Phil Leibovitz (from left), Mimi Brodsky Kress, and Richard Mandell made their reputations building high-end custom homes, but they have long been fascinated with modular construction. Mandell built several modular houses in Colorado in the 1970s. Kress and Leibovitz developed a business that grafted modular second-floor additions onto ranch houses. Both efforts were short-lived, and their company, Sandy Spring Builders, has always focused on custom building, but the idea of modular construction kept popping up. The question, Mandell says, was “Where was the niche and where was the need?” Several years ago, they got their answer. Due to aging housing stock and soaring property values in its market, Sandy Spring was doing a lot of teardown projects. “We thought, ‘What if we could move you out, tear down your old house, build you a new one, and move you back in—all in less than six months?’” Mandell explains. Working with established modular manufacturer Haven Custom Homes and local architects, Sandy Spring developed a collection of modular house plans and a production system that meets the company’s high standard for construction quality. “We upgraded Haven’s specs and design criteria,” Mandell says, and Haven provided the manufacturing expertise. “We also allow Haven to sell our designs to other builders across the country,” for which “we get a licensing fee.”
Clients who go the modular route choose from a portfolio of plans and finalize material and product selections up front. In exchange, they save real money. “The hard cost is not that much different,” says Mandell of the six modulars the company has built thus far. “Where the savings in dollars comes to you is in overhead, supervision, engineering and architecture, and carrying costs.” With construction costs running from $750,000 to upward of $1.5 million, “there’s probably a couple hundred thousand dollars of savings.” The time savings are even more impressive: “Shovel-in-the-ground to move-in is four months,” he says.
The timing was advantageous for the company, which now generates 40 percent of its volume in modular projects. Recession-slowed traffic on the full-custom side freed up resources to make the transition, Mandell observes. “And when the market turns, we’re going to be in a wonderful position to take advantage of it.”
Sandy Spring Builders, Bethesda, Md.
sandyspringbuilders.com
Type of business: Custom builder
Years inbusiness: 28
Employees: 20
2009 volume: $15 million
2009 starts: 9
