Innovative Real Estate with Three Squared, Inc.
As specialists in efficient residential and commercial prefabricated design, Leslie Horn, Breck Crandell, and Jill Ramirez of Three Squared, Inc. share their greatest insights, tips, and case studies from their years of experience in the industry. They'll be giving you their best advice through, trainings, guest features, and Q&A segments so you can turn your innovative vision to a reality.
Innovative Real Estate with Three Squared, Inc.
The Circular Economy: Designing a Building for Its Own Funeral
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We dive deep into the future of construction: Design for Deconstruction (DfD) and the Circular Economy. Instead of swinging wrecking balls and dumping tons of waste into landfills, what if we designed buildings to be taken apart, repurposed, and regenerated?
Jill and Leslie break down how Three Squared is challenging convention. We discuss the perks of DfD for developers to real-world examples like preserving historic barns and panelized core systems. Plus, we get into the nitty-gritty of Mass Timber funding, navigating regulatory hurdles, and why "material passports" could completely change the USA building industry.
Episode Highlights:
- Why should we be designing buildings to be taken apart and reused, not dumped in landfills?
- How "Design for Deconstruction" (DfD) increases long-term profits for developers.
- Navigating the financial proformas, US funding hurdles, and regulatory gaps.
- What is a "material passport”?
- Lessons from historic barn preservation to panelized core systems built for easy repair.
View the full show notes for Episode 83.
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We've already talked prefab because that's going to save you time and money on the job site. It's about protecting the community.
SPEAKER_00It's about the health and well-being of the residents. Let's talk about smaller ways to implement these solutions. A real estate developer, they've got to have like an ROI, right? Like what's in it for me.
SPEAKER_01Welcome back to another episode of Innovative Real Estate with Three Squared Architecture. Today we're going to be talking about a great topic: circular economy and designing a building for its own funeral. So we are going to be talking about how we reset our minds to think about more of disassembly for buildings rather than demolition. So the overall concept here and the inspiration behind this is that Three Squared loves to live by our core value of being a good steward. That means we love to be a good steward for the built environment. And we have a massive issue with trash buildings that just don't have a very long lifespan. They are built to last maybe 30 years at best. And so how do we start to address that and build better? So that includes building more sustainably, but also making a project pencil. So all of these things are keeping a project realistic and buildable. And so three squared is obviously known for building with alternative materials. So we work in modular steel shipping containers and we are now working in mass timber. So we start to focus on how can components of these buildings start to be disassembled. And that means we start to talk about the mechanical fastening systems, how these assemblies are bolted together rather than permanently glued, um, so that certain components of the building can be reused in the future. And we start to talk about a circular economy of building. Leslie, I'm gonna hand it over to you to see what some of your thoughts are because I just a load of key phrases here.
SPEAKER_00You did. And when this podcast name came to um our our laptops here, I kept thinking, wow, this is amazing. So doing doing the research really it so fit within the core values, like you said, the values of three squared. Breck just built his house out of foam panels that were reinforced with steel, but they were panelized, right? Uh, containers, cargo architecture, in addition to now mass timber that we're really so very excited about. But when I started looking at the circular economy and the design of deconstruction, man, there is a whole uh litany of information. And it's amazing because it fits within the sustainability culture. And instead of demolition, it's deconstruction. So when we talk about the economic model, it's about designing to eliminate, like you said, waste and then also to regenerate resources by keeping materials that in continuous use. I mean, our landfills, holy smokes, are just getting, I mean, they're just abused. And how much can we really? How long does it take for a steel plate to um get back to Mother Earth? I mean, you have to melt it, but if it doesn't make it, all the nails, all the screws, all the all the other stuff. But at the end of the day, if we design for deconstruction, and there is an acronym DFD for this, we're just gonna say design for deconstruction. It is actually coarse circular strategy in architecture of all places, which is really exciting. It's exciting because I feel that our team are leaders, our team leads the path in in the architecture and then in utilizing prefabricated and modular buildings. But if we can do it in a plan um during the actual planning and during the permits and during all of the construction documentation, and if we can actually create products or a building's end-of-life plan, right, by ensuring that these components can actually be disassembled and reused