The Prefab Pod

Prefab Review (PR): Hi my name is Michael Frank and this is the Prefab Review podcast where we interview leading people and companies in the prefab housing industry to learn more about them and just make it easier to make the best decisions about your next prefab or modular project. Today we're interviewing one of the leading architects in all of prefab and modular construction - Toby long. Toby is the owner and principal of Clever Homes and Toby long design which I think has been in operation for around 15-20 years and I'd also say that I just personally started learning about the prefab industry in the last year or so and I've talked to him a few times about working together as a potential architect of my custom home and he's always been extremely helpful, personable, and responsive. So really welcome, Toby. Thanks for being with us. 

Toby Long (TL): Thanks Michael. 

PR: Yeah I just want to get started by asking you how do you get into this business?  I checked out your LinkedIn. It looks like you started out sort of back in your collegiate career at Rhode Island School of Design. So sort of how is it your career developed?

TL: Yeah thanks. You know truthfully this kind of goes back to the days when public education was a good thing that we celebrated. I grew up in Pennsylvania amongst a family of physicians and social workers and given house. Given kind of my family's situation I wasn't interested in it. I ended up taking a class. It was actually a required class in seventh grade. So beginning of junior high all kids in the public school I went to had to take a mandatory class called construction. I mean how amazing that in public school we were forcing junior high kids to learn about trades. And so I took this class in Seventh grade called construction and it was sort of you know the other semester opposite like home-ec or something. And honestly it stayed with me. We spent half the semester building a little model and doing like design work and we spent the other half of this semester like working in teams to like build a scale model corner of a house with all the parts and pieces. And it was profound. 

So I kind of grew into this precocious teenager. I picked up the phone book when I was 13 years old and I started calling architects because I thought I wanted to do this and I found some old guy who let me come in and erase Mylar. That was my first job - like literally erasing Mylar so they could make revisions. And so I started out pretty early. I worked through my teenage years all through high school and through college basically working for architects and balancing that with summer months in the construction field in construction trades. I worked for a couple contractors and got to see both sides of the fence before I left high school and went to the Rhode Island School Design where I got my Bachelor of Arts and Architecture. I learned a lot about the creative process which matched up nicely with the upbringing that I had kind of formed for myself. And so I moved out to California shortly thereafter and found myself working with a buddy to build a bar in San Francisco. And next thing I know, in the late 90s I had launched my practice. 

So I started working in a pretty conventional way for a few years but never really found it inspiring or at least as I had imagined kind of launching out of creative architectural program. And fortuitously, I met some people around the year 2000-2001 who wanted to build a business in the prefab space and wanted to try to join up with a little bit of a first, second, third renaissance if you will of prefab which was taking shape around that time Dwell magazine had launched. And there was some fervor around this notion that we could challenge the way that we were not only building homes but maybe designing them as well. And so that kind of put things in motion. We took a little bit of seed money that we had gotten or had raised for the start of the company we were calling clever homes and we built a proof of concept project out in the parking lot of AT&T Park - something that we called the “Now House” and it was a panel sized prefab project that got a lot of attention and it really launched the trajectory of my career. And so over the better part of the last two decades I've built my practice around a specialty in prefabricated building technologies and methodologies and so we've put together a process a team a kind of know how if you will that really pivots on working with factory and factory based construction systems to build homes a little differently than they've been built in the past. I have to say that at this point in time it's really great to see that there's yet another perhaps a resurgence in the interest in prefabrication. And so it's been it's been exciting and certainly keeping us busy. 

PR: That's awesome. So yes actually I saw that when I was doing a little Googling before our conversation. I didn't know very much about it but I saw interviews about it from like 10 or 15 years ago. Was that closer to a more standard like Blu Homes style home versus a custom. Right? All the work you do now is custom, right? How did that transition happen? Am I characterizing that correctly? 

TL: Yeah. I mean I think I have a little bit of a distaste for this word custom that we seem to kind of throw around as though it negates the way that we think about design and construction that things are either you know sort of custom or not. I think the truth is that here in 2019 we've got a kind of aggregation of construction technologies and construction systems that are pretty prolific across most of the country and certainly here in California where our building codes have driven down quite highly specific requirements for the materials that we use in building projects. I kind of see custom more as a process of invention which I actually don't engage much in the projects we work on. 

