Three years ago Dale Sperling was running one of Seattle's most prominent real-estate investment companies — and telling anyone who...
Three years ago Dale Sperling was running one of Seattle’s most prominent real-estate investment companies — and telling anyone who would listen that factory-built, modular apartments were the next big thing.
Today’s he’s running his own tiny startup — and telling anyone who will listen that factory-built, modular apartments are the next big thing.
That’s what his new company, OneBuild, is all about. It plans to build prefabricated, modular, wood-frame units that developers can assemble into apartments, motels, student housing, military housing — all kinds of projects.
Modular consumes him, says Sperling, an avid skier. “I don’t ride up a chairlift without thinking about this stuff.”
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Retired Seattle businessman Chuck Collins met Sperling 35 years ago, and has partnered with him in several business ventures. “I’ve never seen him so over-the-top in love with a concept,” he says.
There’s much to love, Sperling says. He sees demographic, economic and environmental forces converging to bring modular apartments into the market mainstream.
“I drank the Kool-Aid,” he confesses. “I’m passionate about this.”
He attributes much of that passion to lessons learned from his three children, ages 30, 27 and 24, all members of the “Echo Boom” generation he expects will be the primary end-consumer of whatever OneBuild builds.
Stint at Unico
Sperling probably is best-known for his 15-year stint as president and CEO of Unico Properties, which owns or manages 15 million square feet of commercial buildings around the West.
Unico, in turn, probably is best-known as developer and manager of the University of Washington’s Metropolitan Tract, a 10-acre swath of downtown. During Sperling’s tenure the company expanded far beyond that base, moving into new cities and new sectors, including apartments.
Sperling was born in Spokane and educated at Seattle Pacific University. He attended graduate school back east and spent three years as a CPA in Portland before returning to Seattle for good 37 years ago.
He’s worked in or around real estate ever since, always from an office somewhere between Columbia and Pike streets. “I love downtown,” he says. “I love the action.”
But toward the end of his time at Unico — a major downtown office landlord — he became increasingly concerned that downtown’s ability to compete could suffer if workers couldn’t find affordable, attractive housing close to the city core.
That led him to modular. Factory-built housing can be less expensive to build than conventional, “stick-built” units — one study, in Philadelphia last year, concluded cost savings could reach 20 percent.
And technological and design advances have helped modular housing escape its longtime association in many minds with rusting trailer houses, Sperling says: “Most people wouldn’t even know it’s modular.”
In 2007 Unico commissioned two prototype apartment modules from a factory in Burlington, trucked them to Seattle and put them on display downtown.
Before the recession interfered, Unico was planning to piece together an apartment complex on Seattle’s Dexter Avenue North with 62 stacked, factory-built units.
Sperling left the company in January 2009, just after he turned 62. He says he wanted to slow down, reduce stress and enjoy life more — sentiments captured in a bumper sticker his wife, Carol, gave him the week before he resigned: “Wag more. Bark less.”
He had no plan to become a modular-housing entrepreneur, he says, until an opportunity practically fell into his lap.
The Burlington company that had built Unico’s prototypes went out of business. Sperling bought its robotic, laser-guided modular-fabrication equipment — for 15 cents on the dollar, he says.
Then he started raising capital and looking for a place to install that machinery so he could start building modules himself.
Collins, a former director of King County Metro Transit, was an early investor in OneBuild and now serves as its chairman. It wasn’t easy for Sperling to bring him onboard, Collins says: “When you’re a front-end investor, there’s always a lot of uncertainty, and you’ve got to accept that.”
He invested, he says, in part because of the business plan, and in part because of his respect for Sperling.
“There’s not an ounce of promoter in the guy,” Collins says. “If he doesn’t believe it, he won’t say it.”
Still, he found Sperling’s zeal a little startling. “In some ways, I would have thought he was too cautious for this,” Collins says. “I’ve never seen him so convinced about something as he is about this.
“There’s real conviction and evidence driving it.”
This spring OneBuild acquired Integrated Building Solutions, a modular-construction firm with a plant in Klamath Falls, Ore. The Burlington machinery has been moved there, and last month OneBuild broke ground on an expansion that will increase the small factory’s production capacity sevenfold when it’s completed this summer.
Sperling says he’s working on deals to build modules for apartment and resort projects in Washington, Oregon and Colorado.
“People recognize there’s an opportunity here,” he says, “and now’s the time.”
Why? Sperling points to his grown children and their peers, the generation that is fueling demand for new housing.
Sustainability is important to the “Echo Boomers,” he says. As teenagers, his children raised his environmental consciousness with their devotion to recycling and other causes.
Modular apartments have plenty of green appeal, Sperling says: There’s much less construction waste. And, unlike conventional housing, modules can be “recycled” — moved from one site to another.
What’s more, “one of the greenest things we can do is to modestly increase density,” Sperling says, and modular apartments provide an opportunity to accomplish that economically.
Modular apartments also make sense now, he adds, because Echo Boomers will be in the market for affordable, in-city rental housing for a long time to come.
None of his children owns a home, he says — “buying is the last thing on their minds.” They like the mobility that renting permits, Sperling says, and they’ve seen too many acquaintances who bought a few years ago lose money on their houses or condos.
“The Echo Boomers all know someone who’s lost a boatload of equity,” he says. “The recession has changed the landscape dramatically.”
OneBuild hopes to firm up its first sale by the end of this month. Sperling says building a new company is proving to be great fun.
“Talk about turning my crank,” he says. “This has been a blast.”
He continues to proclaim the virtues of modular to anyone who will listen.
“It’s a fabulous, fun, opportunity,” he says. “I live it and breathe it and sleep it.”
Eric Pryne: 206-464-2231 or email@example.com