One of the co-founders of Juno -- a new mass-timber and modular housing company -- was recently interviewed by Dezeen. Prior to cofounding Juno, BJ Siegel was Apple's design director and spent 19 years designing and working on their stores. And so this is the lens that he and his partners are bringing to the real estate development space. (I also just learned this morning that their head of real estate is a former classmate of mine from Penn.) Here is an excerpt from the Dezeen article that speaks to their goal of productizing the delivery of new housing:
The third is Apple really challenged us to think about the way we deliver the project more like the way they deliver products through a kind of owner-furnished direct source supply chain model.
And that actually spurred a lot of investigation as to how to translate that work from a product into this industry [real estate development], which is really kind of not focused on that.
So that really was a big, big focus.
The company recently announced that they have broken ground on their first project in Austin, Texas. It is a five storey 24-unit residential project that is being positioned as "middle-income, market-rate" housing. They've reduced the building down to about 33 standardized parts and are using a secret type of mass timber that is manufactured in the US. Supposedly it's better than cross-laminated timber, but the company is keeping it as part of their secrete sauce right now.
Juno is not the first company to identify this gaping problem in the development and construction space. The typical construction process is antiquated, inefficient, and filled with far too much waste. Which is why modular / pre-fabricated housing has been a goal of architects, builders and others for generations. Eventually we will figure out how to better productize the delivery of new housing and bring down its costs. And in my view that will be a great thing for consumers.
Rendering by Engraff Studio via Dezeen
My friend Christopher Bibby sent me this article over the weekend. It's by Brian Potter -- who writes an excellent newsletter on Substack about construction things -- and it's about why it's so hard to innovate in construction.
To explain this, he starts by showing that the distribution of cost outcomes in construction projects tend to be both skewed toward the right and "fat tailed."
What does this mean? It means that construction projects have a tendency to run over a budget. And that they are much more likely to be over budget than under budget (right-skewed distribution). According to some data from the US Navy, the difference in likelihood is 10x.
At the same time, there are also instances where projects don't just run over budget, they run really over budget (fat tail). All of this is different from your normal distribution where you have a symmetrical curve and thin tails. I guess construction isn't normal.
One of the reasons for this abnormal distribution is the fact that construction suffers from what Brian calls "cascading failures." This is kind of intuitive, but it is everything in construction: In order to complete Y, you need to complete X. If X is delayed, then everything is delayed.
Because of these dynamics, changes to the construction process are perceived as incredibly risky. This has created a bias toward incremental rather than fundamental innovations.
For the full article, click here. It's worth a read.
Last week I wrote about a project in New York by DDG Partners called 100 Franklin. If you missed it, go here.
I didn't, however, say much about the developer. Though at the time I was wondering why their website was no longer up.
DDG Partners is a firm that I have written about several times over the years. They are a firm that I have always admired because of 1) their commitment to design and 2) their vertically-integrated approach to development. They do things like design, construction, and asset management all in-house.
So I was interested to learn that back in May they announced a merger with French real estate firm, GS Invest. Prior to the union, GS had a portfolio of more than 3 million square feet across Europe. The new investment and development company is called Azur.
Also interesting is the fact that Azur has started making proptech investments. Their first investment is in a company called Whiterock AI.
For more about Azur, click here.
One of the co-founders of Juno -- a new mass-timber and modular housing company -- was recently interviewed by Dezeen. Prior to cofounding Juno, BJ Siegel was Apple's design director and spent 19 years designing and working on their stores. And so this is the lens that he and his partners are bringing to the real estate development space. (I also just learned this morning that their head of real estate is a former classmate of mine from Penn.) Here is an excerpt from the Dezeen article that speaks to their goal of productizing the delivery of new housing:
The third is Apple really challenged us to think about the way we deliver the project more like the way they deliver products through a kind of owner-furnished direct source supply chain model.
And that actually spurred a lot of investigation as to how to translate that work from a product into this industry [real estate development], which is really kind of not focused on that.
So that really was a big, big focus.
The company recently announced that they have broken ground on their first project in Austin, Texas. It is a five storey 24-unit residential project that is being positioned as "middle-income, market-rate" housing. They've reduced the building down to about 33 standardized parts and are using a secret type of mass timber that is manufactured in the US. Supposedly it's better than cross-laminated timber, but the company is keeping it as part of their secrete sauce right now.
Juno is not the first company to identify this gaping problem in the development and construction space. The typical construction process is antiquated, inefficient, and filled with far too much waste. Which is why modular / pre-fabricated housing has been a goal of architects, builders and others for generations. Eventually we will figure out how to better productize the delivery of new housing and bring down its costs. And in my view that will be a great thing for consumers.
Rendering by Engraff Studio via Dezeen
My friend Christopher Bibby sent me this article over the weekend. It's by Brian Potter -- who writes an excellent newsletter on Substack about construction things -- and it's about why it's so hard to innovate in construction.
To explain this, he starts by showing that the distribution of cost outcomes in construction projects tend to be both skewed toward the right and "fat tailed."
What does this mean? It means that construction projects have a tendency to run over a budget. And that they are much more likely to be over budget than under budget (right-skewed distribution). According to some data from the US Navy, the difference in likelihood is 10x.
At the same time, there are also instances where projects don't just run over budget, they run really over budget (fat tail). All of this is different from your normal distribution where you have a symmetrical curve and thin tails. I guess construction isn't normal.
One of the reasons for this abnormal distribution is the fact that construction suffers from what Brian calls "cascading failures." This is kind of intuitive, but it is everything in construction: In order to complete Y, you need to complete X. If X is delayed, then everything is delayed.
Because of these dynamics, changes to the construction process are perceived as incredibly risky. This has created a bias toward incremental rather than fundamental innovations.
For the full article, click here. It's worth a read.
Last week I wrote about a project in New York by DDG Partners called 100 Franklin. If you missed it, go here.
I didn't, however, say much about the developer. Though at the time I was wondering why their website was no longer up.
DDG Partners is a firm that I have written about several times over the years. They are a firm that I have always admired because of 1) their commitment to design and 2) their vertically-integrated approach to development. They do things like design, construction, and asset management all in-house.
So I was interested to learn that back in May they announced a merger with French real estate firm, GS Invest. Prior to the union, GS had a portfolio of more than 3 million square feet across Europe. The new investment and development company is called Azur.
Also interesting is the fact that Azur has started making proptech investments. Their first investment is in a company called Whiterock AI.
For more about Azur, click here.
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