Scott Stowell, the former executive chairman of Irvine-based homebuilder CalAtlantic Group Inc. and chief executive of its predecessor company, Standard Pacific Corp., has overseen the building of tens of thousands of homes across the country, including mega-homes in some of the top residential developments in Orange County.
Now, the prominent OC housing executive, with more than 30 years of experience in the sector, has his eyes on a decidedly smaller type of housing product.
He’s taken on the CEO and chairman role for Modal Living Inc., a Salt Lake City-based startup that designs, manufactures, and installs modular backyard homes and offices.
The company’s product, which is expected to have a large base of potential buyers in California, aims to “combat the affordable housing crisis while empowering homeowners to maximize their property and earn additional income,” according to Stowell, who still counts ties to large national builders and has other business interests.
Stowell recently announced plans for the 2-year-old company’s latest $4 million funding round.
All-In Plan
Homes from Modal range in size from 338-square-foot studios to 567-square-foot two-bedroom units, and range in cost from $194,000 to $249,000. The all-in pricing “includes everything from permits to installation,” the company said.
Modals take 8-12 weeks to permit, 6-8 weeks to manufacture, 1-2 weeks for site prep, and one day to install, according to the company’s website. Homes count a variety of stylish flourishes, and come equipped with a bathroom, kitchen, and living spaces, and “are designed to fully maximize space,” the company touts.
According to the company, it has signed contracts worth $6.5 million to date.
California Focus
Plenty of growth is possible in supply- and land-constrained markets like California, according to Modal’s marketing pitch in its recent fundraising efforts. It estimates a potential market in just the Golden State to be more than $250 billion.
Accessory Dwelling Units (ADUs), also known as backyard homes, “have become the go-to solution for affordable housing,” the company said.
California’s seen its ADU market increase 214% per year from 2016 to 2019, when sales hit $2.5 billion, according to the company.
The startup’s initial focus is backyard homes, but the company plans to expand its product line for hospitality, multifamily and affordable housing developments, it says.
It also currently offers a smaller, stand-alone “pod” that can be used as an office or gym, among other uses. The pods run 119 square feet and are priced at $59,000.
Lennar Sale, Toll Board
Modal has reported raising some $4 million in debt and equity from seed investors to date.
The company is valued around $15 million, prior to its latest funding round, according to details on the offering from crowdfunding platform StartEngine.
It’s a modest valuation for a builder, compared to Stowell’s prior work.
In 2015, he oversaw the creation of housing heavyweight CalAtlantic, through the merger of Standard Pacific and Ryland Homes of Westlake Village, a $5.2 billion deal. It was the country’s fourth-largest builder by sales.
In 2018, CalAtlantic was acquired by Miami-based Lennar Corp. (NYSE: LEN), a nearly $9.3 billion transaction that created the country’s largest homebuilder.
Stowell served on the board of Lennar until April. The $32 billion-valued company has long run its West Coast operations from OC.
At the start of November, he joined the board of Fort Washington, Pa.-based Toll Brothers Inc. (NYSE: TOL), the luxury homebuilder that counts several projects in the area.
He’s also long served on the board of Newport Beach insurance giant Pacific Mutual Holding Co., the parent of Pacific Life.
Stowell’s involvement in Modal is a result of Capital Thirteen LLC, a Newport Beach-based family office he started two years ago that invests in real estate and early-stage startups.
“One of our first investments was in Modal,” he said in announcing the company’s latest funding plans. “It has been so fun to be a part of their exciting growth.”
