Mass Customization of Multifamily Units

by Joe Stampone on July 20, 2010

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One aspect of the real estate industry that appeals to me is the innovation in construction practices and materials that constantly redefines how buildings are built and marketed.

I recently read in Bisnow about mass customization of multi-family housing. Under construction, a series of developers are creating a 9-unit prototype building in Cambridge, Mass which adjust to a residents lifestyle. As families grow and change they are often forced to move due to impractical layout of their apartments. Now residents will be able to change the interior layout without going through the hassle of having to renovate.  With mass customization, they can simply have a crew come in to move the walls, plug them into the new mechanicals and all of the sudden you have a bigger living room or a study that converts into a bedroom.

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The wall, built of sheetrock and studs, is a self-contained panel and is set on risers so it’s stable, but it’s easily relocated to dozens of other spots. Developer Ling Yi explains that one apartment has about three dozen possible layouts (those are the floorplans on the wall). Ling created software that designs the component parts with mechanicals to support them. With a supply chain that has links in China, all said, total development cost is about 5% less than traditional construction methods while rents remain at market rate.

Just as I’m a big supporter of pre-fabricated construction I believe that innovations such as mass customization are great for the industry. With such flexibility developers can market to a much wider audience and condo owners will likely experience extend holding periods.

What issues or concerns do you have about mass customization?

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  • http://twitter.com/MMJacquard Marguerite A. McAfee

    Considering it is much less expensive to keep a tenant in place and impose a rent hike annually than it is to find a new tenant, this has upside for landlords. Tenants who might be inclined to move to get an extra bedroom could be accommodated with very little cost to the investor.

    Mass customization of multi-family housing could be very useful to the student housing sector, where students might consider living in a dorm in lieu of renting a house if the dorm room could be made more suitable for multiple inhabitants.

  • http://www.astudentoftherealestategame.com/ Joe Stampone

    Marguerite thanks for your comments. I agree, particularly looking at the student and recent graduate sector, a landlord can adjust room sizes to accommodate kids who are either looking to pay more or less within a unit. Say you and a few friends are looking for an apartment but you want to pay less than your friends. By adjusting units to different sized bedrooms, this can be accomplished.

    There are a ton of opportunities for landlords and developers using mass customization.

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  • Chris Clark

    I’m all for new construction and like the flexibility of this.  What I’d rather see is some cost effective way to update older buildings…though that may not be necessary anymore.  I hear a lot of those are being torn down for the scrap value of some of the materials which are worth a lot now. 

  • http://www.astudentoftherealestategame.com/ Joe Stampone

    I agree, Chris. The opportunity in this country certainly lies with
    rebuilding and improving the existing building stock. It’s not a good sign
    when buildings are worth more torn down. We need to re-instill a sense of
    place in our towns and cities.

  • Chris Clark

    If you come across any new ways to update old buildings, would be interested in that. You have to think someone is going to figure it out…