rather than demolished and sent to landfill. What a great gift and what a great core value that we belong to, because being a good steward is not just to our clients, but it's also to Mother Earth. And everybody knows when you talk to our team, we're very focused on that. Breck's house, when he built his home, did not have a dumpster. He did not need a dumpster for waste. Period. Like what building construction site needs that? Uh can actually claim that, I should say, because all of them do. And then the dumpster just keeps getting reloaded, reloaded, and tossed into landfills. So actually, the three creep, three key pit principles, oh my goodness, the three key principles in a circular economy are number one, just to reduce. So how can we reduce materials, right? Number two, reuse. Can we even in a building material reuse something that's already been done, like a container, right? Or actually, can we recycle and recover? Can we break down current materials that would allow us to uh fit within this culture? Um, and how we design for deconstruction, it's about reverse connections, right? And so taking a product that we can uh reverse engineer in the demolition, instead of raising a building, which is the official word of demoing, um you take and you cut the welded beams or the welded connections from a container and you cut those, and then that container gets moved as opposed to squished down and then melted again. Why not take something that's already been built, used? Hey, and I think even with mass timber and with the with the SIP panels and prefabricated panels like that, it makes perfect sense. I don't know. We're onto something. Jill, what do you have to say about this?
SPEAKER_01Well, I agree because I think it's uh it it might be perceived as like a radical mindset, but that's what we do at three squared. We just make shit weird and we make it work because you have to know what the normal is to start to question why are we doing it this way and how can we do it better. So, like if we think about construction in a traditional linear sense, the the mindset is more around take, make, and then waste. But we're trying to reshift our mindset into borrow, use, and return. So anytime that we present these alternate methods, a lot of times we get pushback from contractors, and it's more so just because they're not familiar with it. And so these methods are something that's already been out there and it's a concept that's already being used. So I'm just gonna throw out an example that's very personal to me because my grandma, who lives out in Westphalia, Michigan, um, it's kind of like the middle of nowhere, super small town, has one stoplight. Maybe there's two stoplights now. She had her barn that was built before she was even married in the 1950s. So she was guessing that this barn was erected probably around 1945. In 2019, she broke the news to the family that this barn had to be demolished, which was super sad. So we all just like came by and had a goodbye, farewell ceremony for the barn and got to do a final walkthrough of it. But during that process, I got to go inside this barn and take a bunch of photos of how nearly pristine the interiors were. So mass timber beams and some panel siding on the interior was near perfectly preserved because it was protected from the elements. And so these components of the building start to become super valuable. And rather than just completely demolishing this barn, and again, I'm gonna go off and give a little bit of clarification on the why uh this barn had a crumbling foundation. It was just too expensive to repair the foundation, rebuild from the ground up. So my grandma had to make the unfortunate this decision to demolish the barn. That being said, the mass timber components and those the lap siding on the interior were snatched up so quickly. Like those building elements were super valuable and people wanted to purchase them to reuse them in future buildings. It's a super practical, manageable, scalable solution of what's already being done today. So if we can bring those type of examples to contractors, people start to know what we're talking about and we don't sound so radical. Another example is Breck's house. So the core system of his house is all located centralized with the most expensive parts of the building being water and utilities, all coming to the same source. When he thought about creating a panelized system for this core, it was more so creating panels that could be popped off. So if there's ever an issue with your plumbing and you need to get into your wall and repair it, you're not just putting a hole in your drywall, you're actually popping off a panel, going into repair, and then placing the panel back on. People in the automotive industry design vehicles for that way so that a vehicle can be repaired. Vehicles are expensive, but buildings are a shit ton more expensive than a vehicle. They are so why don't we think about that way for buildings? Why don't we think about access to these systems that need to be repaired? And instead of just blowing a hole through it, why don't we make it more accessible so that we can continue to use it and stop contributing to the landfills? Because the construction construction industry is one of the most uh wasteful in industries out there where we're contributing to landfills.
SPEAKER_00It is the number one reason for waste in this planet is is is construction waste. It is the number one.
