Pp. 6-6, Method B 1. Locate two similar buildings that are going tobe buittin the near term, that the buildings are appropriate for PMC, including mult-famity hou office complex, or 8 corporate retailer or hotel chain thats building the brand in two different cities (e.9, Starbucks or Faifeld Inn by Marriot) Convince the building owners to build one using traditional stick bul struction and the other using PMC. Document the construction performance data of cost, schedule, safety hours, change orders, defects, and incidents of injury Interview the project stakeholders including owners, architects, and tors on each project to gather qualitative data Compare the site-bult project tothe PIMC project across the construction ‘mance parameters and determine what contextual qualitative factors ft interviews lead to successful PMC delivery Acknowledgments This study was funded by an industry consortium including: Modular Bk Institute Education Foundation and Canadian Foundation, Whiting Association of General Contractors, PCL Constructors, American Inst ‘Steel Construction, Tiumph Modular. Modular Building Institute membe the National Institute of Building Seiencas Of-Site Construction Council peer review. References ‘Gordan (2014) Building Construction Costs wit RSMeans Data, Gacan, Rockland Gray, S. (2014) Cumming Corporation intemal Economic and Market Report Corporation, Washington, DC Groat, L_& Wang, D. (2013) Arcitectual Research Methods, 2nd Editon, John Sons, nc. Haboken, NU. Chapter 12Ayan & Smith ana Tao ice Appendix Appendix A MANRESA sTUDE MANRESA STUDENT HOUSING eater Fame ouesmame re 2008iitie § §— 44,299 gue 75a ae eos £3.64M aa €231.5K £2.94 enti Gum TOSSA «7 SANE yee Witter 1D er TRUETION uBarON c0st/s MANRESA STUDENT HOUSING 7 7 MONTHS 5S STORIES CONCRETE 44239 sam $2049 Permanent modi constustion ‘COMPARED PROJECT 1b MONTHS 4 STORIES wood 55,000 S11.7M $213.33ryan E. Smith and Tabot Rice Appendix B ‘THE MODULES PRILADELPHR, PR USA Modi sir 0am Deca — soon 20 1Deittres 80,0005" Bites i aa ®an sia7Meqm $300k" S3.6M sms, 5 sms V4 ears 6 SRE 9 2 12 Bes 3S fete ne THE MODULES 6 MONTHS 5 STORIES wooo 80,000 $12.7M $158.23 Permanent media consvuction mags fereace.comfne- ods erences Woe. 18S COMPARED PROJECT 16 MONTHS 4 STORIES wooo 55,000 S1L.7M $213.33yan. Smith and Talbot Ace Pormanent modular conseustion Appendix C ‘THE STACK NEW YORK, HY. 5A Mod Manufacture Dale Bubig Sens sur Deen, soso 2013 ioe 38,0088" Bae ru Gus rerio ie Aon ®as 1 —e" Images: lucky and Ary Barkow $5.4M mm, $7.3M areem fren 8 THE STACK ee — , enn 12 MONTHS 16 MONTHS rere TER fl es — — 4 ier 19 lc: TH ey 8 STORIES 4 STORIES STEEL/CONC wooo SIQLO4 Igoe mamgent= fe, 38,000 55,000 $7.3M SIM cose $191.84 $213.33 mss ram lvoe Tse