We we sort of recombine existing technologies and materials in ways which I think are more more personalized. So you know this goes back Michael, partly all the way to the origins of the Now House and the way that we were conceiving our place in the prefab space learning to be a professional architect here in the Bay Area and more specifically Northern California. It was very apparent to me from day one that there was no catalog that the prefab world really puts as kind of the main document for how to understand prefabrication is kind of through this idea that architecture is you know is a static model that we can repeat over and over and I think for the majority the United States and places where prefabrication has. But probably the majority of construction in the Midwest and the South are is our buildings that are constructed in factories right now we've got flat lots. You've got you know little site conditions you don't have the same urban context or suburban contexts that we do here in this in the Bay Area not the least of which of course is you know topography jurisdictional controls aesthetic values that come from requirements of subdivisions or even just the culture of a community. And so you know it seemed to me that if prefabrication was really going to become a mainstream methodology for building that we needed to move past this idea that we were selecting our homes from a book and look more closely at the means in which we were combining existing systems and technologies in ways that could produce unique solutions that allowed for context to be a part of the architectural considerations for a project. And so in my experience you know I've never worked with two clients or two sites or two budgets that were ever the same. The idea that there was gonna be some static model that we could apply to the Bay Area I found to be kind of a fool's errand. And so rather than work to sell people on existing designs our approach was more about combining systems to allow for different shapes sizes and configurations for homes. And so the Now House was an attempt to work with a sort of Lego like approach using structural insulated panels or sips as the market defines them in a way that you know could could allow for this building to have various permutations and that that kind of that culture sort of underlies the practice and and really drives a lot of our motivations today. 

PR: So that makes total sense. So a lot of it's less around static design then sort of process as you said. So when you talk about process and doing things a little differently what are the core things that are important and that you'll kind of see throughout clever homes design? What do you think is distinctive about your guys practice?

TL: Well I think I position myself in a in a slightly distinct way from a number of different perspectives and so maybe you know as a first category I think design probably being the most significant. I celebrate architecture. I've been a kind of architect since I was a kid. I trained at an art school that taught me a lot about creativity and the importance of of design in our lives. And so I think first off design is at the front of the work that I do. And that's something which I think shows through the work - there is a common thread but there's also some autonomy and uniqueness amongst the buildings that we've made with our clients. And this is in response to you know the people that I work with. I've worked with families I've worked with young couples I've worked with retirees. And I think that where people are in life drives a program and that has to match up with with site conditions: whether or not that's a steep hill you know. Nothing in the Bay Area that's buildable is flat anymore. All those properties have been developed historically or whether or not it's contextual in terms of a community or an aesthetic or a design review process. We we embrace that and apply a design process using a repeatable methodology that allows for us to design buildings that fit where they go and who's doing them.

 I have to say budget -  I think that with a static model comes a static financial condition. And I think that that's a filter that we don't need to put on to this process of building in factories. I think that budgets are of course driven by the financial capacities of the clients and patrons that we work with. They're also driven by the market. We have to work with banks. We have to position buildings economically so that they are in a given communities strata or financial or economic condition. And so you know in my experience all of these influences on projects drive towards unique solutions. So I think you know first off maybe my main differentiator is that I really celebrate architecture. Where I am critical of the prefab industry and that I think that that's often just putting the can and hope that the right buyer comes along for the right house. 

The second way I think that I've really worked to differentiate myself is that I believe firmly in trying to help our clients understand the market at large. A lot of the prefab world asks people to kind of sign up on day one and that's a long journey. We don't build houses on day one. We build houses on you know day one hundred or 200 or whatever. And that's a long road to walk with people who you've sort of just met. So I've really taken seriously the need for my clients to truly understand what the market looks like historically construction has been bought and sold through a competitive process. And I think to dismiss that as a function of business challenges people on a number of levels not the least of which is the fact that this is a relationship based business we have to know and like the people that we work with. And so part of the differentiator for my practice is I work with the industry at large. I don't own a factory I'm not a contractor and never endeavor to be either. A good project is developed by a solid team of people who bring unique skill sets and unique trades to projects. And as we aggregate expertise we get wonderful results with a very diverse and capable group. And so part of my work with clients is to help these folks we're working with understand who who are the factories who are the fabricators that are out there some of whom do a nice job presenting themselves as as you know others sort of hide in the shadows a little bit because they don't need to market there's plenty of work to do and we kind of feed into that business as a way of helping our clients do a little bit of competitive engagement at an early stage so that not just factories but the local site contractors who I think are critically also a little underappreciated in the prefab world all become folks that come to this process through a selection which is a combination of personality, availability, and costs and by helping people understand that market. I think the relationships that we build around projects are inherently more solid as we get to that moment of building. So I think that you know for me those are the two sort of prime differentiators in terms of how I help clients try to navigate this experience without feeling as though they've been put into a box and shoved into a blind alley. I think it's great to understand your options. 

PR: That makes a lot of sense. So we'll get back to a couple of those questions around local contractors, rent factors and sort of a fire-round a bit. But one thing I want to get through right now because at our site we get a ton of questions about this are, the specifics about your practice. So I'll just run through a couple of questions and you know, some might be one word answer some might be more. How many homes have you guys designed and built in the history of the practice? And how many do you design in a typical year? 

