Episode 3 - Tedd Benson, Bensonwood and Unity Homes

Hello, my name is Michael Frank and this is the Pre-Fab Review Pod presented by Pre-Fab Review where we interview leading people and companies in the Pre-Fab housing industry to learn more about them and make it easier for you buyers to make decisions about your Pre-Fab or modular project. Today, we're very lucky to be interviewing Ted Benson, the founder of Bensonwood and Unity Homes and potentially some other organizations involved with Pre-Fab and panelized building who is based out of New Hampshire. So welcome, Ted. Thanks for being with us. It's good to be here and I look forward to this conversation. It's always fun to talk about what we do. Awesome. So I wanted to start out by asking, how do you get into this business? I began in 1973 and as a young idealistic naive young man, Hayata, a vision to really try to improve the building industry and so my initial interest was to try to find a better way to build. And my initial go to solution was to revive the old form of timber frame construction and bring it into the 20th century with better tools and better technology and better building systems. So that's how we started, kind of really focused on one aspect of the construction, but the interesting thing that evolved from that is from the very beginning from the early 70s, we were prefabricating because the efficient and effective way to create a 20th century version of the old world timber frame was to make the parts offside and to fabricate them in controlled facilities with better tools and better technology. And so through the years, we've added more of the building systems, but we've always had the technology and the rhythm and the logistics of prefabrication, kind of as our underlying skill set. That's really interesting. So you said in the 1970s, had you been an engineer or a contractor or anything like that before? What are your training owners? I had been a carpenter working my way through high school and college. So initially it was a way to make a living, a way to pay tuition and the roof and board. But I became very interested in building, I liked it, and I liked a lot of things about it, especially the immediate gratification or feedback of the work you accomplish. So I became kind of enamored of building a general, but really disenchanted with the traditional methods of building because the outcome was so often compromised, often because of psych conditions, but often because of lack of training or lack of right attitude or right approach. And I knew from my own experience growing up how what a huge difference a good quality home can make in a person's life. And it was disconcerting as a young carpenter builder to see poor quality construction come into the marketplace and affect people who deserve better. So some of it was being inspired by building and some of it came from thinking as a young idealistic carpenter that there must be a better way. That makes sense. So you started out, you said you're mostly building the frames off site. How did the business evolve since then? Well, again, initially we were focused on one aspect, but it became pretty clear that as a company we needed to come up with a total solution that is we had to find ways to control also the building envelope, the enclosure, the walls, the floors and the roof. And while we might have been mostly interested in reviving this old way of building our clients were very interested in having a home. And so that took us eventually into a panelization of all sorts. And so as a company we evolved our prefabrication to include an entire building envelope, all the exterior finishes. We added mill work and woodworking so that we were able to provide doors and stairs and tram and all those important aspects of the home as well. And so just over the decades we added value to our prefabricated product for our benefit and for the benefit of our clients who really needed and deserve better homes, not just better structures. Okay, that makes total sense. So fast forward to today. Can you tell me sort of, again, I know you have Bensonwood which you should explain it not me, but I think is sort of a high end custom product. And I know you have Unity homes which is sort of more of a value product that is not necessarily custom designs. But it'd be great to hear about those products as well as anything else you guys would do. Yeah, sure. Well, in the history of Bensonwood we've always focused on a more custom product. And part of the reason for that is for us to learn as craftspeople and as builders and to be able to experience a wide range of products and building types and architectural types and make sure that we were developing construction methods that were viable for everything and not just kind of a narrow dimension in the market. And so, you know, working in that way and trying to elevate our craft and elevate our skills and to demonstrate that this is truly a better way to build, we've been able to bring our product as Bensonwood. Across the entire country we've been in every state to the union. We've built in Japan and England. So clearly, you know, we've found a way to attract an important niche in the market. But