SG Blocks, a New York-based company that designs container-based structures, has formalized a deal for international deployment of its construction technology.
The firm has entered into an agreement with Red Cardinal Holdings, a company that targets investments in green energy, real estate / infrastructure development and pharmaceuticals.
SEC filings show the license agreement grants Red Cardinal a 15-year world-wide non-exclusive license to use SG Block’s proprietary methods and technology to develop, manufacture, advance and promote code-engineered containers for safe and sustainable construction of buildings.
In consideration for the license, Red Cardinal will pay SG a royalty of 10 percent of revenues it collects and become a co-guarantor of SG Blocks’ debt.
“This partnership is monumental as our product will now be deployed internationally, impacting the global construction industry,” said Paul Galvin, the chairman and CEO of SG Blocks.
“This scaling means that the widespread availability of our GreenSteel product coupled with modular construction will allow for quicker, more efficient and green structures worldwide.”
SG Blocks essentially converts old shipping containers into buildings. Greensteel is the structural core and shell of SG Block structures. The company has built structures for companies such as Puma, Lacoste and Starbucks.
“The technical expertise of SG Blocks is unmatched,” said Joseph Rosa, the president of Red Cardinal Holdings. “We believe container-based buildings will modernize the construction industry and are looking forward to transforming commercial, industrial and residential real estate.”
The company has been actively making deals over the past year, with some agreements involving projects in the New York State area.
Last November, the company announced a partnership with Manhattan-based firm Palladium Management. That deal involves multifamily and mixed-use projects in the Greater New York area. The joint venture is said to be waiting for approval for 24 sites.
The SG Blocks deal comes two years after Forest City Ratner announced that it would build a modular tower at the Barclays Center in Brooklyn.
NYU professor Patricia Lancaster claimed the project “has the potential to be revolutionary,” but much of the initial euphoria has evaporated amid cost overruns, delays and technical problems at the site.
According to experts, modular construction has come close to the cost of the cheapest conventional methods, but has so far failed to undercut it.
Nonetheless, several of New York’s leading architects still believe that modular building is the future.
At a discussion hosted by the Institute of Architect’s New York chapter (AIANY) earlier this year, architects and developers argued that the reason modular construction growth has been slow in the US is the high cost of transporting large modules
David Wallance, a senior associate at FXFOWLE Architects, told the AIA panel that the solution is to build all modules in the shape and size of shipping containers.
This would allow manufacturers to use widely developed global infrastructure for the shipping of goods and dramatically lower costs. In the future, modules could be built overseas and then shipped to New York City, where they could be stacked in a number of days.