April 6, 2011

Sperling forms OneBuild to offer modular construction

Backed by 20 investors, Seattle commercial real estate veteran Dale Sperling is rolling out OneBuild to manufacture modules that can be used for multi-family housing and other projects.

Sperling

Sperling left Unico Properties two years ago as the head of the company, and quietly started OneBuild last year.

Today, he is announcing the private company has acquired the assets and ongoing operations of Integrated Building Solutions of Oregon in an all-stock transaction.

Seattle-based OneBuild will lease the company's 40,000-square-foot plant in Klamath Falls, Ore., and work with IBS' owners and managers to expand OneBuild.

Before Sperling left Unico, the Seattle real estate company announced it wanted to construct apartments using modular, pre-fabricated units that can be linked and stacked. A Unico spokesperson said those plans are on hold until economic conditions improve.

Sperling is passionate about the modular concept, which he says will transform the building industry.

“I didn't do this because I needed a place to land. I did this because I believe in it,” said Sperling, who's OneBuild's largest investor. He has some stock options but is not taking any compensation at this time.

Sperling said modular development can affordably meet the growing need for housing. The nation's population increased by about 30 million over the last decade, and the echo boom generation is starting households.

Building with robotic equipment in a controlled environment is more efficient and results in higher quality than traditional on-site construction, he said. Weather, for instance, isn't a factor. “We say it's sunny every day in our factory.”

Urban infill

The acquisition of IBS brings together two complementary partners. OneBuild will provide the corporate foundation, and access to the Puget Sound market through its background in real estate and development in Washington and Oregon.

Sperling said IBS has considerable experience making modules for small-scale, wood-frame construction. OneBuild will continue that while focusing on multi-family and large-scale projects.

“The sweet spot for us is urban infill multi-family,” Sperling said, though student housing and lodging are also possibilities.

OneBuild will also manufacture single-family detached houses.

OneBuild already is working with developers in Washington, Oregon and Colorado on two for-rent projects and a resort. Together they total about 200 units. Sperling declined to name the developers.

OneBuild's integrated delivery system is intended to help architects and contractors. The company is working with several Seattle-area companies, including Charter Construction, Runberg Architecture Group and HyBrid Architecture.

About 20 people work at the Klamath Falls plant today. Sperling said he expects the number of employees will grow to about 60 in three to five years as OneBuild customers see how the process speeds up construction and increases quality while holding down costs.

The price of the units can vary from $80 to $250 a square foot depending on amenities, Sperling said.

Serendipity

The chance to pursue his passion for modular construction after leaving Unico “just sort of fell into my lap,” Sperling said, when he got a good deal on some high-tech manufacturing equipment that a bank had taken back.

He planned to open a plant in the greater Seattle area, and hired people from IBS to find a manufacturing facility. They found one good option, but the landlord wanted to sell rather than rent and wouldn't budge.

“I've never worked so hard to lease a vacant building in my life,” Sperling said.

Finally, IBS officials suggested that Sperling form a joint venture with them. He countered with an offer to buy IBS for half cash, half stock.

“They said, ‘We'll take all stock, thank you very much,'” said Sperling. “It was a huge endorsement.”

Sperling's biggest challenge was raising money while the economy struggled. OneBuild raised $1 million in seed money to launch the company, and has closed an initial funding round of more than $3 million from private investors, mostly friends and family.

Chuck Collins chairs OneBuild's board. He's the former president and CEO of Colsper Corp. and Mohave Disposal, and was director of King County Metro transit. Banker Tom Cleveland, director of Haydrian Corp., and Bill Carruthers, a principal of the real estate development company Asani LLC, are directors along with Sperling, who is the president and CEO.

Tim Way is the CFO and IBS's John Mick is vice president of operations. Other managers are IBS's Doug Jackson and Roger Kowash.