also everywhere which, you know, brings us solutions to the types of buildings that they build, you know, out west as well as down south and in the cold climates and the warmer climates in many different architectural types. And so that's given us a broad experience, but it's also allowed us to execute a wide range of solutions and systems. And you know, once we had all those solutions and systems of manufacturing process, then an extra for us, you know, as a dedicated group of craftsmen builders was to find a way to make this very high quality product more affordable in the marketplace. And so in 2012, that led to launching a new company, not just with the vision of Bensonwood, but a new company called Unity Homes. And the idea of Unity is to standardize the components of the building so that we could customize the configuration of a building because we had learned through Bensonwood that every time it's different, every site is different, every budget is different, every need is different. And so we needed a standardized solution to lower the cost of entry, keep the quality high, but still allow a very wide range of client personalization and customization, which we've come to think is critical to better building. You know, not just the building quality itself, but the ability of the building system to meet the particular needs of the clients. What sort of scale are you guys at right now? I know you obviously do kind of multi-family and commercial product as well, but at least on kind of the residential sort of single-family home size. Like how many homes a year does Bensonwood and Unity Homes do? Well, you run up to multi-family piece and that's important because it's a part of what we're doing. We're actually raising and installing a big multi-family project in the Boston area right now. And a month or so ago, we completed one, another multi-family project in Upper State, New York. And each of those kinds of projects kind of displays. 10, 12 or 15, you know, single family homes. And so we count things a little bit differently. But I think the important thing to know is that our production capacity in with our 100,000 square foot factory is about 250 to 300 homes a year. - Okay. - And how those get kind of organized between the Benzenwood side and the Unity side and then the out of office, outside architect, multifamily and other kinds of projects is always shifting. So right now for instance, Unity is very busy. We've got a number of projects in production. Benzenwood is a little less busy because we just went through a big, you know, kind of sign way of activity and we've got another one coming up in the fall. So it's good for a company like ours to have the kind of diversity that we have and be able to serve all these different kinds of markets out there, not just across the Northeast, which is primarily where Unity is focused, but throughout the country. - That makes sense. Let's talk a little bit more specifically about each of the two sort of companies Benzenwood and Unity just because, you know, when buyers come to us, they say, okay, here's my price point, here's, yeah, here's the location I wanna build in, here's the style I wanna build in, whatever, here's the size, what are we looking for? And we try to, you know, point them in the right direction. - Sure. - So for like Benzenwood or Unity, are you guys doing the interiors as well or is what you guys are building mostly kind of the shell of the house? - Especially, well, in Benzenwood, the interior part that we're doing is the offsite fabrication of the Millward elements. So we make a lot of interior door, stairs, trim packages in even things like waste cotton systems and kind of all of that, you know, interior Millward that defines the finish, but also the style of the building and it helps us to create a craft consistency, you know, in all of our buildings. So for example, we do have a building being constructed right now in Colorado, just outside of Denver. And maybe six weeks or eight weeks ago, we installed the shell of the building. And now we have the Millward package ready to go. We're ready to be shipped to the site whenever the local contractor who is taking care of the mechanical trades and kind of the rough end. And when he's ready, then we'll, you know, we'll deliver that Millward package for the interior finishes. - Got it. - So on the Unity site, it's similar, although we don't always, as a company ourselves, make all of the interior finishes. We provide the interior finishes, stairs, trim cabinets, even fixtures through kind of a suite of suppliers and always focused on quality and affordability. And so some of the things we make in Unity buildings, like we make trim kits for windows and doors, but we don't make all of the cabinets and interior doors as we often do for Benzumwa projects. But we still providing that kind of complete interior package kind of after the shell goes home. - That makes sense. And then stuff like appliances, like HVAC, plumbing, that will be done by the local contractor. - Yeah. And well, let's start with the appliances that are usually purchased locally. And that's important just for the service side. But the mechanical