It’s now too expensive to build local for New York’s modular construction industry

Development East News
Prefab concrete bathroom pods at a factory in Poland. The high cost of manufacturing in New York is driving away many modular construction firms. (seier+seier / Flickr)

Prefab concrete bathroom pods at a factory in Poland. The high cost of manufacturing in New York is driving away many modular construction firms. (seier+seier / Flickr)

Thanks to high rents, New York City is losing one of its longtime modular construction companies at the Brooklyn Navy Yard. And the news could send ripples through the city’s prefab construction scene.

B2 under construction. (Courtesy DKC PR)

SHoP’s B2 under construction. (Courtesy DKC PR)

Capsys, a pre-fab builder founded in 1996, was paying $4 per square foot for its space in the Navy Yard, far below what other tenants were paying. The going rent, $20 per square foot, for manufacturing space at the Navy Yard is already set below market to retain firms that would otherwise not be able to afford to do business in the city. Upon learning in 2010 that their longterm lease was not being renewed, Capsys went hunting for new space.

The advantage of local prefab construction is cost and quality control. Building are constructed at the factory by (usually) nonunion workers. Architects can check in on the projects, correcting any flaws before the pieces are shipped.

Although rents are lower in New Jersey and Pennsylvania, being based locally cuts down on expensive overland shipping costs. Recently, though, new regulations require modular units to have an (expensive) police escort when the units are ferried to construction sites.

Modular B2, adjacent to the Barclays Center, is plagued with structural issues. (Courtesy SHoP)

Modular B2, adjacent to the Barclays Center, is plagued with structural issues. (Courtesy SHoP)

For almost ten years, Capsys was the only modular builder in the Navy Yard until Forest City Ratner moved its operations there. With new owners of Forest City’s Pacific Park, it looks like Forest City’s modular building operations may close, though this could be due less to rising rents and more to design issues that incur costs. The shortcomings of Pacific Park’s B2, the SHoP Architects–designed world’s tallest modular tower, have been widely documented.

Gorlin's Nehemiah townhouses (Courtesy AGA)

Gorlin’s Nehemiah townhouses (Courtesy AGA)

Capsys has designed 55 micro-apartments for Carmel Place (the building formerly known as adAPT NYC), and Alexander Gorlin’s Nehemiah townhouses, among other projects. When the company closes shop, Capsys will sell its intellectual property to a Pennsylvania company.

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