April 5, 2023 – Blokable has closed $5.5 million in additional funding led by existing investors Cercano Management (previously Vulcan Capital) and Kapor Capital.
“Supply chain shocks, inflation pressure, and turmoil in the banking system have exacerbated the generational crisis in housing access and affordability. Not only have real estate financing costs increased, labor and materials are more expensive,” said Blokable Co-CEO Nelson Del Rio. “Add to it the fact that soaring real estate costs will continue to outpace income growth, and it becomes clear that under a business-as-usual scenario, the market cannot supply nearly the amount of housing that society requires.”
“The per-door cost of new housing development can only be meaningfully reduced by tapping into the well-understood efficiencies of manufacturing,” continued Blokable Co-CEO Aaron Holm. “With an estimated 3.5 million new housing units needed in California alone by 2025, the market urgently needs a different approach. This is why Blokable has spent the past 6 years and invested over $30 million in R&D and prototyping to reframe the development process itself and to leverage the inherent efficiencies of advanced manufacturing through a platform we call Modular Development.”
Through its vertically integrated Modular Development platform, Blokable controls the entire real estate process, including design, planning, financing, permitting, manufacturing, delivery, and final assembly. To reduce build times and costs while setting a new standard for housing quality, Blokable created the Blokable Building System, which is designed for manufacturing and engineered to exceed the toughest building codes in the most demanding submarkets in the country.
With Modular Development, Blokable can produce all-electric, Net Zero Energy Ready housing that can meet the needs of different sites and development programs, including large-scale Class A market rate, urban infill, and affordable housing. In 2022 the U.S. National Renewable Energy Lab (NREL) independently tested the Blokable Building System and reported that Blokable’s development platform will be able to reduce 60% of greenhouse gas (GHG) emissions and 91% of material waste from net-zero housing development by the year 2030.
Blokable previously validated its engineering, assembly process, and costs with its Phoenix Rising pilot project in Auburn, Wash. The project cost 50% less than the regional cost per door to build and operates at a much lower cost to heat and cool than traditional buildings. Blokable is now ready to ramp up Modular Development and scale its manufacturing efforts to create needed multifamily housing, first in California and then across the country and around the world.
Modular Development can provide robust, long-term returns to investors due to technological and business model innovations that capture all wealth that the real estate development process can create from cost savings, development fees, refinance proceeds, operating cash flow, and asset sale proceeds. With Blokable’s ability to build cheaper, faster, and better, the equity value in its projects will be higher than traditional developments, especially as costs for conventional builds continue to escalate. When Blokable reaches full-scale advanced manufacturing, its next factory is expected to produce enough modular units (Bloks) to build over 2,000 apartments yearly with a projected aggregate market value of well over $1 billion. And with its highly scalable manufacturing process and building system, Blokable can expand into a network of factories across the country and worldwide.
At scale, Blokable’s platform can also provide affordable housing development at a fraction of traditional costs. Not only will this drive social equity by dramatically expanding housing opportunities for lower-income segments of the population, but through Blokable’s “Affordable To Own” program it will also enable wealth creation among underserved households and the community at no cost to Blokable or the government.
“Historically, real estate innovation has been misapplied, focusing on technology inputs that are easily commoditized and do not meaningfully reduce development costs,” said YB Choi, Partner at Cercano Management. “What’s unique about Blokable is that it has achieved the optimal application of innovation and technology into the value creation capabilities of real estate.”
“Real estate is the only product in the world that appreciates in value after it is completed,” added Del Rio. “With our Modular Development platform, Blokable is creating wealth for investors and communities by enabling them to participate in the appreciation of our core innovation. Unless you are creating value by developing and owning a brand new kind of multifamily real estate, you can’t return the investment that’s required to innovate in the housing sector.”
Blokable is a developer of multifamily real estate – widely considered the asset class with the most robust and attractive fundamentals – using a proprietary modular building system with cutting-edge technology and engineering that can build cheaper, faster, and better. And with Blokable’s highly innovative, vertically integrated business model, the company and its investors have the potential to capture the considerable value created by real estate development.
Blokable’s mission is to bring transformative economic, social, and environmental benefits to the world, revolutionizing development to fix the housing crisis and create wealth for investors, residents, and communities. The company’s breakthrough Modular Development™ platform can generate up to 30x the profits of product sales models followed by modular construction. It uses manufacturing and technological advances to compress development costs and time, reduce risks, eliminate unknowns, and organize an otherwise inefficient process. Blokable’s platform creates higher-quality, environmentally sustainable buildings while achieving efficiencies and scale the real estate industry has never known.