systems, plumbing, electrical, HVAC, are tend to be installed more locally. However, I do have a little kebby on that. And that is that we also do make things like backpods as modular elements. - Yeah. And so that's been a focus of our new keen factory to bring that capability back to our production. We did it for two years in our smaller facility and then just kind of outgrow it. And now that we're in the larger facility, the intention for both Benzumwa and Unity is to provide complete modular elements that is 3D volumetric elements for the intensive mechanical areas of house. You'll still need a local plumber electrician for tie-ins and so on. - We are capable of doing more. - Right. And once there's a foundation, are you actually putting the house together or is that what a local contractor is doing? - Usually both. That's the right way to do it. Almost always there's a representative or two from our company here. But the best way for us to execute is in partnership with a local contractor, especially if it's a little farther away from our factory so that they're also kind of tuned into the product that we've delivered and have been a part of that installation. So they know the details and the requirements and how to ensure that the high performance qualities that we've embedded in it are maintained as they continue their process. - That makes sense. What's so from an architectural standpoint on the Benzumwa stuff, what's this split in terms of you designing their homes versus an outside architect designing it at home? - Well, that's a good conversation. We have a team of interior architects here for very good. We do good work and definitely have a lot of pride in the quality of our architectural design. But that said, we like working with outside architects and bringing them into our system because it really helps us to stretch and learn from other professional designers. So we do a lot of work with outside architects. And in fact, there's a new initiative that we're launching this year in partnership with two significant architects. And you'll know the answer to that question in early September, because we're launching this new initiative of kind of new Benzumwa products that will be a collaborative effort between our team of architects and two outside architects bringing three products, kind of platform products into the marketplace. And it's just been really fun and exciting to work in collaboration with other architects and to show them the standards that we have that really help us to fabricate products efficiently and then together with kind of their design ideas and how we can integrate the two and have lots of standardization. But all the customization and kind of the quality that we need to represent kind of three tentacles of design through one system. - That makes a lot of sense. Yeah, we've seen, I mean, I wouldn't say that strategy is incredibly popular, but we've seen a few people do that over the last couple of years. It's always cooler to have more quality designs that are being built competently. So that's awesome. - Yeah, yeah. The key to it we think is that there's consistency in the systems and in the components, in elements, even in the parts and pieces so that the off-site fabrication can happen well. But there's different differentiation in the architectural outcomes. And that whole thing is kind of fun because because there are things that we're now going to be doing that we alone never would have thought of. So we've got-- - I think that's a lot of sense, I think. - Well, again, we've seen this a little bit before and it seems like, A, right, like you probably save a little bit on design services if you're a buyer because it's not 15 or 20% of necessarily for like a completely-- - Yeah, and well, in fact, you see a lot. And that's where, you know, that's part of the reason that this is happening. - And then the second thing is that I think it helps from it. inspiration sampling too. Yeah, yeah. That, you know, custom design is expensive. We know that because we do a lot of it. And it takes a lot of time, a lot of effort, to make a unique thing in the marketplace. But on the other side, if we can standardize the right things, we can still achieve a custom design for much, much less of this on an effort. And so that whole effort of kind of the standards plus customization and how we mix it to is, you know, a critical aspect of how to make both affordable buildings more affordable, but high-end buildings more affordable. And I guess it would try to achieve both. So getting enough affordability, and this is, I think, probably the most helpful things we do is try to give people an understanding around price. Basically, how are your homes priced both on the Unity side and on the Bensonwood side? And what would be most helpful is kind of understand, let's just call it a typical project on a flattish lot, and I don't know, Lexington, Massachusetts, or, or some like, you know, relatively high-end area. Yeah, just basically understanding. And if possible to kind of break-- and I understand there's ranges and all the stuff, kind of how much projects usually come in overall, and then sort of what the differences, like, components are in terms of