Most Americans now accept that the country’s housing shortage, and especially the lack of affordable housing, is no longer just a challenge, but a major crisis. Housing experts argue that the only way forward is to forge a way out of the situation. But it is also difficult, given supply chain disruptions, labor shortages and increased material costs.
Amidst these conditions, Alfonso Medina, Co-Founder and CEO of Madeleine Group, has no doubt that the only way to provide the necessary housing at an affordable price is by leveraging technology and using prefabricated and modular construction to make the development “produced”. ” To do. Process.
“Right now, developers are wheeling each time they start a new housing project, which is not only inefficient but also costly,” says Medina. “And as development costs keep rising, the only way to pencil projects is to make rents more expensive until we find a way to streamline and automate the whole process.”
With that goal in mind, Madelon Group recently designed a new technology platform that facilitates a seamless start-to-finish approach to multi-family development through prefabricated and modular development. The REDtech platform was built for a wide range of users, including both market-rate multifamily and affordable housing developers, with the goal of helping them achieve their goals, whether that be maximizing returns for investors or renting. make it more affordable.
Standardizing and automating pre-development
Denver-based Blue Room Investing is the first organization to use REDtech. Impact investment firm has partnered with the Madelon Group to develop a mixed-use, affordable housing project using the proptech platform. Building on a five-story, 40,000-sq. Construction will start at the end of this year.
With REDtech, users can analyze, design and execute a new project significantly faster and easier than using traditional methods. By leveraging the platform, multifamily developers and affordable housing agencies can easily underwrite a new project – estimating its feasibility, development cost and construction timeline.
REDtech allows users to visualize what a property will look like inside and out, create an offer memorandum for land and evaluate operating costs. The platform can connect developers with one of Madelon Group’s trusted factory partners, source the credit needed to fund a project, and identify asset managers who can oversee post-development of the property. Huh.
Medina says RedTech is especially useful for developers who are trying to figure out how to make math work for small, infill projects. The platform minimizes the amount of time and resources required for pre-planning and pre-construction, which directly affects a project’s budget and developer’s return on investment.
replication process for development
Blue Room Investing’s project in Denver, called Liminal Space, will offer 64 well-equipped micro studios with a total area of 35,000 square meters. ft. and 5,000 sq. Foot of a ground-floor retail space in Denver’s Santa Fe Arts District.
Sharon Schneider says, “The REDtech platform for Blue Room is so powerful that it takes a lot of data and crunches it, hence the decision-making process about a piece of land and what can be developed on it, It’s extremely efficient.” Chairman of the Blue Room Investing Housing Initiative.
Of equal importance is REDtech’s ability to determine a project’s customized floor plan based on modular and replica models, pre-designed in conjunction with Madeleine Group’s factory partners. In the case of Liminal Spaces, Blue Room will use Indianwell, a Pueblo, Colo.-based company focused on sustainable prefab construction.
Schneider points out that hotel developers have had tremendous success with modular and prefabricated development, but multifamily developers haven’t, mainly because they go a bit backwards about the design process.
“While multifamily developers have pursued modular design and prefab construction, they have done it in a very inefficient way,” says Schneider. “They start with a design and then try to break it down into a set of pieces that can be manufactured. REDtech’s platform is so innovative because it integrates design and manufacturing. It’s like using a bunch of different lego bricks and building a project with them. That’s what makes it so affordable and scalable. ,
It’s the economy and scalability that the Blue Room wants, Schneider says. “Our ultimate goal is to be able to provide quality housing in the state of Colorado that people can afford.”
In the Blue Room’s terminal space in Denver, all units come equipped with a private bathroom, a small kitchenette, plenty of storage/closet space, a bed with nightstand, and a living room with a sofa and storage surfaces. The units will lease for 50 percent of the area’s average income (AMI), or about $875 per month.
Schneider hopes the RedTech platform will help Blue Room Investing attract investors who want to maximize their returns, but not at the expense of the communities they are building.
“There is a growing segment of investors who want to help contribute to the solution of families burdened with rent,” she says. “Many of them are used to paying money and not getting any return. But if we can reduce the cost of developing new housing, we can pass that savings on in the form of lower rents and allow investors to get their money back and something extra.