Dive Brief:

• A Philadelphia-based multifamily modular construction firm received court approval last week to purchase Katerra's assets in Tracy, California, for $21.25 million, including the lease and tenant improvement of their manufacturing facility and offices there. Volumetric Building Companies will use the facility to manufacture windows, cabinetry, countertops, trusses and panelized building components within the next three months and has plans to produce modular housing components there next year, according to a release.
• Katerra also won court approval last week to sell its factory in Spokane, Washington, for $50 million after the company reported an uncontested initial offer for the facility, according to Bloomberg Law.
• Katerra filed for bankruptcy protection in early June and the transactions are part of a court-supervised sale of its assets.

Dive Insight:

Modular builder VBC offers architecture, logistics, manufacturing and construction services to produce multifamily housing in less time than traditional construction techniques, according to its website. Its volumetric approach means buildings are put together quickly by connecting a series of large factory-built modules.

VBC's deal includes Katerra's 577,000-square-foot factory, which opened in 2019 and can produce approximately 20,000 cabinets and 10,000 windows per month, according to Professional Builder. The offices include 50,000 square feet of custom fit-out and furnishings, conference rooms, model display areas and office suites.

Katerra is also selling off its factory in Spokane, Washington, to Blue Varsity LLC, a wholly owned subsidiary of Vancouver-based Mercer International, according to a release. That facility is equipped with extensive automation technologies including one of the largest cross-laminated timber presses in the world. 

The facility is located on 54 acres with an area of about 270,000 square feet. The products made in that factory are used in both commercial and residential construction, according to the Mercer release. With offices in Seattle, Mercer is one of the world's largest producers of market pulp and a growing leader in the solid wood products space.

Katerra's financial challenges resulted from the pandemic, an inability to provide bonding for projects and an inability to secure additional capital and business. The company has also entered into commitments for the sale of the Renovations and Lord Aeck Sargent architecture business lines to private buyers, subject to court approval.

Tokyo-based Softbank had invested $500 million and taken a majority stake in Katerra, but its CEO later named Katerra as one of Softbank's biggest investment failures, according to Bloomberg.