Canada’s Plan to Become the Prefab Construction Capital of the World

Wednesday, April 23, 2025

• Canada’s lumber plan: A proposal by the Canadian Prime Minister would create a new government entity that would support the country’s prefabricated construction industry.

• Sunshine squeeze: Florida’s condo market is being reshaped by costly safety mandates, soaring insurance, and skyrocketing fees—pushing owners to sell and buyers to bargain.

• UNder construction: The United Nations’ One and Two UN Plaza buildings will receive $548 million in bond- and equity-funded renovations, backed by New York City and long-term UN leases.

• Cashless crossover: NBA arenas are turning to AI-powered grab-and-go tech to keep fans in their seats and cash flowing during the playoffs.

• Multifamily outlook webinar: Learn how data and tech are helping multifamily leaders adapt to tighter margins and rising renter demands in 2025. Sign up

• Investment tech webinar: Discover how leading firms are using AI and data analytics to make smarter, faster commercial real estate investment decisions in this insight-packed webinar. Sign up

Editor’s Pick

Canada’s Plan to Become the Prefab Construction Capital of the World

America’s trade war is creating some interesting side effects. Countries around the world are starting to think about how they will be able to survive with lower American demand for their products. Canada is one of those countries. Lumber is one of Canada’s largest exports and America is its largest foreign market. Approximately 60% of Canada's softwood lumber production is exported to the United States. Now Canada is bracing for a drop in exports to its largest trading partner to the South. In the new tariff regime, Canadian softwood imports will face a 25% tax. This new levy is in addition to an existing effective duty rate of approximately 14.5%, bringing the total effective tariff on Canadian lumber to nearly 40%. Some politicians think that they have a way to spur domestic use of Canadian lumber: by growing the country’s prefabricated construction industry.

The current Canadian Prime Minister has proposed creating a new government entity called Build Canadian Homes that would have a mission to “building affordable housing at scale (including on public land), catalyzing a new housing industry, and providing financing to affordable homebuilders.” One of the ways that Build Canadian Homes would “catalyze” the new housing industry is by “providing $25 billion in debt financing and $1 billion in equity financing to innovative Canadian prefabricated home builders.” The government also plans to make bulk orders from some of Canada’s prefab home builders and change zoning and building codes to allow for more prefabricated structures.

If this were to happen it would be a huge benefit for some of Canada’s PropTech industry. Canada is already home to some of the most innovative companies in the modular housing space like Boxly, Axe Buildings, and Intelligent City. As more government money is put into modular, private investment is sure to follow, creating an ecosystem for modular construction that is far more favorable than in the United States.

While exciting, the plan to support the Canadian modular construction industry might be little more than a pipe dream. A snap election is scheduled for next week that could replace the controlling party and Prime Minister. The conservative candidate, Pierre Poilievre, does not share the same enthusiasm for modular construction and instead will focus on cutting regulations to spur more development.

Overheard

Florida’s Real Estate Owners are Finally Feeling the Cost of Recent Disasters

Florida’s condominium market is undergoing a significant transformation as a result of new safety regulations and escalating costs. In response to the 2021 Surfside condo collapse, the state enacted legislation mandating structural inspections for buildings over 30 years old and requiring sufficient reserve funds for major repairs. These measures have led to substantial special assessments for many condo owners, with some facing fees exceeding $100,000 per unit. As a consequence, a growing number of owners are opting to sell their properties, contributing to a surge in condo listings across South Florida. ​

The financial burden of these assessments is compounded by soaring costs. Insurance costs in Florida have risen sharply, with some premiums increasing by over 100% in recent years. HOA fees have escalated as associations pass on the costs of compliance with the new regulations. For instance, in Hallandale Beach, condo owners are facing higher fees to fund reserves and repair costs, leading to increased financial strain. ​

These challenges have resulted in a cooling of the condo market, with a noticeable decline in sales and a rise in inventory. In South Florida, condo listings have more than doubled since early 2023, yet many units are selling at significant discounts due to the added costs and uncertainty. Buyers are increasingly cautious, often negotiating lower prices to offset the anticipated expenses associated with older buildings. This shift indicates a broader trend where potential buyers are exploring other housing options, leading to a less favorable market for condo owners and sellers alike.

Fast Take

UN Plaza Gets $548M Upgrade Backed by Bonds and NYC Support

Two high-rise buildings in New York’s United Nations complex — One and Two UN Plaza — are set to undergo major renovations funded by $365 million in municipal bonds issued by the United Nations Development Corp. These upgrades include a new lobby, HVAC improvements, and indoor bicycle parking. Turner Construction will lead the work, with project management by Cushman & Wakefield. The bonds are primarily backed by lease revenue and secondarily by a pledge from New York City to cover any debt shortfalls, earning them strong AA- credit ratings. The city’s support reduces risk for bondholders in case of lease interruptions.

The total project budget is approximately $548 million, with $183 million coming from the development corporation’s equity. The two buildings, constructed in 1975 and 1983, have long served as stable office space for the UN and foreign missions, maintaining near-full occupancy. However, risks remain, including potential cost increases tied to trade policies and geopolitical threats like terrorism. Despite these concerns, the UN’s continued tenancy and use of all renewal options adds long-term stability. The bonds were issued as taxable 10-year notes yielding 5.56%, reflecting investor demand and the perceived reliability of the project.

Are You Enjoying This Newsletter?

Propmodo Daily is written and edited by Franco Faraudo with contributions from readers like you and the Propmodo team.

📧 Forward it to a friend and suggest they check it out.

🔗 Share a link to this post on social media.

🗣 Have ideas for future topics (or just want to say hello)? Share your feedback and tips at [email protected] or connect with us on X through @propmodo.

✅ Not subscribed yet? Sign up for this newsletter here.

📫️ Please add our newsletter email, [email protected], to your contacts to make sure you don’t miss any updates.

Enjoy reading about trends and innovation in commercial real estate? Subscribe to Propmodo.com for unrestricted access to reliable, data-driven journalism and exclusive insights available only to subscribers.