Largest US Apt Owner Invests in Modular Homes

Greystar launches its first U.S. modular project in Pennsylvania, with six more developments on the way.

Jordan B. & Han-Gwon Lung
December 03, 2024

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Good morning. Greystar just unveiled its first U.S. modular apartment complex, a game-changer built 40% faster with 90% less waste. Could factory-built housing reshape the multifamily construction market? Let’s dive in.

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Market Snapshot

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Multifamily Construction

Biggest US Apartment Owner Invests in Modular Homes

Greystar, the largest apartment operator in the US, is bringing modular construction stateside with Ltd. Findlay, a 312-unit apartment complex in PA.

Some background: Greystar, headquartered in Charleston, South Carolina, oversees over 954,000 units across North America. After achieving modular construction success in the U.K., Andy Mest, managing director of Greystar’s modular business, sought to replicate that model stateside. In 2020, the company acquired a Pennsylvania manufacturing facility and launched its U.S. modular division, Modern Living Solutions.

A factory-built vision: Modules for Ltd. Findlay were built at Greystar’s Knox, Pennsylvania facility, 90 miles from the site, then assembled on location. Units were built 40% faster, with a third of the workforce and 90% less waste—at 10% lower costs. The 312-unit complex offers upscale amenities like a gym and amphitheater. Six more modular projects are planned within 600 miles of the Knox factory to boost efficiency.

Modular units assembled in Greystar’s Pennsylvania factory are transported to the building site and then stacked to form homes. Photo: Greystar

Why modular now? Modular construction, long associated with low-cost or emergency housing, builds standardized units in factories and assembles them on-site. With reduced timelines and bulk-purchased materials, it offers savings and efficiency amid rising labor and material costs.

Between the lines: While modular is growing—tripling its U.S. market share to 6.6% from 2015 to 2023—it still faces hurdles. Financing complexities, regulatory inconsistencies, and high transportation costs can deter developers. Greystar addressed these issues by building close to its factory and educating lenders on the method’s benefits.

➥ THE TAKEAWAY

The bigger picture: Industry experts, including McKinsey, predict modular revenues could skyrocket from $180 billion in 2022 to $1.1 trillion by 2040. As labor shortages and construction costs escalate, modular construction is poised to meet housing demands efficiently, with mainstream players like Greystar leading the way.

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✍️ Editor’s Picks

Credit crunch: Fitch downgraded Oakland’s credit rating two levels to A, citing widening deficits, surging public safety costs, and political instability, as the city struggles to stabilize its finances.
Debt expansion: Colliers expanded its credit facility to $2.25B and extended its maturity to 2029, signaling optimism for 2025 as the firm prepares for global growth through acquisitions.
Home equity surge: TPG Angelo Gordon sees a $2T opportunity in home equity lending as rising property values and high mortgage rates push demand for HELOCs and second-lien debt.
Kushner to France: Charles Kushner was nominated as US ambassador to France, marking another real estate executive’s entry into key roles under the new Trump administration.
Athletes in focus: Star athletes like Floyd Mayweather Jr. and Manu Ginobili are making bold real estate moves, from luxury rentals to affordable housing and mixed-use developments.

🏘️ MULTIFAMILY

Inventory disconnect: NYC’s housing market struggles not from a lack of supply but from a mismatch between outdated or overpriced inventory and buyer demand for modern, well-located homes.
Strategic acquisition: Caisson Capital Partners expands its heartland housing portfolio with the purchase of Parham Pointe Apartments, a 184-unit Class-B property in Midtown Little Rock, Arkansas. (sponsored)
Workforce housing wins: Workforce housing for moderate-income residents attracts institutional investors with strong demand and scalable opportunities, particularly in growing Sun Belt markets.
Multifamily momentum: Denver-based investors are driving a surge in multifamily deals, leveraging local expertise to secure assets like the Kabin Apartments and Beacon House.

🏭 Industrial

Industrial partnership: Tishman Speyer and Mitsui Fudosan secured an $85M loan to build two warehouses in Irvine, CA, marking a major step in their industrial development strategy.
Charlotte expansion: Digital Realty (DLR) purchased a 155-acre plot in Charlotte for $160M, hinting at plans for a fourth facility in the region as North Carolina’s data center market continues to grow.
EV investment surge: The Biden administration approved a $7.5B loan for StarPlus Energy’s EV battery plants in Indiana, bolstering U.S. lithium-ion production while creating thousands of jobs.
Sam’s closure: Walmart (WMT) is shutting down its Sam’s Club fulfillment center in Swedesboro, NJ, marking its second industrial property closure in South Jersey.

🏬 RETAIL

E-commerce surge: Black Friday spending rose 3.4% YoY, driven by a 14.6% jump in online sales, while in-store spending saw only slight growth, signaling a potentially strong holiday shopping season.
Big auctions: Five Big Lots (BIGGQ) leases in the Houston area, totaling over 150 KSF are set for auction as part of the retailer’s bankruptcy-driven restructuring.
Pro-mom-and-pop: San Francisco’s downtown is finding new life through a program that fills vacant storefronts with local businesses, creating vibrancy and drawing foot traffic back.
Retail play: AEW Capital Management acquired Bar W Marketplace, a fully leased, H-E-B-anchored retail center in Leander, TX, for $28M, amidst booming population growth and strong retail demand.

🏢 OFFICE

Legal lease surge: According to Savill, law firm office leasing is on the rise, driven by growing demand for high-quality spaces, rising construction costs, and a preference for in-person collaborations.
Major moves: Airbnb (ABNB) secured a 13.3 KSF lease at 130 Fifth Avenue, filling the historic building to full occupancy despite tensions with New York City policymakers.
Leasing resurgence: Manhattan office leasing surged past 30 MSF for the first time since 2019, bolstered by a 304 KSF WeWork-Amazon lease at 330 West 34th Street.

🏨 HOSPITALITY

Foreclosure fallout: Blackstone (BX) faces foreclosure on a $275M Club Quarters hotel portfolio spanning Chicago, San Francisco, Boston, and Philadelphia, as bondholders take control.

📈 CHART OF THE DAY

Law firm leasing activity surged nearly 30% YoY in 2024, with most firms renewing existing spaces as rising costs and limited high-quality options reduced relocations, according to Savills.