December 11, 2025

Part 1 of a 2-part series on Cloud’s partnership model for modular multifamily development

Developers we speak with who are considering modular construction share the same concerns: Will lenders approve it? Will the GC and factory coordinate? Who’s accountable when there are two jobsites instead of one?

Modular offers real advantages — lower costs, faster schedules, more predictable quality — but it also introduces risks most developers don’t want to manage alone. Early entrants like Katerra and Veev tried to solve this by vertically integrating everything: factory, GC, design, software. But controlling every part of the value chain brought enormous fixed costs and utilization risk. When demand fluctuated, the whole system cracked. 

Cloud took a different path.

Instead of building another factory, we built a horizontal partnership model that aligns the best factories, general contractors, and sub-contractors around standardized scopes, schedules, and incentives. The idea is simple: Let specialists do what they do best — and make the system work together as one.

The result is a way for developers to tap into modular’s benefits without betting their project on untested integration or inexperienced teams figuring it out for the first time. Cloud gives them a streamlined process, executed by an A-team that’s been delivering modular housing for years. 

Scaling Capacity, Not Overhead

When Cloud started, we looked seriously at vertical integration. On paper, owning a factory promised control: a single supply chain, consistent output, fewer dependencies. But we’d seen the inside of too many plants to ignore a hard truth: Most modular factories in North America run below 60% utilization.

The issue isn’t a shortage of production capacity. Factories idle between projects, or run four-day weeks, or take on one-off work just to stay busy. That utilization gap destroys margins and destabilizes the entire system.

If Cloud had built a plant, we would have tied up $25–40 million before producing a single module — and then we’d spend years trying to fill the line. The effort would distract from Cloud’s work standardizing building assemblies to reduce costs, and bringing real projects to market.

So, instead of adding another plant to an oversupplied landscape, we decided to work with the plants that already exist — groups like Guerdon, Autovol, Plant Prefab, and others whose teams have collectively delivered thousands of units across multifamily, student housing, and hospitality.

Our role is to bring factories well-designed, financeable, production-ready projects that keep their lines full. For developers and investors, this means:

• No fixed-asset risk
• Production that can scale up or down with market cycles
• Access to proven factory expertise without carrying its overhead
• Budget certainty for factory scope (representing over 30% of total construction costs) through factory ROM that is a bill of materials

It’s a more resilient model for the industry — and a safer one for every stakeholder on a project.

Reducing Risk by Aligning Specialists Around the Same Playbook

Modular development creates two parallel jobsites (the factory and the field), two teams (offsite and onsite), two work products (factory-built and site-built components), and a transportation and crane-set operation that ties them together.

Developers shouldn’t have to coordinate all of that.

Cloud’s partnership model assembles experienced practitioners in each discipline and aligns them around a single, standardized workflow — contract structure, production milestones, QC procedures, draw schedules, installation planning, and finish procedures.

In practice, it means:

• Factories manufacture what they’re best at
• GCs build what they’re best at
• Subcontractors efficiently execute clear scopes
• Lenders receive documentation they can confidently underwrite
• Cloud runs the interfaces between these teams

For developers, this reduces risk where it matters most: fewer unknowns, fewer mistakes, and fewer coordination failures that can drive up costs.

Seeing the Project the Way Lenders Do

Every modular deal lives or dies on financing. Lenders don’t just ask, “Does this pencil?”  They ask: “What does this team know?’ “Who is taking the risk?” “Can this team deliver on time?” and “What happens if the modules are delayed?”

We’ve learned that success depends on understanding how lenders evaluate modular risk. Because we work across the full ecosystem — from design through production and delivery — we can anticipate what underwriters need to see and structure our contracts and schedules around those requirements.

For example, factory payment milestones can be aligned with lender draw reviews so capital flow matches production pace. And quality control and logistics can be documented in ways lenders can underwrite, not just hope for.

We also spend time with lenders explaining how modular actually works: how factory QC replaces site inspections, how risk shifts once modules arrive, and what insurance and bonding structures cover. Those conversations reduce friction and improve confidence.

For developers, this means:

• Faster, smoother loan approvals
• Fewer lender-driven redesigns
• Underwriters who actually understand the delivery model
• A capital stack that stays intact when schedules change

In today’s lending environment, that’s half the battle.

Leveraging Experience Instead of Relearning It

Each of Cloud’s partners brings years — sometimes decades — of modular experience. Some teams have delivered more than 200 modular projects; others bring deep regional knowledge of logistics, code, or production sequencing.

We’ve learned that surrounding ourselves with that experience is the best way to ensure a cost-saving execution. A factory that’s perfected its QC process in Idaho can apply those same workflows in California. A GC that’s managed multiple crane sets knows how to plan laydown and trucking windows without surprises.

We share those lessons across projects — through working sessions, shared templates, and coordination meetings. It’s how we avoid repeating mistakes and help every project start a little smarter than the last.

Developers see the benefit right away: they’re not betting on an untested system. They’re working with a group of specialists who’ve done this before.

Removing Single Points of Failure

Modular projects evolve. Sometimes a lender’s underwriting criteria change, or a project needs a factory with different bonding capacity or warranty terms.

We’ve learned that having multiple pre-qualified factories and GCs is the best way to keep projects moving when those shifts happen. 

On a recent deal, upon securing construction financing, we learned that the lender requirements were more stringent than initially anticipated. Lender requirements can often evolve with the capital markets. We transitioned to a different factory partner that met the requirements more robustly, and kept the project moving. Re-negotating would have resulted in a mulit-month delay. 

For developers, this flexibility is a key form of risk reduction. Your project stays viable even when external conditions change.

Driving Systematic Improvement Across the Ecosystem

Construction is too complex and capital-intensive for any one company to excel at everything. Industry maturation favors specialization, not integration.

Cloud’s model supports that reality by curating a network of best-in-class partners and aligning them around shared incentives and standardized, repeatable processes. Partners aren’t simply vendors; they’re stakeholders accountable for project outcomes. This drives proactive collaboration and problem-solving that keeps projects on time and on budget.

By focusing our resources on orchestration instead of execution, Cloud concentrates its energy on the activities that matter most:

• Field cost reduction
• Product and design optimization
• Partner performance oversight
• Task-time optimization
• Systemwide data capture

The result is a virtuous cycle: Factories get steady, predictable work. Developers get faster, more reliable delivery. Investors get a scalable, asset-light platform with defensible process IP. And Cloud’s process gets stronger with every project.

This article is Part 1 of a two-part series exploring how Cloud reduces developer and investor risk through its partnership model. Part 2 will detail how Cloud curates excellence through its rigorous partner-selection process — and what “best-in-class” actually means in modular development.