SPEAKER_01So again, just going back to our rules of disemb disassembly and uh designing for deconstruction, let's talk about some of the elements that make buildings not built to suit that way. We talk about including permanent adhesives, chemical bonds, those kinds of things make it really difficult because components are just going to break rather than being unscrewed, disassembled, and readily available for reuse. So if we start to think about the prefabricated nature of buildings, we've already talked prefab because that's going to save you time and money on the job site. If you're creating elements in a safe, environmentally sound space and then transporting it to a job site, setting it in place and walking away with a building frame in a much faster time frame. Those are prefabricated elements that have to come together in a certain way. So if we start to think about panelizing and being able to disassemble in the future, we're just contributing to this idea of circular economy.
SPEAKER_00You know, Jill, I feel like what we're doing is we're just adding on to the pre-con or the pre-u-planning for adaptive reuse, which is really, if if if people haven't really seen a lot of that activity happening, taking an old shopping mall and then adapting all the current buildings. Uh, we're taking on a project up in Port Austin that have barracks and things like that, but adapting its old use into something new, um as opposed to tearing it down. So I feel like what we're doing with this type of conversation is we are creating even in the beginning plannings of a building. It's uh let's if the building has to go, it has to go. However, what can we do in order to make it a sustainable so long? I think is the deal uh in moving forward with this type. But it's brilliant. I think it's super brilliant. We take a look at some of the demolition that's happened, and Detroit's a great example of this, and it's not just about Detroit, it's happened in every city. But you know, when when we had the grand escape of people who were, you know, in the back in the 60s when we went from 2.3 million people down to you know 700,000, like in a matter of two or three years, mass exodus. It left all these homes. And then they got terrible. And they, I mean, like instead of if there was a little pre-thought in advance, a lot of that material could have been reused and updated. Uh, we know that that happens, and then when it gets demolished, then if it's not going into a landfill, it went into the foundation um underground, which is now causing so many other problems. So I think being more thoughtful in this process is being a good steward.
SPEAKER_01Agreed. And I think that we're already playing the game by utilizing shipping containers and mass timber panels because we utilize these systems the way we compare them inherently to Legos. So we're stacking these buildings the way that you would stack a Lego system. Legos are deconstructible.
SPEAKER_00You yeah.
SPEAKER_01Can you imagine if you just like couldn't take apart your Legos? It would be null and void. No one would want to use Legos. So if you think about unbolting a building, you start to think about future applications and repairability of the building while it's in use. So I think that those key values are just all emphasizing this being a good steward to the built environment and preventing material from clogging up landfills. Um, while we might not be able to design a building that can last forever, we can start to think about it in systems, which is another one of our core values, is thinking in systems. We can design it so that building's components can be repurposed part by part.
SPEAKER_00I like it. Hey, was your grandma sad when the building left?
SPEAKER_01She was, but at the same time, she was like, it's time. Been there a long time. I think the rest of the family was more sad than she was. She was the one responsible for its upkeep. She was like, I I've had I've made my peace with it.
SPEAKER_00Wanted to throw that question in there. Um, Jill, talk to us about some of the rules about disassembly and what like we know what the rules are for assembling projects and um and buildings because there are very specific rules that have to, we have to tend to to meet building code. So are there rules in the disassembly and are there good practices?
SPEAKER_01Well, I love this question because that's taking us on the the other end of the spectrum where we have to think about the difficulties and the challenges where we propose a radical idea and we know it's not quite there yet, but we can implement it in small bite-sized scalable pieces to actually make it feasible for developers to take on. Because it unfortunately, a project has got a pencil. You can't just build something and be a good steward and run yourself dry and have no budget. And then the worst thing that could happen is like a project is under construction and then the developer has to close up shop and say, I can't continue because I can't afford to finish this product. So code and regulations, unfortunately, a lot of building codes just aren't quite there with being super clear about what materials can be reused structurally. And we figured this out with shipping containers. So we're getting there step by step. We actually contributed to some of the international building code code provisions specific to shipping containers that are now included in code books. So it is a viable building material. However, decomposing or deconstructing a building isn't quite there in terms of documentation, making sure that the tracking systems are aligned. What are the reconnection pieces in order to reuse a panel and making sure that it's structurally sound? All of those things in factoring assembly for construction are kind of the difficult areas that there's some unclear areas of how to make it more practical. So when we start to think about the overall benefit to a builder and a developer in finances, that's where it starts to make a lot more sense. Is if we think about a building that's got a longer lifespan, how do we make it pencil for the developer and make sure that this actually becomes a core value for everyone who's building?
