Greystar is ramping up production at a modular construction factory in a move that could help take middle-market senior housing to its next evolution in the future.
This week, the Charleston, South Carolina-based multifamily and senior housing operator, developer and builder announced the opening of a flagship manufacturing facility in western Pennsylvania supporting its modular apartment construction subsidiary, Modern Living Solutions.
Greystar is currently hiring 170 full-time employees to staff the new factory and execute the company’s plan to develop more “attainable and sustainable housing” using modular construction techniques.
The company’s Knox, Pennsylvania-based production facility is currently working on a handful of projects aimed at developing more middle-market housing, with an initial focus on housing for traditional multifamily renters.
By embracing modular construction, Greystar leaders believe the company can provide a high-quality — and crucially, and more affordable option — for apartment dwellers. And in the process, it can adopt a building practice that is more sustainable for the environment.
Like with many aspects of the multifamily industry, Greystar’s move could be a glimpse into senior living’s future.
Although the initial modular construction effort is only for multifamily apartments, Modern Living Solutions Managing Director Andy Mest said the company’s leaders do see potential for crossover between its burgeoning modular construction business and its active adult development business.
“Ultimately, the same fundamentals that make our off-site manufacturing approach attractive for multifamily – from conventional to student to active adult – would apply to senior housing,” Mest told Senior Housing News.
Beth Mace, who is chief economist at the National Investment Center for Seniors Housing & Care (NIC), said the new effort from Greystar could help pave the way for more cost-effective senior housing projects down the road. And if successful, it ultimately could help advance the greater effort to serve the industry’s millions of older adults in the “forgotten middle” demographic.
“For senior housing, I think it’s a great idea — if you can build things in a less expensive way, it makes it more affordable [for residents],” Mace told SHN.
Modern Living Solutions is not new, nor is the belief that modular senior housing is a potential way to meet the middle-market. But it is significant that a company as large as Greystar is forging ahead in the space. And the ramp-up coincides with the real estate company’s large and growing presence in the active adult segment, including with developer Headwaters Group.
Modular construction for the middle market
According to the real estate company, the practice of building apartment modules in a manufacturing facility and then assembling the finished product onsite offers many benefits over traditional construction methods.
For one, all of the modules are produced in an indoor and controlled environment, meaning they can be delivered up to 50% faster than traditional construction and with less external risk, according to Greystar. The practice utilizes sustainable designs, efficient usage of materials, and speed of construction, aiming for a smaller carbon footprint than more typical construction projects.
Initially, Greystar is planning to build out a project pipeline for modular apartments within a 500-mile radius of its manufacturing facility in western Pennsylvania. Projects underway include planned housing developments in Allegheny County, Pennsylvania; and Cecil County and Elkton, Maryland.
But beyond that, the “sky’s the limit” for other property types, according to Mest.
“There is a fundamental undersupply of housing in the US today, and this applies to all housing types,” he said. “Through our MLS factory, we see opportunity to provide better, less expensive, sustainable, and purpose-built options over the long-term, from students to seniors.”
Though Mest and Greystar did not elaborate on future plans, more growth is potentially on the way for Greystar’s modular apartments, including into other product types.
“With the opening of our Knox, Pennsylvania, facility, we are excited to deliver units for our initial projects in the mid-Atlantic region,” he said. “We look forward to scaling up with our new facility and are very optimistic about future growth.”
‘A topic for a long time’
Greystar’s effort is for now more focused on multifamily apartments. But it is a big step toward the industry’s stated goal of rapidly developing housing for the large and growing middle-income segment of older adults.
According to the latest update of the “Forgotten Middle” study by NORC at the University of Chicago, 15.9 million seniors will be considered middle market consumers in 10 years. The industry must move quickly if it hopes to meet that demand in time — and the clock is ticking with each passing year.
Of course, affordable multifamily communities are a long way off from middle-market assisted living. But Mace doesn’t think it’s a big leap to go from building multifamily apartments to certain types of senior housing, like active adult, given the similarities between the two product types.
“To go from workforce, affordable housing or essential housing to senior housing would be a pretty easy transition in the sense of the real estate,” Mace said.
That is not to say modular construction is not without challenges. Before Greystar, companies including Skender Manufacturing and Minka both tried to implement modular construction techniques into senior housing.
Cynthia Shonaiya, who is principal and senior living market sector leader with architecture firm Hord Coplan Macht, told SHN that “any construction method or process that addresses the challenge of managing construction costs, and schedules, is worth considering.”
But as worthwhile as they are to explore, she added that such efforts require careful planning.
“It takes discipline, and a higher level of coordination and quality control, to manufacture building components offsite that will then be assembled under real-world jobsite conditions,” she said. “Connections and systems that run between modules such pipes, ducts, wiring chases, et cetera, will need to be coordinated with a higher level of precision to align perfectly when assembled onsite.”
Hord Coplan Macht is currently working with Greystar on both active adult and multifamily projects, Shonaiya added.
Hillary DeGroff, associate principal at architecture firm Perkins Eastman, sees an opportunity for modular construction to help lower costs and create more affordable senior housing communities to support the middle market.
“With affordability, of course, operations costs come into play, so the less amenity spaces there are, the more the reduced costs can be passed along to the resident,” she told SHN. “[Active adult] could be a key market to start marrying the idea of modular construction practices.”
She noted that while there have been challenges historically around modular construction, there also have been many successes in other housing markets.
“The more interest and the more that gets built, the more strategies there will be in place to make this type of construction a success,” she said.
Looking ahead, NIC’s Mace sees a world in the not-too-distant future where modular building techniques are combined with a layer of services — potentially through partnerships with health care providers — to create a truly middle-market senior living community, not just residential housing suitable for seniors.
“What we’re starting to see is other middle-market investors and operators … partnering with others,’” Mace said. “It might be an MA plan for the health care component of it, or it might be working with more home care providers.”
But the bottom line is that Greystar’s effort is the beginning of a years-long exploration of middle-market senior housing through new and creative techniques such as modular construction.
“This will be a topic for a long time,” she said.
The post New Greystar Push Into Modular Construction Holds Promise for Middle-Market Senior Living appeared first on Senior Housing News.
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