A newly launched Berkshire Hathaway-backed modular construction company says it’s taking a new approach to factory-based construction, and it hopes to thrive in a space where many others have fallen flat. Discussions of off-site construction have circled the home building industry for decades, with few companies successfully winning over builders. MiTek Modular Initiative received an undisclosed amount of funding from Berkshire Hathaway to further develop its method of creating steel boxes that act as building blocks, reports Fast Company. The venture is a partnership from construction software and building services company MiTek and New York City-based Danny Forster & Architecture.
The focus is known as volumetric modular building, a form of prefabrication that uses factories to build discrete boxes that can be combined into rooms and stacked into buildings. 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. Companies like Houston-based Katerra and Sekisui Heim, the homebuilding arm of Japanese conglomerate Sekisui Chemical, have managed to survive as vertically integrated builders, while many smaller prefab companies have either folded or been subsumed by others.
“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. “That really led us to a different business model than others have taken.”