TL: Those are good questions I maybe I'm embarrassed to I actually don't know. I think at this point we've built several hundred homes. I think in a given year we're probably engaged in a construction of anywhere from a dozen to two dozen houses. Projects unfold over a fairly long periods of time. So we've got projects that are at various stages of development from concept to close out but somewhere somewhere in there. 

PR: Are you designing them all or do you have a stack of architects?

TL: So my practice has a fairly long anthology that maybe isn't for today but we did a big pivot around the end of the recession for a number of different reasons and one of the big pivots for me was decentralizing my practice. We work with all of the fantastic digital tools at our disposal and employ a team of designers and architects that are essentially spread out across the globe. Most of everybody is here on the west coast but I have team members on the East Coast in the Midwest and a lot of folks out here as well with some international team members as well. So we have a supportive group of about eight architects and some other supportive people that do rendering work for us of course accounting and that type of thing. And then a number of consultants who work with us across the myriad of specific trades generally related to more of the engineering of the building. 

PR: Makes sense and then  we don't have to have a specific price. And I sort of know this answer because we've talked about this before but what's kind of like normal price range of your buildings? Feel free to get like the Bay Area. I don't know. I know most a of the work you do is in the Bay Area. But I imagine it might vary a little bit by area as well.

TL:  Yeah I mean ultimately you know maybe my  cynical kind of response to these questions of economics usually kind of wraps around a kind of central theme which is that you know you don't know how much your vacation costs until you get home. Right? So, so here we are at a construction project trying to anticipate the future and and essentially prioritizing and investing into the constituent parts of a building project some of which are prefabricated many of which are not and have nothing to do with free fabrication but all of which constitute the parts for a completed home project. And so my experience is that prioritization is different and differs from client to client. Everybody is an expert in homes. And so everyone has a slightly different way of prioritizing their investments. Now that said the work I do, I mean I'm in the prefab space so the work I do is is very repeatable. And so with the repeatability comes a lot of repeatable economics at least at the kind of early stages of conversation in terms of where we aim our expectations and what I usually tell clients that are kind of coming in and asking these very appropriate questions is that to plan for the entire investment into a building projects at least here in the Bay Area. And I would say probably this is true for the majority of the urban centers across the West Coast that the order of magnitude of those total investments looks something like this: which is that if we add up all of the square footage of a building project which I would include conditioned and unconditioned spaces like garages and if you add up all that square footage and you were aiming your expectations somewhere in a $400-$450  per square foot level of investment. That multiplier against all of the square footage of a proposed building project should create the order of magnitude of the total investment into a completed project. Right. So $400-$450 multiplied by all your square footage. That's gonna get you pretty close to all of the investments going in probably with the small caveat that I think most of us are guilty about which is that landscaping is generally underestimated in terms of how much we should really be allocating towards the exterior and yard and property landscape kind of elements. So that's about the order of magnitude. Now the known quantity kind of the airfare if you will that we can really throw darts towards pretty accurately are the prefab components. I do argue that prefab is a great way to build it's also a great way to plan because we know a lot about the house. At this early stage and therefore can focus a lot of our attention on the non prefab parts of the project that still have to be vetted in parallel with the building itself but the prefab world at least for the kinds of buildings that we're making with our clients and the more or less consistent level of specification in our projects is a known quantity which is right around two hundred dollars a square foot. I think that's a solid representation of the market at least as we were seeing through the end of 2018. I would expect through the majority of this coming year and you know from there there is escalation in the market. This has been something that goes up every year or six months or so but I think I try to help my clients establish preliminary expectations right around about 200 dollars a square foot for your modules and now you've got to go figure out what's everything else going to takes. If you can identify that the order of magnitude of the total investment and therefore perform some prioritization to balance out all of those investments makes sense. 

PR: So what locations do you typically serve? I know you do a lot in California. Do you do much work outside of California? 

TL: I have but I haven't been recently. The truth is that there's a lot of work here in California. We are you know as you know, significantly behind in our construction of new housing unit demand in the Bay Area and I would argue the periphery seems to be very consistent despite what we're hearing now about you know early economic indicators all that I guess the jobs report today may speak otherwise. But you know so most of the work that I'm doing is here in the Bay Area. The majority of it is I would say, within a three hour radius. I have worked in other western states. We have worked on the East Coast. I've done a couple of international projects. The truth is that people who call me with questions are looking for answers and so many of those questions really go back to networking. I don't know how much foundations cost. I would argue no one does except that a network in a given region is a sounding board for those kinds of questions. As I wander outside of a territory which I'm less familiar and therefore haven't really managed the same level of networking it becomes more difficult to answer those questions confidently. And so at least at this point in time rather than trying to go out and discover a lot of these answers I've been more focused on trying to work where I know a little bit more of the answers to those questions at least reliably. So yeah. So it's been it's been something that we've been looking at. One of the things that we're considering, considering but we're sort of engaged in currently really has to deal with the fact that you know our fire seasons in California are here to stay. And I think we're gonna be all everybody kind of come into the party here needing to be able to help throughout the entire state. And maybe that's a broader comment about the western half of this country that reconstruction of areas devastated by fire is going to be part of our culture and part of something that we're going to have to learn to do. So we've been doing a little bit of work of course not only in the north bay with the fires of two years ago but now starting to engage some folks down in the Malibu area from the fires of this past year and of course paradise is a whole other problem that's going to take a very long time to resolve. So the firm I've set up has an ability to kind of work anywhere but we've been for the most part focus a little bit more regionally here over the last few years. 

