Unicorn design/build company Katerra is continuing its impressive expansion from start-up to $3 billion tech-and-construction giant with the recent acquisition of Vancouver’s Michael Green Architecture (MGA). The Canadian architecture studio is known for pushing the boundaries of timber construction (including some of the largest mass timber buildings in the U.S.), and Katerra reportedly wants to use their expertise to bring down construction costs as well as better understand the material.
The key to Katerra’s success lies in its vertically integrated business model; the company moves its projects through a single pipeline and handles everything from design, to engineering, to construction, using prefabricated modules to standardize the process. With $1.3 billion in projects under various stages of development–many of which are already framed with mass timber–the company is constantly searching for ways to optimize its production. Before acquiring MGA, Katerra was already hard at work building out their 250,000-square-foot cross-laminated timber (CLT) panel factory in Spokane, Washington.
MGA had been an early adopter in the mass timber construction game, and the firm, jointly based in Portland, Oregon, as well as British Columbia, has continued to push timber towers taller. Joining Katerra, was for the 25-person studio, a natural progression according to founder Michael Green. It also happens to align the weight and financing of a major Silicon Valley player behind the studio.
“Two values convinced me to join with Katerra,” Green told Vancouver magazine, “addressing our impact on the climate and making good architecture affordable. This acquisition gives us the opportunity to address both of those issues at scale.”
Through the use of mass customization (using a kit of parts to design distinct buildings instead of a “one size fits all” modular approach) and mass timber, Katerra is hoping to lower its construction costs by up to 30 percent. While land prices are typically the largest slice of the development cost pie, Katerra is bringing down both its material as well as labor costs. But the choice was about more than that, according to Katerra’s head of architecture, Craig Curtis. In order for the company to continue expanding, it would need to bring aboard more design talent, and MGA has had experience with timber buildings of all scales. On MGA’s side, Katerra won’t be fully consuming their practice, and the firm will still handle a stable of its own projects independently.