Bensonwood versus local contractor. OK, I'll take your crack at this. Yeah. But if you can understand, "Astrix," this is a range. Does it? We're not paying you to this. But I think it's helpful in terms of-- I'll give it a try. But let me preface it by saying that listeners can go to the Unity Homes site at UnityHomes.com. And we do post some kind of prices for each of the platforms. So you can kind of see what we have projected for kind of the entry-level models and then how a cost might escalate, depending on finish packages. So there is some information there. On the Bensonwood side, there's less, because our work is so custom. Right. So Dan, your question-- if we were building in Lexington, Massachusetts, the first thing I would tell you-- because I know quite a bit about that area-- is that local building costs in Lexington are pretty high. And it would be hard to build any kind of single family home in the Lexington area for under $200 or square foot. Actually, having said that, I can't imagine building one for $200 or square foot in Lexington. In other words, building costs are a lot higher there. And so that's kind of good news for the Unity site, because we are very affordable in the Lexington market because building costs there are so high. And so we would be $200 as a square foot just because a lot of the local labor inputs are also expensive in Lexington. This is for all in a Unity house. Yeah, a turnkey. Got it. Yeah. And on the Bensonwood side, doing the same thing, because of the higher level of customization, the higher level of finishes, it probably-- more in the neighborhood of 300, which might be fairly normal for Lexington, but all the way up to $500 or even $600 as a square foot, depending on customization, complexity, and levels of finishes. So yeah, I mean, 300 actually would be surprisingly inexpensive to me for an area like that for a custom house. Would that actually-- Yeah, yeah. Like softgots, like design and such. Yes. Yep. Yep. And part of the reason I can say, we built a lot in that area. So yeah, you're confident about that. But I think we should-- for the listeners, part of you, we should put this in context. And let's take it out of Lexington and move it to Walpole New Hampshire, where I am, which is much more rural. And here, costs are much lower than a place like Lexington, which is a more urban area. And so you could build a standard home in the Walpole area for really 150s, fairly normal, maybe 175, for a relatively decent local builder type of home. And so here, with Unity, we compete with that. We don't beat it, but we try to build a better product. That makes sense. So from a standpoint of what the costs that basically you're paying Bensonwood or Unity versus a local contractor, is it 50, 50, 60, 40? Just trying to get an understanding. Because that's also helpful in terms of, from our perspective of-- we understand that illegitimately-- I live in San Francisco. In San Francisco, you may pay a local contractor $200 a square foot to only do the local site costs. So just trying to understand, basically, what are we paying the prefabricator on top of that? I mean, what is a prefabrication package? Exactly. What is a premium from prefabrication? No. So the question is-- so Lexington, you said, it's going to be $300 just a square foot. That's going to be a split between the amount paid to Bensonwood and the amount that eventually goes to the general contractor and his subcontractor. OK. Yeah. So typically, the shelf package part, the enclosure with windows and doors and the weather type building envelope, and all that is included in that, interior partitions, four system wall system roof systems, et cetera. It's generally 40 to maybe 50%. And then if we've added the mill work package, we can get that up to 60%. OK. That makes sense. And so 40 to 60% depending on the extent of our package, when we do bath pods, that gets up to 70%, 75%. OK. So when we don't-- Yeah. So the package part ends up running $150 square foot or something in that range, is that right? Yeah. Yeah. That's actually a pretty good number. No more expensive on the Bensonwood side than on the Unity side because of more because of the customization than because of the quality of the envelope. Sure. That makes sense. And how long do these homes typically take to build, particularly on the Unity side? I could imagine it could be fairly fast. Yeah. Pretty fast. We just did put together Unity home last week in Vermont. And it was two and a half days for the complete shell including the garage. So that was on-site assembly of the building shell. Sure. And on top of the existing foundation. And how about the process from the time you guys-- what's a fast process with a client from when they meet you to when they're in their home? Could you do a year or is it-- Yeah. So for Unity, which is really fast because of the standardization, we've actually had several instances, several many, two, not many. Where we've gone from first client meeting to turn key in the same quarter. Wow. So that's incredibly fast and don't expect it. But it's happened. If we're just choosing a product that we know how to make and we can manufacture and deliver it. So more