PR: OK so now we're getting into our Fireround. Well I'll rattle off a question try to answer it in one minute or less. These are not going be on clever homes but will be about you know helping us answer some questions that I have a feeling you might have expertise on. OK so modular panel or a stick built. I assume you have designed or worked on these. How do you choose which style to build. Or how do you choose with clients which styles to build for which projects. 

TL: Short answer panelised and stick build are both site assembled techniques that require local resources for the majority of the construction of the building.  Modular buildings are built almost entirely off site using resources which are not regional. Modular Buildings are stick frame buildings they're just built somewhere else so they're no different at the end of the day than the stick built structure that would be assembled on site panelized prefabrication seeks to improve the performance of some aspect of a building: steel insulation, fire resistant, city strength,  etc. because it requires local resources and it is an improvement upon some aspect of the performance of the structure it has been my experience that it is more expensive generally than stick built construction and so stick built framing onsite versus penalize building both site techniques but panel ization is more expensive. Generally speaking since 2010 we have focused exclusively on modular construction which is conventional building albeit done in a nonconventional way although because the materials are consistent with what would be built onsite in the stick built. Generally we do find that they compete on price tradesmen are familiar with the materials used in modular construction. 

PR: Great. How do you or should clients building new prefab homes select a local builder to finish up the home. What are the questions that you should ask? How should they find them etc? 

TL: So it's personality availability and price. And so how do we get there? Well, partly that's myself my networking. Networking comes from the work that we do as well as the factory partners that we're also working with. We get a lot of shared interest and camaraderie that happens in prefab buildings. So we are all in support of each other whether or not that's a factory helping find local contractors or a local contractor helping to vet factories. I think you do interviews. I think you check references I think you look to previous project experiences. I think we accept the reality that a lot of contractors have never done prefabricated building projects before and therefore are facing a learning curve and we should support that. 

PR: We need more people to be able to execute projects of this type. Which factories do you typically use and work with and why? 

TL: I would argue it's the same process. It's personality, availability, and price. We've got to understand you know who's out there we gotta let them look at the project and provide us with preliminary feedback that comes over both as a expectation of quality but also information and competitiveness. I think through that experience of engaging in that level rises to the top. We find the right partners  who are available at that point in time they can meet the economic criteria. There are a number of fabricators across the West Coast that we work with. Method homes is probably the furthest north of the Canadian border. We do some work with Green fab and Seattle. We've done work with Fidelity builders in Albany, Oregon. We do work with a Plant Prefab which is down in Los Angeles. We do work with Dvele which is a new company also down in Los Angeles and there's probably another half a dozen or so facilities across the West that we've also worked with in the past. 

PR: This is getting away from the fire round. How do you decide which one? Is it just the one that’s the closest location to the project you're doing or are there other factors in choosing the factory for each project. 

TL: I don't think that transportation is the meeting the main gating factor. I think we have to align culturally it's got to align on price and so transportation factors in but I don't think we select only because of region things. 

PR:] And then last fire round question -  steel framing. So you mentioned a second ago and you mentioned on your website. How does this possibly affect  home construction and how does it compare to other styles of framing? 

TL:  Well steel is strong and you can make an argument for fire resistive city and pest protection et cetera but it's more expensive. People compare prefabrication against the old way of building. We seek a better way but we compare it against the old and so not many tradesmen carry steel tools in their trucks. A lot of steel framing and a lot of steel construction is a commercial application and so the industry of contractors and subcontractors that are familiar with how to build steel buildings in the residential world is not a robust community. And so we have to accept the learning curve and sometimes the additional costs that come with building with steel cool. 

PR: And then final question. This is no longer a fire round question. It's a question we ask everyone during these. What are you most excited about or your company or the kind of prefab and modular industry for the near future like what should we be looking out for or that gets to you. 

TL: Yeah I mean I think the future and where our practice is headed is actually in a prefabricated larger buildings as important as it is to understand the market in the industry of pre fabricating single family homes. We're not going to single family home our way out of the housing problem. We need to create density. We need to create buildings that are taller that are denser that are more modern than our current infrastructure. And so I'm most excited and most bullish on the modular market as applied to larger projects that are mixed use multifamily and I'm very bullish and quite excited about the future for prefabricated high rise structures which I think is going to be really the future we're all aiming towards so that we can essentially build out more of our urban infrastructure faster and more predictably than than I think we're able to do. Currently. 

