DHC Developments · For developers

Modular or conventional? Run it against your pro forma.

The decision is not about taste. It is about carry, certainty and where your risk sits. McKinsey puts modular at 20 to 50 per cent faster than traditional methods with up to 20 per cent cost savings — and, in the same breath, a risk of up to 10 per cent loss if delivery or material costs go wrong. Both halves of that are true, and which half you land on depends on the project.

Schedule

Time is the line item nobody puts on the schedule.

On a conventional build the sequence is linear and it all happens on your parcel. Foundations, frame, roof, close in, mechanicals, finishes — each waiting on the one before, each exposed to weather and to whoever is available that week.

Modular runs two programmes at once. Site work proceeds while the building is assembled indoors, and they meet on set day. That parallelism is the whole schedule argument, and it is why the industry figure lands between 20 and 50 per cent rather than a fixed number — the saving scales with how much of the building is repeatable.

On a development pro forma that time is not abstract. It is interest on the land loan, insurance, and a site generating nothing. Shortening construction by four months on a mid-size scheme usually moves the return more than any finish decision you will make.

Cost

Predictability is worth more than cheapness.

The honest framing is not that modular is cheaper. It is that modular is harder to get wrong after the design is frozen. Conventional builds absorb change through change orders; a modular build absorbs it by having settled the decisions before manufacturing starts.

That matters most where you cannot pass an overrun through. On an 8-30g scheme a defined share of units is let below market for decades — the rent is fixed, so a cost overrun has nowhere to go except your return. Predictable cost per unit is the entire game on those projects.

And the downside, stated plainly: McKinsey also found a risk of up to 10 per cent loss where delivery or material costs move against you. Modular concentrates risk into procurement and logistics rather than spreading it across a long site programme. That is a better trade on most projects, but it is a trade, not a free lunch.

Financing

Your draw schedule changes shape.

This is the practical difference lenders care about, and it catches developers out. On a conventional build, value accrues on your site where the bank can see it. On a modular build a large share of value sits in a factory before it ever reaches the parcel.

Lenders who have financed modular handle this routinely — the draw schedule simply follows manufacturing milestones rather than site milestones. Lenders who have not may need walking through it. Raise it at the term sheet stage, not at closing. It is the single most common avoidable delay on a first modular project.

Risk

Where the exposure actually moves.

Conventional construction spreads risk thinly across twelve or eighteen months of site activity: weather, trade availability, sequencing, theft, and the slow accumulation of small change orders nobody priced.

Modular concentrates it. Less weather exposure, less trade coordination, far fewer change orders — but a harder dependency on the factory schedule and on getting modules to the site. One blocked road matters more than it would on a stick-built job.

For most infill and multifamily work in this county that is the better shape of risk. On a remote parcel with poor access it may not be.

The honest part

Where conventional still wins.

Modular does not shorten entitlement. If a town takes nine months to approve your application, that is nine months either way. Every saving here is in construction.

It suits repetition. A building of similar units is where the factory earns its keep; a one-off with every floor different gives back most of the advantage.

It needs access — crane position, a road that takes a module delivery, workable grade. And it rewards developers who can commit to a design early. If your process is to decide as you go, conventional will be less painful and we will tell you so at the first pass rather than after you have bought the parcel.

Fit

Which projects we would say yes to.

Multifamily and townhome schemes with repeatable units, on parcels with reasonable access, in Fairfield County, Westchester or the Hudson Valley. Set-aside schemes under 8-30g where cost per unit decides the pro forma. Downtown and transit-adjacent infill where a compressed site programme is worth a premium on its own.

If your project is one of those, the fastest way to find out what it costs is to send us the parcel. We come back with a build cost band, a module count and a programme, at no charge and with no obligation.

If modular is the call, here is what we would be building — the Residences, the Kestrel and the Ashford, with module take-offs and delivery windows.