SPEAKER_00That is the key. I mean, that is the absolute key. You know, we're dealing with our Cochrane Commons project and our Proforma. And when the team suggested, and I use that word loosely, um, that this would be mass timber as opposed to another material that's sustainable or even prefabricated, I really had to take a step back because in development, I mean, you can you can have all the bells and whistles, but if you can't pay for them and it then in the back end, you can't get enough rents or sell it for that price. What's what's the freaking point? There there is zero. So in order to see your and it has to pass a bank test. It's not just me saying, Yeah, I think I can make it happen. Your funders, they're the ones that are scrutinizing the heck out of it. And you know what? You can say, No, but it's sustainable, it's gonna be deconstructed in a hundred years. They're not gonna give two shits about it. Like, they're like, no, we really need because we we don't want to take that building back, right? So as a developer, it's really important to um utilize. So, for example, in mass timber, one of the only ways we're gonna be able to do this is because there are tax credits. Number one, more and as importantly, um there are uh grants for building with wood in the United States of America because it's a newer technology. I mean, right now, if we had to go uh now, just with the caveat, we're not building the whole project out of mass timber because right now we don't have enough facilities close enough to us. We can buy, we can buy some of the pieces, uh, and we talked about this in our last in our in one of our last episodes, but we can certainly buy some of the glue lamb and some of the really big pieces, like the huge, like that, it would just make this building like shine. But they'd have to be put on a boat with tariffs and travel across, you know, thousands of miles, and then get put on a um on a truck. Good luck with that these days, and transported here as well. So that just uh that's what I was thinking when when the team suggested this. I'm like, oh man, it's never gonna happen. We can't pour $450 just for construction costs. What are you guys thinking?
SPEAKER_01Um component to that conversation, Leslie, was use mass timber where it makes sense. So we automatically switched to a hybrid building construction, so a combination of steel and mass timber CLT panels because glue lambs are some of the most expensive mass timber components, and a lot of manufacturers in the US differ in what they provide. So some only provide CLT panels, some provide glue lamb, some provide both, but all kind of have different standards and sizing. So that's where Europe is a little more ahead because they've standardized their system so much. But where we talk about hybrid um construction and utilizing steel for your main structural elements and then CLT panels for the floors and ceilings, it starts to pencil, it starts to make sense, and then we can provide this biophilic building that's contributing to a better built environment. Um, and so that kind of starts to relate back to this initial concept of the design for deconstruction. So we're thinking about it so far ahead in the game that before we've even constructed this building, components of this can be removed and you can economic put it into a circular economy to just kind of contribute to the built environment. You can think about health benefits, having better air quality, less VOCs emitted into the environment, and then you're using fewer adhesives, coatings, and binders that are bad for the built environment.
SPEAKER_00So, Jill, dive into this a little further for us. Um, I know you've gone to, I mean, you've you've done the heavy lifting and the the research and for the past, I think, two or three years now, um, and know everything, not everything, but you you you've you're you're a wealth of knowledge when it comes to this. But talk to us a little bit because as um a real estate developer, they've got to have like an ROI, right? Like what's in it for me? That's the big highlight for all of this. It can't just all be about Mother Nature and be doing good for the community. Tell us how that works.