PR: That makes a ton of sense. And I know there's a lot of Bay Area housing advocates and other housing advocates that agree with you. Thanks again, Toby.

- Prefab Review (PR)

Hi my name is Michael Frank and this is the Prefab Review podcast presented by Prefab Review where we interview leading people and companies in the prefab housing industry to learn more about them and make it easier for buyers to make the best decision about your next prefab or modular project. Today we're interviewing Kaveh Khatibloo. Sorry if I butcher the name. He is the co-CEO of Stillwater Dwellings and they are a luxury prefab home designer based in Seattle. So welcome Kaveh.

- Stillwater Dwellings (SD)

Thank you. Good to be here Michael.

- PR

Great. Well just to get started, I know a little bit about Stillwater Dwellings but I really honestly don't know very much about you. It'd be great to understand how you got started in this business.

- SD

Sure absolutely. Hello everyone. I actually started in this industry when I was quite young. I was born in a family of architects in my immediate family as well as cousins, uncles, and extended relatives. So at a very young age I actually grew up in housing with designing our own homes and working in my father's design studio as a teenager just as a draftsperson for many, many years. So when I decided to start my own career, I attended Worcester Polytech in Massachusetts and studied structural engineering and to sort of complement the design skills that I had acquired and after a few years I moved into the prefab industry. And even as a young teenager I was fascinated by the industry itself and I always found that  that's a more progressive way of building a house and to a large degree much more sustainable approach to the custom building industry. And I found the company Massachusetts named Deck House that had been around for many many years.

- PR

Is that Acorn Deck House now?

- SD

That's correct yes. When I joined them in the early 90s they were just deck house, they acquired ACORN which was the competitor a few years after that. And my attraction to that company was they were more of a design centric prefab company and I always personally believe that design should be the forefront of every company even if it's prefab and their philosophy and approach sort of matched my personal beliefs and I worked for them for many many years and until mid 2006-07 I became director of client services for the west coast operation, moved most of the operation to San Francisco Bay Area and Seattle. Then subsequently partnered with Dwell Magazine and some outside architects that were actually very successful in the prefab and we developed a series of homes called Dwell homes by Empyrean and very successful until the housing crash of 2008. After that I consulted for some of the bigger companies in the industry and 2013 joined Stillwater which is a local company at that time quite viewed as a startup and was a very early stage of it. And as a chief sales officer for the company I helped the company grow and then eventually bought the company from the founder and with my current partner John Morgan, we have successfully been able to extend our reach throughout the United States and kind of provided an innovative approach to mid century modern design that I personally am very attracted to throughout the country itself.

- PR

Can you tell me a little bit about Stillwater for those who haven't seen them. And I would encourage you to check out their website or we have some coverage of them on our site as well to see the photos in person. But what do you try to do? What I've seen in the past is very aesthetically nice mostly single family homes. It's a pretty high end product. Can you Tell me more?

- SD

Oh absolutely. Stillwater Dwellings is essentially a design studio concentrating on currently our product line is a mid century modern butterfly roofs that were quite popular in Palm Springs and Central Coast California. And our intention was to be able to sort of update this iconic design and bring it to you know today. Today's lifestyle it kind of adapted to today's lifestyle. We chose pre fabrication as a predictable delivery system for our homes in order to be able to control timeline design cost with a predetermined set of details that we use and incorporate into every one of our homes. Right now in this day and age the prefab is such a broad terminology that a lot of different companies use but in reality we're closer to what we call the system built house. We have a set of design construction and fabrication standards that we use in every one of our homes. And using those systems we're able to come up with the right to different floor plans from something as small as a 700 square foot to you to a six thousand square foot completely custom designed home. We feel this approach allows the clients who want to build a custom home. to explore different options fit different sites different budgets different wish lists and complement that with it with a first class customer service throughout the United States. We can have a series of successful projects throughout the country.

- PR

So just to be clear when you think system built you're saying that it is certainly not modular correct ?

- SD

Yeah, correct.

- PR

So it's not going to look like a shipping container getting shipped down the highway before it gets installed. Are you actually prefabricating the kit or is that being done by independent factories? How is that sort of construction?

- SD

That's a good question. We actually can do both modular and the current system of use as a panelized construction. Modular is what you refer to and is what you see on the highways you know as shipping containers and driving  to different job sites. Although it's a it's a much faster when you're building a house. It does impose certain design restrictions and dimensional restrictions on the actual design of the house. And we felt like the initial projects that we tackled back in know from 2002 -2007 till 2013 lack the diversity and the flexibility that our architects wanted to have. So soon after in 2013 we incorporated and started using panelized construction into our homes.

