By this time next year, Katerra—a technology startup whose end-to-end business model combines prefabrication, architectural, and construction services primarily for multifamily housing—expects to have six manufacturing plants up and running, including its first mass timber factory, a 250,000-sf building under construction on 29 acres in Spokane, Wash.
That plant, when fully operational in early 2019, will be capable of producing about 4.6 million cubic feet of cross-laminated timber annually. The plant’s size is comparable to CLT factories operating in Europe. “We’re going all in on CLT,” says Trevor Schick, who oversees Katerra’s supply chain, lighting, renovation, and commercial rollout activities.
Katerra’s initial success—it booked $1.3 billion in business last year—and its aggressive growth posture have attracted several high-profile investors, most prominently Japan’s SoftBank, from whose $100 billion Vision Fund Katerra recently raised $865 million in its latest round of financing.
SoftBank is steadily investing in tech-oriented companies that are impacting the built environment. In December, it paid $9.3 billion to acquire a 15% stake in Uber Technologies. It owns the robotics manufacturer and research firm Boston Dynamics. Last summer, SoftBank invested $200 million in the indoor farming enterprise Plenty. And it holds a $4.4 billion stake in WeWork, the cosharing office developer.
TechCrunch reported that the venture-capital world fully expects SoftBank to raise another $100 billion for future investments soon.
In-house design team and consortium
The Menlo Park, Calif.-based Katerra is already among the country’s largest GCs. The housing markets it serves include multifamily, senior and student living, and master-planned developments. Katerra’s largest customer is The Wolff Company, a real estate private equity firm that focuses on the multifamily sector, and whose executive chairman Fritz Wolff was one of Katerra’s Co-founders.
“Having a lead customer is important, given the investment we’re making in factories, IT, and so forth,” says Schick.
Katerra currently produces wall panels, roof and floor trusses, cabinets, and countertops from its factory in Phoenix, which began production in early 2017. That facility features Katerra’s Design Showroom, where clients can view a full suite of products and interior design solutions, including fully finished apartment units made entirely from Katerra-supplied products.
Union Bay South in Carson, Calif., designed by Architects Orange, will offer 357 residential units, with four- and five-story wood framed buildings wrapping two separate concrete parking structures. The building, currently under construction, will include 30,000 sf of retail. Katerra is providing construction, management, and materials. Image: Katerra
Last June, Katerra acquired Nystrom Olson, a boutique architectural studio in Spokane. And six months later, it announced the forming of a design consortium whose members include Michael Green of Michael Green Architecture, a leader in mass timber architectural design; Andrea Leers of Boston-based Leers Weinzapfel Associates, which has also designed buildings using mass timber; Ted Flato of Lake|Flato in Texas; and Joe Greco of Lord Aeck Sargent, a full-service architecture and design firm with six offices.
With Green, Katerra is working on the design and construction of the new Hospitality Center in association with the Community Cancer Fund, Ronald McDonald House and Kootenai Health (Walden House) in Coeur d’Alene, Idaho.
Schick tells BD+C that, aside from the CLT plant in Washington, the other facilities Katerra moves into or builds this year will be conventional wood panel and truss factories. Its next mass timber plant is likely to be located in the Southeastern U.S., although Schick didn’t say when construction for that might start.
Leaning toward mass production
Katerra started as a materials supplier, with sourcing offices in Asia and Mexico. But the company soon realized that it needed a “larger scale” to get its cost model right, says Schick. That meant taking more control over the design, production, construction, and logistics of what it sold.
Technology has been the key to that transformation. Before joining Katerra, Schick spent over 15 years in the electronics industry, most recently as senior vice president at Hewlett-Packard involved in global supply chain and quality. One of Katerra’s Co-founders, Michael Marks, had been CEO of an electronics company now called Flex. A third Co-founder, Jim Davidson, founded Silver Lake, a technology investment firm.
Marks is convinced that building construction would benefit greatly from mass production techniques that are common in electronics and automotive manufacturing. Consequently, Katerra uses a kit-of-parts design system that it combines with prefabricated components production and onsite assembly.
The company’s technology platforms include SAP HANA, a market analytics platform that mines data from real estate and construction; a mobile app that connects its workforce in the field; and industrial IoT tools that optimize jobsite activity and track inventory.