SPEAKER_01Yeah, so part of my studies in Mass Timber involved attending a conference in 2024 in Finland, which was just incredible. You you put all of your best resources into one room and talk about how we can collaborate. And this was established by a memorandum of understanding via Gretchen Whitmer. And so that has um been signed. It's back into um it's back into play. So we still have that memorandum of understanding to continue to collaborate and generate knowledge from Finland. And apply that here in Michigan. So we've made a lot of uh leaps and bounds in the mass timber realm. And that's why you see so many buildings out of mass timber here in Michigan, which I'm super proud of. So one of my friends that I connected with over in Finland, her name, her name is Nini Westerholm. She went to Tempere University and she was getting her PhD there. And lo and behold, last week she actually released a paper with some of her colleagues from the university. And we'll credit and source it in their links below so that you guys can check out her paper. But there's this fantastic collaboration where they were kind of researching these core values that we talked about today. I thought the paper timing was just kind of perfect for our discussion. And so I did a little bit more diving in about the core principle behind this paper is that buildings should be treated as temporary assemblies of valuable materials and not permanent objects that are going to be destined for demolition. So if we're talking about valuable materials, that's what the developer is going to care about. And that's what's going to make a project pencil is how does this bring value to the built environment, the people occupying the building, and the overall end users.
SPEAKER_00Yeah, I think um, I mean, we city municipalities and and zoning and actually let's just talk about the economy, right? In the city of Detroit, I can't tell you how many commercial sites are empty or at, you know, 15% capacity. And man, if you've got a storefront, what are your options? Like what are your options?
SPEAKER_01Agreed. And you can think about the lay uh the layers of a building that start to have different components and different life cycles of what does the exterior facade have a lifespan of versus interior components. Obviously, the interior components that are more weather protected are going to last longer and be more viable for reuse. So those materials start to have more importance in the disassembly realm to reuse and construction elsewhere.
SPEAKER_00I would also see that there could be a lot of flexibility in this as well, because let's say there is a shift or a change and you want to convert and the city goes, yeah, convert this into you know residential. Uh, does this mean I have to tear down my building if I've used and I planned ahead and it's you know six stories? Cochrane common commons. Like, do I need to tear that down? What are your thoughts?
SPEAKER_01I think that's a fantastic question. And we can liken it to buildings during COVID. There was a mass exodus of office buildings because people just figured out, hey, you can work from home, you can work remote. We don't necessarily need our super expensive lease on this office space. So some developers started to convert office buildings into residential units. It was difficult because a deep structure bay in an office doesn't allow for light the way that a residence demands, but people have made it happen. And so it's components like that start to make it more realistic for repurposing an existing building rather than just leaving it empty and an eyesore that starts to fall apart because no one's maintaining and loving this building anymore. You can start to repurpose it and introduce a new code. Uh so rather than an office building, now it's residential. Um, those types of things I think start to become more feasible and scalable for different types of developers.
SPEAKER_00And I know that the AIA is also, I mean, they're seeing the benefits of it. It's it's hard. Um shifting and making changes are very challenging, but they even see the benefit in taking materials at the very end of the building and at least be able to get a financial reward for it, since materials can be sold or donated for tax benefits. I mean, there's always, you know, at the end of the of the service life. But the the beautiful thing about that is our landfills really benefit. That's the key point there, right? Like it we're not having to, you know, take truck after truck um and remediate all our trash all the stuff and really store it in a way. Um tell me a little bit, because I know you've done some research on this. Um, how far away do you think we are, or how far behind do you think we are in some of the I guess benefits that the European countries have? And I know people don't like to have the comparison, but I think that sometimes the mindset of construction in other countries, I think we have an opportunity to learn from.
SPEAKER_01Agreed. Absolutely. So I think that if we're talking we as in three squared, we're already using these principles. I mean, Brex House is example number one, can shipping containers are example number two. We can just keep rolling down the list. But as far as the US goes, um, there's new systems that can start to be implemented to make this more feasible for other developers and builders alike to start to take on. So something in our research that we found is there's this new uh concept about material passport. So you start to identify where a material came from, when it goes into the building. So there's essentially a digital birth certificate for all components of a building so that future contractors can start to analyze where is appropriate for reuse of these certain materials. When was it born? How old is it? And how structurally sound is it? You need that type of data because that's another one of the difficulties of like, how do I deconstruct a building where you don't know who manufactured a certain component? You don't know what its load capability is, and then you're gonna have to start to pay more for structural engineering, um, the connection details, are those connectors available for reuse, or do you have to scrap those? And what level of exposure has this building had to the elements over the years? So all of those things come into play. I know that these ideas that we talk about are not simple systems, but when we start to again just talk about them in more scalable, manageable components rather than turning the entire system upside down, tearing it apart, and throwing it in a landfill, let's talk about smaller ways to implement these solutions. I think that's what starts to make it more viable for use in the US. And we when we really focus on the economic benefit to the developer, that's when it just makes sense because if a developer can only build their project if it makes sense in pencils, that's when it these principles are going to come into play.