- SD

We are currently partners with two different fabrication facilities both in Washington and in California and in a very near term future we actually are about to open up our own facility and then bring that under our own roof if you will and control the process from beginning to the end.

- PR

Got it. That's interesting. And that'll I assume be in the Pacific Northwest. Is your new facility also going to be in the Seattle area?

- SD

We don't know yet. Most likely not, as a national company would try to find a location that can service most of our primary markets. Right now primary markets is essentially west of Colorado, west of the Rockies. So we want to have a facility that can minimize the shipping costs and have it reach to the edges of the property market. Although we've done projects in Massachusetts and Hawaii and we have beautiful projects in throughout the United States the primary market that we essentially ship to and design for is the West Coast United States.

- PR

Got it. Yeah. Yeah it seems like we we've probably received like a dozen announcements this year at our site from people opening up factories kind of. I think that inland California I guess it's the sort of way of describing it it seems like. I don't know if that's what you're looking for that's where we've seen a lot of these happening in the past.

- SD

That's correct.

- PR

And then so basically so you're creating a panelized solution. re you only building the shell of the house? Does that mean a local contractor is then building the foundation and doing the interior of the house or what sort of the division of labor?

- SD

The material that we provide for the House are essentially the shell plus siding, interior doors, hardware, roof system and some of the specialty components such as the canopy and the visor and the specialty sheet metal elements that are incorporated into our designs.  Those are provided by Stillwater throughout the United States. The general contractor is going to be responsible typically for the site work,foundation, assembly of the package if you will and all the finishes are done by the contractor including mechanical work. However there is a there's a there's a considerable amount of specifications that we provide the contractor for all the finishes whether it's light fixtures to towel bar holders to kitchen cabinets essentially. We do provide the contractor a complete set of specs for the finishes as well so they don't have to chase a client for months on end to be able to figure out what kind of light fixture that they want to do.

- PR

That makes sense. Are most of the contractors you work with people from your own personal network?

- SD

Yeah. That's actually an excellent question. To make this process even more pleasant for the clients. We work very hard to retain the contractors that we have worked with in the past. There are  contractors that I've been personally working with in California that have been building panelized homes for me for about 15 years. We actually do receive inquiries from a lot of contractors that have heard about us through either the building department or financial institutions or clients and neighbors and friends that want to join a cadre of professionals in our primary markets. We train new contractors all the time. They are well taken care of. It's actually part of our success. I can easily say is because of the contract network contractor network that we have throughout the country. They have been well served by our clients and by us as well. And the combination of what they do and what we do is what makes the entire project successful.

- PR

Got it. That makes total sense. So we get at our site and you probably get well over 10 questions today from different readers and figuring out the local contractor if they're working with an architect who's not as experienced in prefab as I would say probably the number one pain point source of questions. So that makes total sense. So does that mean that I'm kind of in the Western half of the United States you have pretty strong networks throughout and maybe a little bit less developed on the east coast?

- SD

On the West Coast Unite says we have a very strong network of contractors. You're absolutely correct. However through my previous affiliation with Deckhouse/ Acorn and it essentially became Empyrean. I do have access to a large court network of builders throughout the United States where I know from time to time I access and I talk to them. And even in areas where we may not have new contractors we essentially tell our clients that you know as their partner it's our job and responsibility to assist them in finding a contractor - Unlike some companies who essentially wash their hands from selecting a contractor because of liability of whatever it is we actually are heavily involved in not only contractor review/ interviews, oversee their pricing, make recommendations to the customer, and actually forge a relationship with that customer for our future growth and as well as making the existing project more successful.

- PR

Got it that makes sense this definitely something of value. So what's your average price point? I understand that it probably varies a bit and everybody needs to say average price point but the way we like to try to coordinate our site which most manufacturers get upset with us is we try to say what does it cost to build a house? So it's possible to kind of break down how much will a Stillwater Dwelling end up costing on a dollar per square foot basis on average. And then what is the kind of local contractor cost?

- SD

Oh absolutely.

- PR

If you want to make it easier we can say  on a flat lot in the San Francisco Bay area to start and I understand the San Francisco Bay area is a very expensive area.

- SD

I'll actually give it to three different examples and probably look a little bit easier. The national average for our projects is about four or five hundred dollars a square foot. Okay. And considering some areas in Texas for example you can build still build something for about 350 square foot and San Francisco Bay Area as is most likely over $500 a square foot. But the constant element in this is the cost of the Stillwater package price and that's roughly about depending on the size of the house. It varies from a hundred and eighty to two hundred twenty five dollars a square foot larger homes tend to be less expensive as you know on smaller homes tend to be on the high side cost perspective. Contractor price which varies between 200 to 400 all a square foot. So if you're building in San Francisco Bay Area on a typical lot I mean even if it's a flat block the foundation costs and all the seismic regulations and the higher labor costs for some of the work has a tendency to increase that costs. So with my clients in the Bay Area which actually we're doing 40 or 50 different projects there right now those projects has a tendency to start at five hundred dollars a square foot and up and they do go up to $550, 600 depending on some upgrades and windows and some selections that they want to have. But usually starting at a $500/$550 would be a reasonable cost for about a two thousand twenty two hundred square foot house.

