Wednesday, November 18, 2015

Silicon Valley Developers Embracing Modular from Guerdon and Polcom

Sometime in the next two years or so, craftsmen in Poland will put the finishing touches on 263 individual hotel rooms, then stack them on a single container ship bound for the Port of Oakland. From there, they’ll be trucked to a vacant lot in Sunnyvale, where they will be unloaded one by one and assembled on-site into Northern California’s first Millennium Hotel. It will go up in about 12 weeks.


A similar prefab strategy will result in a 250-unit residential complex next door, but instead of a sea voyage, the apartments will take a six-day train trip from a factory in Idaho.


“We are not only challenging ourselves to build a new, different kind of hotel,” said Aloysius Lee, group chief executive officer for Millennium Hotels and Resorts, the London-based company behind the project. “We are also challenging ourselves in using new technology, a new methodology of building.”

The estimated $200 million development represents what could be the most ambitious modular construction effort yet undertaken in Silicon Valley. While prefabricated units have been used in a couple of apartment projects, the approach has not been used locally for a commercial building such as a hotel until now.

“It’s very unusual to hear about this in California,” said Alan X. Reay, president of Atlas Hospitality Advisors, who was familiar with only one or two modular hotel projects in the state.

It is also a major milestone for the region’s hospitality development scene, marking the arrival of a new hotel player with a different kind of product: A full-service, strikingly designed hotel that’s all about social spaces, executives said.


The project, which is working its way through Sunnyvale’s approval process, comes nearly a decade after Millennium first proposed a hotel-and-condo development on the site it has long owned, located at 1250 Lakeside Drive, looking out onto a small man-made lake. The economy’s revival and a corporate focus on growth are bringing it back now. But the new concept is substantially different in look and feel than the old one, with architecture firm NBBJ coming up with an ultramodern design that’s unlike the standard stucco-box aesthetic that has dominated multifamily and hotel development in recent years.

“In a way we’re starting late, but instead of building an old-fashioned conventional hotel we’re building something that meets this new need,” Lee said.

From the outside at ground level, the hotel appears as a solid slab of glass punctuated by vertical metal “fins,” its roof line rakishly angled. In aerial renderings, more comes into view: A courtyard dominates the center, and the roof is revealed to be a series of terraced outdoor sitting areas and gardens.

The emphasis on places to hang out is by design: The hotel will carry Millennium’s new “M Social” brand, which is designed to appeal to millennials who crave places to work out in the open, with lots of spots to gather with friends or coworkers for fun as well.

Lee says the concept is in keeping with a trend called “alone together,” in which guests seek public settings in which to do private work. “It probably best describes the Silicon Valley community,” Lee said. “They like to be alone, but they want to be seen. A good example is Starbucks, where people do their own work, but want to be seen.”

The rooftop programming was a no-brainer, he said. “We’re using the rooftop for the social space, stepping down all the way to overlook the lake,” Lee said. “This kind of building is suitable for California because the weather is beautiful year-round.”

The apartment component will also adhere to this concept. For instance, apartments will have “simplified” kitchens to create more open floor-plan units, with full chef’s kitchens in common areas for when heavier-duty cooking is needed, such as for parties. (Originally envisioned as condos, they will now be rental units.)

The decision to use modular construction methods was about speed as well as quality, Lee said, because it allows the dozens of trades to work on the units in factory-controlled environments. Polcom Modular, a Polish modular construction firm, will build the hotel rooms at its factory there. Guerdon Modular Buildings, based in Boise, Idaho, has been tapped to build the apartments.

“Theoretically it will save time, because we’re building the platform and common areas while 8,000 miles away someone is building the hotel rooms already,” he said. “Before any consideration of (cost) saving, we believe this is the way we go.”

Still, the method remains something of a rarity. Reay said he’s not been too impressed with the couple of projects he’s encountered using modular construction because of quality controls. But he said his experience is from years ago. “I will reserve judgment because maybe they’ve advanced tremendously,” he said.

Trudy Ryan, community development director for the city of Sunnyvale, said the city’s planners and inspectors have one experience with modular projects. “But what Millennium is talking about is at a little bit different scale,” she said. “They come pre-designed to comply with most of our codes, but then it’s really the exterior, the accessible ramps, and things of that nature that get more of the local sign-off and review.”

As for the distinctive building skin, that also serves a purpose: Millennium wants a light-filled interior, so it's designing a window wall that's essentially all glass. But that creates a heat effect called "solar gain," so the fins are designed to shade the building and help it meet green-building goals. "It’s all glass, and you’re exposed to the sun. So we need to build a second skin outside the facade," Lee said.

Millennium is part of the Singapore-based Millennium & Copthorne Hotels group, which operates about 120 properties worldwide. Millennium’s only other California hotel is the Millennium Biltmore Hotel in Los Angeles, a historic gem known for its marble fountains and frescoed mural ceilings.
The company tends to own its real estate, which is something of an outlier these days as hotel companies shift toward “asset light” models that are oriented toward management contracts. “We own around 70 properties and manage 50,” Lee said. “People think we’re asset-heavy. We call ourselves asset-right. If you own it, the return is good and you don’t depend on the mercy of the landlord, and you benefit in terms of asset appreciation long term.”

The M Social hotel will be a full-service property, bucking a development trend that has favored limited-service hotels, which do not have as extensive food and beverage programs. The property will include a 3,000-square-foot restaurant, a 5,300-square-foot banquet hall, 1,700 square feet of meeting rooms and two bars.

“We want it to be different,” Lee said. “We challenged ourselves in terms of design, because we want to make this become a destination of Silicon Valley.”

Millennium hopes to break ground on the project in mid 2016 and finish it by the end of 2017, assuming city approvals come in as expected.

From an article in the Silicon Valley Biz Journal

1 comment:

Doug Stimpson said...

Because of the weakness of our industry to promote ourselves we have successfully moved modular building offshore and eliminated job opportunities as well as opening up the opportunity for developers to question why this project was not built by an American modular company. And we all wonder why our plants are not running at capacity year round.