2020
Apr 21
  • Business
  • Modular Building

Modular Construction Costs: Getting the Budget Right

If you are calculating the cost of modular for the first time, be aware that many of the cost buckets belonging to modular construction are easily overlooked. In pricing your project, consider some of the unique modular construction costs, as well as per square foot costs that may be notably different in a hybrid modular/site-built project due to the dynamics of the integration. Below are some examples:

Logistics

The word “logistics” takes on a different meaning during preconstruction for a modular project. Logistics planning and risk management in a well-executed modular construction project require more than a typical construction site-planning and scheduling exercise.

Modular logistics planning and cost modeling require an understanding of the large object shipping industry and dynamics that can affect large-scale and phased deliveries in congested urban areas.  Whether modules are manufactured globally or domestically (there are pros and cons to each), this cost category will affect up to 20% of the total cost of a modular contract. For a predominantly modular building, properly evaluating this cost is critical to the quality of a proforma judgement.

Installation

Installation costs may differ greatly between module types and modular manufacturers. The cost of installation will depend heavily upon factors such as:

  • the size and type of modules used
  • whether modules are “stitched together” internally (to make larger units on-site)
  • the means of structural and MEP connections employed by the manufacturer
  • whether that manufacturer installs its product with in-house crews or whether the project requires a separate subcontractor to set, fit and finish the units on-site.
Total Cost

While modular construction may very well improve the efficiency and economics of a project, the above examples highlight some unique cost layers to consider in any comparative evaluation, whether your ultimate proforma relies on a per key or per square foot metric. 

Some of the terms and categories might be the same, but modular construction costs are less intuitive on a square foot basis at the outset, and are often best considered holistically under a total cost scenario, then backed into a square foot or square metre metric.

If you have a simple question, or require a more in-depth modular cost and risk management conversation, give us a call or send a note and we’ll be happy to help.