Developer That ‘Cracked the Code’ on Modular Building Exits the Business


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Forest City Ratner’s 32-story tower in the Pacific Park complex in Brooklyn is the tallest prefabricated steel structure in the world.

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SHoP Architects

Five years after announcing that it had “cracked the code” on modular building technology and would open a factory in Brooklyn to construct modules, the developer Forest City Ratner is getting out of the prefab construction business.

The firm said on Wednesday that it would sell its factory at the Brooklyn Navy Yard along with the associated technology to a former Forest City executive, Roger Krulak.

The decision came as the developer completed construction of the tallest prefabricated steel structure in the world, a 32-story tower at 461 Dean Street in the Pacific Park complex in Brooklyn, which is weeks away from receiving its first tenants.

Forest City made the 930 modules that were used to build the tower at the Navy Yard. It had originally planned to use the factory to create the building blocks that could be outfitted with wiring, plumbing, bathrooms and kitchens for each of the 15 buildings planned for Pacific Park, originally known as Atlantic Yards.

In those heady days, Forest City had boasted that modular technology would allow the company to build high-rises for 70 percent of the cost of a conventional building and finish the tower in 18 months, or about 75 percent of the typical time of construction.

But the tower was plagued by delays and later a bitter dispute between Forest City and its partner, Skanska, which it brought in to run the factory. Forest City ultimately took back control of the factory, reorganized the production process and finished the first tower. That tower ended up taking four years to build, becoming one of the longest construction projects in city history for a single tower.

“The bumps we hit, with respect to Skanska, are typical of any start-up,” said MaryAnne Gilmartin, the chief executive of Forest City Ratner. “The good news is that we’ve worked out a lot of the bugs and gotten through the growing pains of innovation.”

Mr. Krulak, who oversaw the work on the modular building for Forest City, and recently formed the company Full Stack Modular, said that he and Forest City had worked out the factory mishaps, technology kinks and disputes that turned what was supposed to be a quickly built tower into one of the longest-running construction projects in the city.

The building, he said, is proof that the technology works.

Mr. Krulak said his company is in talks with several developers to design and build modular buildings in the New York area.

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The tower, at 461 Dean Street, ended up taking four years to build, becoming one of the longest construction projects in city history for a single tower.

Credit
SHoP Architects

“Modular is the future of the industry,” he said. “Our systems are not only more efficient and cost effective than conventional building, but also more sustainable and community friendly.”

Neither party would disclose the sale price. But Mr. Krulak said he would retain a labor agreement that Forest City had signed with the construction unions.

For more than half a century, the federal government and real estate developers have sought ways to build prefabricated towers that would cut down the time and the expense of high-rise construction.

The idea is that the components of a modular tower can be built inside a factory, unaffected by weather, while the foundation for the building is poured. Increasingly today, builders are constructing low-rise structures, up to 10 stories, for schools, apartments and hotels using modular technology.

But taller towers were another matter, requiring additional steel reinforcement to contend with severe winds.

With four years of painful experience behind him, Mr. Krulak says the manufacturing process is enormously beneficial.

“The time to build will decrease by 25 percent,” he said. “And you’ll save between 15 and 20 percent” on the total cost of a project.

But there are no plans for a second modular tower at Pacific Park, at least for now.

In 2014, Forest City sold 70 percent of the residential development to a Chinese company, Greenland Holding Group, a deep-pocketed company that wanted to complete Atlantic Yards by 2022. Instead of continuing the modular construction, Greenland Holding insisted on conventional construction for the next three buildings.

Ms. Gilmartin said that nothing prevents Mr. Krulak from pitching Forest City and Greenland about other towers when Full Stack Modular is up and running.

In the meantime, the 32-story tower may not be the tallest modular building for very long. A 40-story building is planned for Singapore, Mr. Krulak said. And modular construction has become very popular throughout Asia and Australia, although few of the buildings are more than 20 stories.

“It’s almost at the tipping point,” Mr. Krulak said. “It’s the future.”

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