Founders of modular builder Guerdon buy company assets, form new business

Dive Brief:

Modular manufacturer Guerdon Enterprises LLC (GELLC) founders Lad Dawson and Mike Bowers have purchased most of the company's assets for an undisclosed price in a foreclosure auction forced by its lender, Main Street Capital Corp., and have formed a new company, Guerdon LLC (Guerdon). In addition to Dawson and Bowers, who are contributing equity capital, the investor group also includes Innovatus Capital Partners, which will provide working capital for the new enterprise.
John Beddow, who served as CEO at GELLC for the last year and a half, will lead Guerdon as its CEO as well. The new company is poised, according to Dawson, to capitalize on the strained labor markets and rising construction costs in the West Coast market, where the opportunities are plentiful for offsite, factory construction options. The expertise, relationships and financial resources of Guerdon, Bowers said, should create a path for the business's accelerated growth.
Dawson and Bowers founded Boise, Idaho-based GELLC in 2001 and sold it in 2014. Dawson stayed on as CEO until his retirement in 2016. During GELLC's history, the company completed more than 200 projects — including hotels and multifamily, workforce and student housing — in the Western U.S. and Canada. GELLC was also an approved supplier for the Marriott, Hilton and Hyatt hotel chains and, from 2015 through 2019, GELLC completed more than 70% of modular hotels in the U.S. for these brands.

Dive Insight:

According to The Idaho Statesman, it’s unclear what caused GELLC's financial problems leading to foreclosure and that the original company did not file for bankruptcy.

In July 2018, modular builder Skender announced the opening of a new manufacturing facility in Chicago, and, at the same time, hired Peter Murray, former president and COO of Guerdon Modular Buildings, which was part of GELLC, as president of manufacturing. Murray spent 2015 to 2016 at Guerdon before starting a consultancy.

Hotels lend themselves to modular construction, as do apartment buildings and assisted living projects, because the repetitive unit designs are a natural fit for factory construction. Some projects GELLC counts in its portfolio are:

Two AC Hotels by Marriott in Oklahoma and California.
Domain, a 430-unit apartment complex in San Jose, California.
The Canyons Retirement Community in Twin Falls, Idaho.

Given the opportunities for modular construction in the hotel industry, it's no surprise that other modular companies are making a play for their share of the business. In September, Z Modular offered hospitality industry owners and developers the chance to convert the plans for any hotel project from traditional construction to modular for $20,000, a 60% discount from its standard fee of $50,000.

The conversion, which came with a 10-day turnaround time, included a parametric Revit model; an MEP (mechanical, electrical and plumbing) design; an order of magnitude with an estimated price per square foot; project schedule; and a conceptual floor plan.