typically, it's in the four to six month kind of period for Unity. And then Ben's a way that is much longer because of the customization of the design, which can take four to six or eight months on its own. And then from there, we go into production. And then it's six months or eight months. Well, it's been great learning a little bit about Bensonwood and Unity. We just want to transition quickly to our fire round. Basically, fire a few questions at you, sort of on a variety of topics, sort of tapping into your expertise. If possible, to give your answers in one minute or less, that would be great. And we'll discuss through a few of these. So first of all, can you tell me a little bit about cross-lambinated Timmer? I hear about it all all the time. Not all the time pretty regularly. I also hear about Gowell laminated timber. Do you use it? What's special about it? Etc. Okay. We do use cross laminated timber and we do use Gowell laminated timber, especially on the Benzwood side. So cross laminated timber is the way to think about it. It's like a really big fat sheet of plywood. So the cross lamination is actual planks of wood that are branded in one direction for one layer and then the opposite direction for the next layer. And glue under pressure with incredibly good glue to make a composite panel that may be anywhere from 3 1/2 inches to 6 inches thick and 8 feet up to 40 feet. And the idea of it is more wood kind of developed in a way that it can displace concrete and steel as a building for. So cross laminated timber buildings can go much higher because there's not the shrinkage issue that you have in other forms of wood and they're very very strong and very stable. So that's cross laminated timber. Dow laminated timber is you can think about it as plank side by side by side with dowels driven through horizontally across grain to essentially be the glue that connects those planks into a single panel that then can be lifted and installed on site. Usually as floor systems or roof systems in place of a more independent and light structure. Kind of makes it very helpful. How should buyers think about doing diligence on land? We get this question all the time because a lot of manufacturers don't want to actually even work with buyers before they at least have land under contract. Well it's really important to understand the building site and the opportunities and the constraints that may be embedded in that building site. So we do like to work with clients who are in the searching phase. And simply because of Google Earth. We can actually help even if we don't always go. And so we can learn enough about the location, the adjacencies, the building restrictions and so on. Even if we haven't visited, if we can visit because of proximity is just obviously even better. But as designer architects, engineers, it's really helpful to have some input because always the building design, whether it's unity that standardize or Benson with it is custom. Nothing happens until you understand the site because design begins on a building site that has orientation as a road. There's a logical architectural party that it comes out of understanding the building site. So if we can have some influence on helping our clients to understand it's opportunities and it constraints as helpful to us. And how do you see most people in this could be a long question. So paying for slash financing homes these days. For example, are you seeing two in one products? Are you seeing a lot of people buying land and finding it to make a construction, etc.? Nearly everything. And these days it's often an obstacle because not so many lending agencies have experience with offsite fabrication. And so we're often in conversation with the lending agencies to help our clients understand and help the lending agencies understand how offsite fabrication works. But I would say that most of our Bensonwood clients aren't necessarily going out and needing to collateralize a land in order to finance the construction loan. That makes sense. But many of our clients on the unity side are having to make sure that comparable have been established. Lending institutions are on board and that they as individuals qualify for the kind of loan that they're asking for. We're almost always in the conversation with the lending agency. That makes sense. Is there a secret to finding good local contractors who can build the kind of foundation and take care of the sort of finishing aspects of the home? Like yeah, how should a buyer do diligence on this? They are good builders everywhere. That's the first thing to say. And then of course the corollary to that is the obvious one that not all builders are good. And so we also like to play a role in that in helping our clients to find the right partner builder in the process. And to make sure that we have found a person or a company that is highly motivated in the same way we are to serve our clients interest deeply. Unfortunately, the corollary problem that the dark side is just an industry issue that there are a lot of builders who aren't up to date about building science and the new things that are happening with building engineering. And for the builders out there who aren't