SPEAKER_00Any hope? Any hope for the barriers that exist?
SPEAKER_01Um, I believe so because there's a lot more research that's out there. I mean, we're already doing this. Uh we're no stranger to shipping container construction. I think that a lot of our clients will kind of brag about their building being a cool factor. Everyone wants to just kind of knock on their door and get a tour. Um, I think that there's there's more uh data and material availability coming out. So I don't think it's like an immediate shift. I think it's going to be like anything. It'll be it'll be more of a gradual shift because I don't think that we can come out here and say this building is gonna last forever because it's just not. But I would like to say this building is gonna last more than 10, 20, 30 years. Let's design for a 50-year building and then components of that building that can be taken away and reused into another building. And then you start to think about the 100-year lifespan of a certain panel from a building.
SPEAKER_00I know we're getting ready to wrap up here, but I always go back to like our baseline of values, right? And better housing. And I I've heard Breck say this a hundred times. You know, better housing isn't just about people living in a house. It's not about that. It's about protecting the community, it's about the health and well-being of the residents. You know, what are you breathing in? What, you know, VOCs are on the walls and all of these, you know, these items that really take care of the health and well-being of each and every one of us. But it's also about the community. It's about building up a community and building the values of the homes and taking pride in your neighborhoods and having that type of, you know, like you're walking down the street after work, walking a dog and going, wow, I am so proud to be a part of this community. Um I think it's also about protecting the city and our our, you know, just the utilities and the weight that we do bear um on our grids and such, and all of the, you know, I'm not going to get political or anything like that, because we can do better in building, we can be better designers, and we can protect this investment. Where, you know, I've seen we've all seen projects, and I think there's a few houses in our neighborhood that were built, and I would, and what are they about eight years old now? Something like that. It would not surprise me. Maybe less, but it wouldn't surprise me that in 10 to 15 years they're out, they're done, they're gonna have to be demolished because of the poor quality of materials that that developer chose to make a pencil, and actually it penciled really well when everybody else was spending 175 a square foot for construction cost. Rumor in the yard was that they were at 135 to 140. And um, it shows the building is literally falling apart now, like in little pieces. You can see it. And so I'm worried about that as a culture. I'm worried that you know, we've we sometimes go to the other opposite end by not making quality buildings. And, you know, I feel strongly that better housing is about not just us, but about our community and about the city and taking and being good stewards all the way around. I think that's what I can end on.
SPEAKER_01Agreed. I think that you touched on a lot of important things, Leslie. I think this is a fantastic discussion. And I will just add in my final thoughts here that I think that what something you were touching on was the overall energy performance of a building. If you contribute a building that is just like built with better quality materials, it's better insulated, it's got a solid thermal energy envelope, and then the systems to heat and cool that building don't have to kick into high gear and they're used less and less because the building's temperature becomes stable on the interior. That's saving the environment from the electric power and the gas power to heat and cool a building and overall contributing to a better environment for Mother Earth, which is a really fantastic principle.
SPEAKER_00It is, and it can pencil for the developers. That's key.
SPEAKER_01It's awesome. Thank you. I think it's a been a fantastic discussion, Leslie. I think we have much more to come and discuss, but I'm excited for what 3Squared is going to implement out of this and how we're gonna start to rethink the systems that are out in the built environment. So last but not least, I'll just conclude by saying remember to like and subscribe to our podcast. You can find us anywhere on Apple, Spotify, and YouTube. We will drop the links and some photo references to what we mentioned today. And we look forward to hearing from you guys again next time. Amazing. Thanks, guys. Thank you.