"We can have that finished for you next week" is something you might expect to hear from a tailor or a computer repair shop, not a construction company. Yet Starbucks (NASDAQ: SBUX) and Nexii Building Solutions (Nexii) have achieved just that, having successfully built a new Starbucks drive-thru store in Vancouver in just six days' time. As modern technology advances the construction world, could this be the future of real estate development?
How did they do it?
Unlike traditional construction, which plans, designs, and constructs the building on-site, Nexii completed all elements of the development off-site prior to construction. The materials are created and assembled in the factory and sent to the actual development location as pre-built panels that need simple assembly. This reduces actual development time tremendously and eliminates common delays relating to construction.
The future of real estate development
This modular construction model is a great fit for restaurants, especially a drive-thru store like this one. These types of stores have relatively simple floor plans and designs. But it's likely this model could expand beyond the restaurant world. Nexii materials can be used for buildings of all heights and sizes and are suitable for commercial, industrial, mixed-use, multifamily residential, and single-family detached buildings, as well as for retrofitting existing buildings of all types, according to the company's website.
The building solutions technology used to design this Starbucks drive-thru can be applied at any scale. Large properties with more complicated designs will undoubtedly take more time to assemble, but this technology can still improve and reduce development costs and timeline for companies.
Another perk? These buildings created by Nexii are also environmentally friendly and have lower energy and maintenance costs. The U.S. Energy Information Administration found that 39% of energy consumption in 2019 was from residential and commercial buildings. Buildings also account for around 50% of global material use. With the new Biden administration's plan for a clean energy revolution and environmental justice in the works, it's likely any sort of green building initiatives will receive support, making it even more feasible and lucrative for the developer or investor who uses this new approach to green construction.
The Millionacres bottom line
It's not necessarily the specific company itself but the innovative approach to construction that will soon change the way real estate is developed. When the technology is there to support the process, and it actually makes sense financially, it's a no-brainer for developers to move in that direction. As awareness increases, more companies will be created to meet the needs of these savvy investors. Just like the transition from incandescent to LED light bulbs, efficiency and cost reduction are always a key driver of change, no matter what the industry.