Katerra is building its first mass timber factory, a 250,000-sf building in Spokane, Wash., which will be able to produce 4.6 million cubic feet of product annually. Image: Katerra
Schick says the company currently has 12 multifamily projects under way, ranging from 200 to 400 housing units per project. Sometime this year, he says the company plans to enter the hotel construction sector. Katerra also wants to build schools eventually.
As for projects using mass timber, Schick believes that demand among developers, contractors, and cities can only go up. He notes that the International Code Council has a vote scheduled for April to amend the 2021 International Building Code to allow for the use of CLT for buildings up to 18 stories. (Currently, CLT is limited in the U.S. to buildings no higher than six stories.)
In Washington State, ESB Bill 5450, which has passed both chambers of the legislature and is on the governor’s desk to sign, creates a section in the state statute defining qualifying mass timber products. It also directs the State Building Code Council to adopt rules for the use of mass timber in residential and commercial building, consistent with application national and international standards.
Katerra is already doing fire, earthquake, and wind sheer testing of CLT panels that it can make on its 60-foot-long by 12-foot-wide press.
Related Stories
MFPRO+ New Projects | Oct 30, 2024
BIG’s One High Line finally reaches completion in New York City’s West Chelsea neighborhood
One High Line, a luxury residential project spanning a full city block in New York’s West Chelsea neighborhood, reached completion this summer following years of delays related to investor lawsuits.
MFPRO+ New Projects | Oct 30, 2024
Luxury waterfront tower in Brooklyn features East River and Manhattan skyline views
Leasing recently began for The Dupont, a 41-story luxury rental property along the Brooklyn, N.Y., waterfront. Located within the 22-acre Greenpoint Landing, where it overlooks the newly constructed Newtown Barge Park, the high-rise features East River and Manhattan skyline views along with 20,000 sf of indoor and outdoor communal space.
Multifamily Housing | Oct 28, 2024
A case for mid-rise: How multifamily housing can reshape our cities
Often referred to as “five-over-ones,” the mid-rise apartment type is typically comprised of five stories of apartments on top of a concrete “podium” of ground-floor retail. The main criticism of the “five-over-one” is that they are often too predictable.
Adaptive Reuse | Oct 22, 2024
Adaptive reuse project transforms 1840s-era mill building into rental housing
A recently opened multifamily property in Lawrence, Mass., is an adaptive reuse of an 1840s-era mill building. Stone Mill Lofts is one of the first all-electric mixed-income multifamily properties in Massachusetts. The all-electric building meets ambitious modern energy codes and stringent National Park Service historic preservation guidelines.
MFPRO+ News | Oct 22, 2024
Project financing tempers robust demand for multifamily housing
AEC Giants with multifamily practices report that the sector has been struggling over the past year, despite the high demand for housing, especially affordable products.
Products and Materials | Oct 17, 2024
5 multifamily tech products for your next project
Multifamily housing and technological upgrades go hand-in-hand. From the rise in electric vehicle charging needs to the sophistication of smart home accessories, tech products are abound in the multifamily space.
Codes and Standards | Oct 16, 2024
North Carolina’s code policies likely worsened damage caused by Hurricane Helene
The North Carolina Legislature’s rejection of building code updates likely worsened the damage caused by Hurricane Helene, code experts say. Over the past 15 years, lawmakers rejected limits on construction on steep slopes, which might have reduced the number of homes destroyed by landslides.
MFPRO+ News | Oct 16, 2024
One-third of young adults say hurricanes like Helene and Milton will impact where they choose to live
Nearly one-third of U.S. residents between 18 and 34 years old say they are reconsidering where they want to move after seeing the damage wrought by Hurricane Helene, according to a Redfin report. About 15% of those over age 35 echoed their younger cohort’s sentiment.
Student Housing | Oct 9, 2024
University of Maryland begins work on $148 million graduate student housing development
The University of Maryland, in partnership with Campus Apartments and Mosaic Development Partners, has broken ground on a $148.75 million graduate student housing project on the university’s flagship College Park campus. The project will add 741 beds in 465 fully furnished apartments.
MFPRO+ News | Oct 9, 2024
San Francisco unveils guidelines to streamline office-to-residential conversions
The San Francisco Department of Building Inspection announced a series of new building code guidelines clarifying adaptive reuse code provisions and exceptions for converting office-to-residential buildings. Developed in response to the Commercial to Residential Adaptive Reuse program established in July 2023, the guidelines aim to increase the viability of converting underutilized office buildings into housing by reducing regulatory barriers in specific zoning districts downtown.