- PR

That includes soft costs?

- SD

That includes all costs. Yeah. That's actually an excellent question. One of the things that we emphasize in our design seminars that we conduct nationwide is as a company a long time ago we have decided to include the total project cost and in all my career I have never been able to distinguish between the soft cost on a hard cost as far as the client concerned. These are all costs. I mean it's easy to distinguish between them but in reality it's our responsibility to tell our clients to know how much they have to spend in order to move into the house. And that's what we do for them.

- PR

So we deal with quite a few companies here and one of the things that we hear it's almost become cliche sometimes and I'm not sure if this is true for you is the plans we have on our site are never the plans that get built meaning like you know a lot of the prefab companies have very nice looking plans on their site. And I'd say those serve kind of more inspirations than is actually what gets built. Most things get customized. Is that true for you as well or would you in the back in building a lot of the plans on your site?

- SD

The business model changed a little bit since the recent fires in California. You were correct in assuming that the times that we have on our Web site or we do publish in our plans book we're more of an inspiration for our clients and as a full service design studio we actually make modifications to these plans internally so it's very for us easy for us to make custom design or modify design based on those. However with the recent fires in northern California and also in southern California, Malibu has created a path for our customers who want to accelerate the design process significantly. So we have introduced a series of what we call the pre engineered homes so these homes are not only designed but they're also engineered for different parts of California and then in most cases they've already been built in one or two different locations. That engineered version of these plans allows the clients to cut six to eight months from design and engineering so they could literally take one of those plans and as soon as we modify the foundation to fit the existing site in a matter of weeks we can apply for a building permit.That has become a very attractive option for a lot of our clients who've lost their homes and they want to take advantage of the speedy process.

- PR

That's great to be you can actually get homes built in like six months or so?

- SD

Yeah, from the beginning to the end, including design ,engineering, pricing builder  selections and moving in it's maybe about 12 months 13, 14 months they can do it. It never goes that way but it's essential even for California to build something under a year and a half is almost unheard of. But recently we've been able to do it quite successfully.

- PR

It's great. It sounds like you've really helped scale the company since joining about how many houses are you building a year these days?

- SD

Right now we have 50 active projects in our queue and active projects are the ones that we're working on. It's either under construction or permitting or engineering or schematic design or different phases. And that number is actually increasing significantly on an annual basis. We are adding new architects and professional interior designers. So we're becoming even more and more full service in what our offerings are to our clients because they constantly ask for more services from us.

- PR

So you're doing interior design for clients as well?

- SD

We do. That's a new service that we just started providing our clients full service interior your design services. We find that a lot of our homes a lot of our clients even though we provide a comprehensive package of finishes for our clients they choose to hire outside designers and interior designers to some color selections or when they want to deviate from our standard package

- PR

Are you helping with furniture selection and art as well?

- SD

Absolutely.

- PR

That makes sense. At your price point in the sort of tech world that I come from, a lot of times we talk about people having more time than money or money than time and I think it seems like at that 500 dollar plus square foot package, a lot of these people are really happy to pay for the expertise.

- SD

So that makes total so they don't have the time to be able to do it and then we have the expertise and knowledge and or know how to be able to manage these projects in from soup to nuts for them.

- PR

So just for this next session it's been great to learn a bit about Stillwater dwellings, We have what we call a quickfire round so this is more general prefab stuff. We'll give you a question to try to answer the questions in one minute each question one that are less. And we'll go through a few. Sure. This is mostly my chance to become smarter about things I want to understand more about. So building on hills, what do clients have to be aware of and how do you and local contractors help with that and feasibility etc.

- SD

Hillside building is actually a little bit more challenging than flat site. The slope of the hill will impact obviously it's on the foundation increased square footage on a lower level. And then the stability of the hillside is always a big element that we have to consider. So a comprehensive geologic study of the site is always needed in order to be able to estimate the cost of the foundation early on and subsequent design of the foundation itself. We can however adopt and modify any of our designs to be on a hillside and we do that very easily.

- PR

Will you be the main point of contact if I say I buy land in Marin near here. Would you be the main contact or would you connect me with a local contractor who is the main contractor for that feasibility?

- SD

No we actually are the main point of contact for every one of our projects even during the construction where there is conversation between the owner and the builder to always get a symbol for sometimes the conversation goes to us to the contractor. Even though the contractor is hired by the by the client independently we are always a main point of contact before after and during.

