Senator Group - Financial Advantages: Case Study

Tuesday, December 06, 2022

Financial Advantages:Case Study

32 - Unit Apartment Building ( 4 stories )
You may be wondering what the financial advantages of building modularly are versus conventionally: below we compare building a 32unit apartment building with either method.*

Financial Advantages: Modular Construction Case Study

ITEM

Details

Build Time

(compressed vs. conventional building schedules)

Construction Cost
Financing

(assuming 1000 s.f. units, construction cost of $140 / s.f. & 8% finance rates)

Rental Income

(fast track to occupancy & revenue generation)

Overhead Savings

Resource Realignment

Project Simplicity

FACTORY - BUILT

Construction

6 months ( site servicing & plant manufacturing performed concurrently) Weather not a factor.

Savings = 32,000 s.f. X $140 / s.f. @ 8% annual construction finance rate = $179,200 over 6 months.

6 months @ $1000 / unit / month X 32 units = $192,000 in extra rental income.

5% - 10% over 6 months

6 months quicker - 2X project capability

Dealing with a single source = Simplicity

COVENTIONAL

Construction

12 months (site servicing followed by construction) or more depending on weather delays.

$179,200 in extra construction financing costs over 6 months of construction time.

$192,000 lost in rental income.

NONE

6 months slower - ½ X project capability.

Dealings with multiple sources and trades = Headaches

* Note: Above information is provided as an example and assumptions are made; the case study is demonstrative of real-world advantages of modular construction. Case study can be applied to other types of buildings such as hotels and residential buildings.

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