learning and aren't keeping up it's just a problem. We generally avoid those and find the ones who are good learners and who are partners. The good thing for us is we've been around for 45 years. We've built in many parts of the country. So in most cases we know someone who we've already worked with as is the case in our Denver project right now. Or we know somebody in that area who can make a referral to somebody else. So our resources and our connections are pretty helpful that way. Yeah, it's funny. So our website gets hit. We get approached pretty frequently these days, maybe once a month, twice a month by companies coming from Europe who say we have a successful free-fab or sometimes even Asia product in Europe or Asia. We want to enter the market. You help us get customers but also can you help us get connected to local builders because it seems like that's one of the pain points for these newer entrants. Let me just throw out another secret that's no longer going to be a secret. But we've learned that renovation contractors are usually a better fit for pre-fab partnership. Interesting. Then new builders. Simply because the renovation contractors are more accustomed to the kind of rhythm that's involved. It's a very fast process. And they're usually problem solvers. So if there's something a little different that's unusual, it doesn't throw them for a curve ball to them. Where sometimes the kinds of builders who are only doing new construction have a lot of habits and procedures in their process. And then our offsite pre-fab throws them for a loop that's out of sequence with their normal behavior. So renovation contractors are usually better fit for us. That makes sense. I don't think we figure that out. If we don't go from an area, we usually just try to find a couple of experiences with the panelized stuff, even if it's not like the manufacturer. And that's sort of all kind of really quick. All right. Final fire on question. So I know you guys have done some work on Path of Houses recently. We actually get a lot of demand for Path of Houses and Zernet Energy stuff, particularly in California. Can you tell me a little bit about how you achieve that? Sure. We're. If you go to our Bensonwood website and in the area where you find our building systems, under a chequeconic. You'll see kind of a selection of wall types that we offer and then you'll see an opportunity that we call Flex, build with a pH for, you know, for its connection to passive house, about how we accentuate each of those building systems to bring them to the passive house level. And so most of our building systems, all of our building systems have cellulosis and insulation and one of the wall types has wood fiber as an exterior continuous insulation layer and then the other one has a zip system, you know, on the outside and then we use a TGI or an I-Stead to minimize the thermal bridging and thicken the wall cavity. So we have, you know, several ways of achieving it and that's important and the Flex idea for passive house is really critical because each of the climate zones, you know, from climate to, you know, climate zone two, generally has, you know, completely different requirements to get to the passive house level. And so there's not like one passive house solution, there's kind of a passive house system solution. But we've really opted to stay away from phones, you know, it's kind of the plastic element and to stick with kind of natural materials cellulose wood, etc. kind of sort of saying instead of doing like more of a standard zip, this is kind of your answer to that more naturally. Yeah, yeah, we'd like a wall cavity. Okay, let me get. Well, thanks so much. This has been really great talking. The final question, which I ask everyone, is what are you most excited about for your company or for the industry for the near future? Well, what I'm most excited about is what the industry needs and that we're trying to be leaders for and that is to normalize high performance buildings so that all of our buildings are using much less energy and no fossil fuels. We have to do this as a country. We have to do it, you know, as citizens of this planet for the climate crisis. You know, we should have eliminated fossil fuels and buildings a long time ago, but we're stuck with it here and it's unfortunate because building high performance, good quality buildings that are even healthier for people that's actually not a heavy lift. We know how to do it. It's not advanced technology or anything. It's just good quality building. And so to be leaders in how as an industry, we move away from fossil fuels to heat and cool buildings is important for us, but you know, it's just plain important for the industry. Terrific. Thank you so much, Ted. I really appreciate your leadership on this. And for taking this time to speak with me today, if you want to learn more about some of the stuff we talked about, you can visit Bensonwood.com or UnityHomes.com and the transcript of this will likely be up on prefab review.com with about 5,000 other prefab articles. We're nice talking to you and hopefully we get to speak again soon. Good to talk to you as well. And thank you for the opportunity. Thanks.