- PR

Got it. All right. So you said you partner with two or three factories right now for prefabrication of your shells. What are the things you look for when you're doing diligence on a factory?  What are the what are the key aspects in terms of saying this is a good partner versus this one might not be for us.

- SD

Sophistication and fabrication is actually a key element. Most of our homes actually all of our homes are designed and fabricated to much higher tolerances than anything else. We usually use sixteenth of an inch tolerance so they first they have to be able to have the ability to work with the software that we use. Well fabrication software that we develop in order to be able to make these panels or all the elements in the house itself. Second they have to have access to the much high grade of lumber than what you find in typical Home Depot or what most custom projects work with. Those are the key things. And also some fabricators generally like to work with more commercial aspects of prefab vacation. So standardize 8x 10 panels is something that's very typical with most fabrication companies. However custom prefab vacation is a is a rather unique and intense industry. It only slows down the fabrication process and the facility has to be able to understand the economics of custom building which is different than commercial building which is very standardized and typical panels that get flushed out of there like a fabrication company can produce eleven hundred to twelve hundred linear feet of wall panels but by the time it gets to something as highly customer specialized as Stillwater that production is reduced to about 650 to 700 linear feet and they have to understand the economics are going to have to be willing to to work with us at providing our customers with a first class service.o

- PR

Do you end up using SIPs (Structural Insulated Panels) like a lot of these other companies as well for your panels?

- SD

No we do not use SIPs for a variety of different reasons. One of the main feedback that we get from a lot of contractors  is that they are uncomfortable working with sips especially if they have to run plumbing through it, electrical, you know ductwork they always have to be able to find a route different areas through the installation to get that equipment through. Secondly the value of our homes especially the wall assemblies and roof assemblies are actually higher than what sips products offer. So which is kind of surprising because sips are known for you know as an insulated panels apply themselves but we actually need to have a much higher R value specifically because of the amount of glass and glazing that we use throughout our homes. There's a specific number that we have to hit that far exceeds even title 24 in California.

- PR

And title 24 is the zero net energy mandate?

- SD

That's right.

- PR

OK. And then finally, I don't know how often you see this, we see this very frequently on our site. Do you have people who end up basically building Stillwater dwellings home either as developers or for the purchase of kind of doing what I would call a long fix and flip? Like an 18 month fix and flip meaning I still buy a piece of land, build a Stillwater Dwelling house for whatever you said, $500 a square foot and then you know selling it for nine hundred or fifteen hundred dollars a square foot. Do you have experience with people doing that?

- SD

No we don't. It's interesting we have had developers actually partner with us. You know we have discussions with them and in the past you know it looks like the economics could work but we really have not had a chance to work with developers and you know to build a Stillwater home. The custom residential industry that we specialize in has a different economic equation than what the developers are looking for and the services that we provide is generally duplicated by what a developer does and for an end user that becomes very beneficial for a developer. Essentially it is something that they are going to be paying for and they've never bought them out. We have a lot of hand holding that we do through our clients for small visits and contacts with as you said for a professional in the Bay Area becomes quite useful. But for a developer they're set up to do exactly what we do. So it's really redundancy of effort.

- PR

That makes total sense. OK. So final question what are you most excited about both for Stillwater dwellings and kind of for I guess the prefab industry as a whole going forward for the future.

- SD

Yeah that actually as a prefab industry in my career which is expanded you know multiple decades. I have seen a tremendous growth in the higher end market which is essentially what prefab can actually do even more service than a mid-range market. There's more of an acceptance especially on the West Coast. The East Coast was a little bit more established the pre fabrication was more stable than it was in the West Coast until 2003 essentially but now we are actually seeing you know four, five, six million dollar client we have clients that are millions of dollars and want to spend on prefab and for them there's the pejorative term of prefab has been eliminated and now they are actually beginning to realize this is actually a much higher quality home with much better design features than even some stick built home and traditional architectural firm. At Stillwater we are excited because our decade long effort to establish this company as a recognizable brand has really paid off. We have been diligent about maintaining a certain standards without compromising it just for the sake of the next house also so if you will. And now we are recognized throughout the country as one of the best brands and this is quite valuable. This is what actually gets me up every morning to come to work is just how we've been  received throughout the country. So it's one of the best companies out there.

- PR

That's great. Thank you so much for  taking the time to tell me and the audience about Stillwater dwellings. All the best of luck to you in the future. If you want to learn more about Stillwater dwellings go to StillwaterDwellings.Com or check out the content we have about them on prefab review. Thanks Kaveh and speak to you soon.

- SD

Thank you very much Michael and I just want to thank you for the services you do by the website that you have is very educational I've gone through it and a lot of clients have visited I'm sure they're gonna benefit quite a bit from it.

- PR

Thanks again. Thank you very much.