This CEO uses factory-produced modules to make affordable housing
- Christian Lawrence, 29, is one of Business Insider’s Rising Stars of Real EstateFor 2022.
- Rise Modular is now a company of 150 employees with over 400 units under construction. It was founded by him in two years.
- Modular construction can make housing affordable by delivering units at lower costs, he says.
Christian Lawrence, 29, CEO of Rise Modular, a Minneapolis-based construction company, believes that modular construction may be the best way to build affordable multifamily housing.
Modular construction is the process of building a home at an off-site location, then assembling it on-site. It’s almost like LEGO pieces. At Rise, which specializes in multi-story and commercial real estate construction, this can mean building an entire floor of a home or apartment — including kitchens, bathrooms, and appliances — at its 150,000-square-foot warehouse and then transporting it to a job site for installation.
Lawrence stated that building homes on-site can reduce the time it takes for homes to be completed in areas where there is extreme weather. This is because the initial construction takes place indoors and away from the elements. It is also more efficient because workers can build the homes in an automated manner, rather than starting at each job site. Lawrence explained that economies of scale not only lower material costs but also reduce the amount of waste generated during construction.
Lawrence has transformed Rise Modular into a company that has completed more then 760 housing units by November 2022 in less than two and a-half years. Rise now has 150 employees and 400 units under construction.
Lawrence stated to Insider that there is a better way to build housing. “Everyone is aware of the challenges we face when it comes to high construction costs. But modular construction is the most innovative, sustainable and innovative solution we have.”
Lawrence explained that Rise Modular is primarily focused on apartment buildings, hotels, student housing and hotel developments. Lawrence said that other developers have called Rise Modular to assist with projects that would not be possible in a traditional construction setting.
Rise was instrumental in the completion of a seven-story, two-story apartment building with 192 units called Alvera Apartments, St. Paul in December 2021. according to the company’s website. Lawrence said that other developers approached Rise because they couldn’t figure out the numbers with a traditional contractor. Lawrence explained that Rise was able build the building with 154 modular pieces, saving at least five months in construction.
Lawrence said that modular construction can have an impact beyond construction sites. It can make housing more affordable for renters in a time of stagnant wages and inflation. Rents for Alvera studio and one-bedroom apartments start around $940 per month, and $1,375 each. according to the building’s website.
The median rent for a Minneapolis studio apartment is $300 per month. A one-bedroom apartment is $200 less. according to data from ApartmentList.com.
Lawrence stated that modular construction can provide housing at a lower price and deliver buildings more efficiently than traditional sticks-and bricks construction. It can also produce a better quality product that is more sustainable for the environment.
These apartments are also on the market at a time where real wages in Minneapolis have fallen due to inflation. According to data from the Federal Reserve Bank of MinneapolisThe November 2022 increase in wages in professional and construction services was 5%. However, consumer price data from the Bureau of Labor StatisticsThe November inflation rate was 5.3%, which means that workers saw their spending power decrease by 0.3% in the past year.
Lawrence said that Rise will become a leader within modular construction in the next three to 5 years. Although the process has been successful for decades in Europe and the United States, Lawrence stated that there are not many companies in the US who can take on this challenge, especially in the Midwest, where snow and cold can stop construction.
Lawrence stated that modular construction is a cost- and time-savings option.
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