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| Modular Building
Pros and Cons |
Probably the most compelling reason why companies turn to modular buildings is the speed of construction.
A standard five thousand square foot building like a medical clinic can be erected in as little as 45 days vs.
the 6-month timeframe for traditionally built buildings. Faster construction means that a company can generate
revenue more quickly and start paying for overhead costs sooner.
Modular buildings are also less expensive than conventionally built buildings. Much of the savings comes from the
standardization of the engineering process, bulk purchase of building materials and the controlled factory construction
environment. Where you might pay $100 to $130 per
square foot for a site-built medical clinic, modular building pricing can range from $55 to $60 per square foot,
including installation. The actual price you will pay for your specific building can be dramatically higher or lower
than these ranges. However, you can always expect to pay less than you would for a traditionally built building.
Prefab modular buildings can also be relocated. This can certainly work to your advantage if you anticipate having to move
sites. That way, you do not have to re-invest in constructing another building from scratch, with all its related costs.
There are also tax savings related to modular buildings, particularly around leasing a building instead of buying one.
Even if you choose to purchase a modular building, you can benefit from a more favorable depreciation schedule.
Traditional building costs are usually amortized over 35 years. Modular buildings can be recognized under an accelerated
depreciation schedule of 7 or 12 years, which can be a real unheralded benefit. Make sure to consult your accountant about
your specific situation before making a final decision.
Drawbacks of modular buildings
The primary drawback of modular buildings concerns its look and feel. If you want a highly customized, architectural look to
your building, modular buildings may not be well suited for you. However, it should be noted, that there has been
an increasing trend to permanent modular buildings where a portion of the construction is done on site to create a more
custom look. Modular buildings are now often built to match seamlessly with existing buildings’ appearance.
Basic modular construction elements like the elevated entrance and somewhat shorter ceilings can make the buildings look
less stylish. While there are certainly ways to address these design elements, doing so can increase your overall building
costs.
For those used to seeing a building constructed in front of your eyes, the modular building process can also be somewhat
disconcerting. Rest assured that modular buildings use the same building materials and must meet the same federal, state,
and local buildings codes as conventional site-built construction. In fact, quality is higher as construction takes place
in an environment controlled facility as opposed to out in the open where the elements can effect the construction process.
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