Containers to Condominiums
Interview with Leslie
By Randy Peyser
At the end of April, Leslie
Horn and her brother, Patric, co-founders of Three
Squared Inc.TM will break ground on “Rosa Parks,” the first 20-unit,
multi-family dwelling to be constructed in the United States — out of shipping
containers stacked like LegoTM
The containers are made of
steel, are fireproof and can be made into homes in less than half the time it
takes to build a home out of lumber. While shipping containers are used
frequently in Europe, they have never been utilized in the United States to
create multi-family dwellings or commercial spaces.
Leslie and Patric are not only building the first dwelling of this
kind in the U.S., they are also creating the standards for this new industry
for the entire country — including all of the building codes by which every
company in the future will have to comply.
When did you start this undertaking?
Leslie Horn: We started the
project in 2007 and got it approved in 2009.
Randy: Who is this housing
being built for?
Leslie: We’re creating
market-rate condos. Prior to building our first one, we are building our model
center, which is a 2-unit project that will also house our home office in
Detroit. More importantly, it will allow us to showcase our technology and
bring in other like-minded people who might like to build in a more affordable,
durable, and extremely energy-efficient way.
Randy: How are these
containers more energy-efficient?
Leslie: We are bringing new
technology to the marketplace through CargolincTM,
our technology company. For example, to insulate the exterior of a house, R19
insulation is used. The roof is R30. The insulation we’re bringing to the
marketplace is R140. It creates a soundproof barrier and has also been rated
for fire protection between walls. Our team is putting together some very cool
systems that redistribute power sources in order to decrease the amount of
energy it takes to live. This new technology will be available for licensing
later this year.
Randy: How did you get into
Leslie: In 2004, Patric and I, with some friends, rehabbed 30 houses in
Detroit. In 2007, one contractor asked me if I had heard about the shipping
container construction happening in Europe. I started researching this. Then
the real estate market in the U.S. tanked, and we needed to figure out our next
I woke up one morning and had
an epiphany . . . The first thought that came to my mind was: we are going to
build shipping container condominiums. We owned three lots down the street from
Wayne State University. That was in December 2007. We contacted architects, and
they either laughed at us or didn’t return our calls. But one architect did,
and he’s been with us ever since.
Then we took the concept to
the City of Detroit. Two years later, and after 16 public hearings, we got
approval to build the 20-unit condo complex. It took a lot of blood, sweat and
tears, plus a lot of communication with the local, county and state officials.
However, the housing market was still so bad, we realized by the time condos
were built, nobody would qualify to get the financing to buy them. Another
problem was that the investors were also laughing at our idea. Once again, we
had to step back and redirect ourselves.
At that time, Patric and I had very little development experience. We
recognized that we really needed to enhance our team, which is exactly what we
have done. We have attracted some of the top experts in the real estate
development field, plus top engineers who see our vision, in addition to seeing
what we can do as a company to create history in shifting the way we construct.
Randy: That’s a pretty tall
Leslie: Yes it is. You have
got to show up to the table big. In the construction industry, we are dealing
with very archaic types of construction. We can send people to the moon and
back, but we cannot build a house that can sustain an earthquake, flood, or
hurricane, and last 100 years.
This is an issue we can
shift. Shipping containers are built to withstand 150 mph winds on a ship at
sea. They are stacked 9 high, are held together with a strap and a C-clamp, and
filled with 60,000 pounds each. Their strength and durability excite me. An
earthquake won’t break the framing, and a tree falling across a roof won’t make
a roof collapse. So, more lives will be saved.
Randy: Is there a special
kind of siding on the outside?
Leslie: The beauty of this is
you can clad the exterior with anything — from brick, to stucco, siding, tires,
you name it.
For example, our model center
is being built on Michigan Avenue in Corktown, which
is one of the oldest communities in Detroit. They still have brick-paved roads,
and all the exteriors on that street are made of brick facade. When you drive
by our model center, you won’t know it’s constructed from shipping containers
because we’ll clad the exterior in brick to fit the entire persona of the
Randy: What do they look like
Leslie: They’re like any
other house. You can do drywall or leave it industrial. Basically, we are
replacing wood framing with shipping containers. For a 1200 sq. ft. house, you
can take 4 containers, that are 8’ wide, put them side
by side, and cut out all the interior walls. Now you have a structure 40’ deep
and 32’ wide.
Randy: Where do you get these
Leslie: We have agreements
with two of the three firms in the world who manufacture them. There are
700,000 shipping containers laying idle, plugging up our ports and landfills.
EVERY day 23,000 more shipping containers arrive in the U.S. Because of the trade
imbalance, the majority of them stay here. They are used once or twice, then
they just sit around.
Randy: How much will these
condo units go for?
Leslie: They will be
competitive with the new construction in the area. However, what differentiates
us from any other construction — and what we’re most proud of — is the
energy-efficiency aspect. It won’t cost that much to heat these units or plug
anything in. The occupants are going to be very happy.
We believe we can truly
create a shift in how construction is done. When we were rehabbing houses, in
the winter, some of our tenants had to make a choice as to whether to pay the
rent, their heating bill, or feed their family. Nobody should have to go
through that. We all have the capacity to live where we are not being gouged.
We truly want to make a shift, and we can do this with a product that has
already been built, used, and discarded.
Randy: I think about all
those naysayers who laughed at you at the beginning of your project and how it
is you and your company who are now having the last laugh.
Leslie: Absolutely! You hit
the nail on the head. I am glad the universe forced us to step back and
strategize, even though it was frustrating. We now have letters of intent to
build about $210 million dollars’ worth of projects around the country. In
addition, we are in conversations concerning another $600 million dollars’
worth of projects around the United States, and internationally as well. As we
attract more business, we realize that we will not be able to fill every
request. So, if we can create the technology and allow others to use that
technology, we will license it.
Randy: What obstacles do you
Leslie: HUD needs to perform
complete inspections on the type of housing we’re doing in order for our
housing to be HUD-approved. This will be one of the processes we have to go
through, and it’s all going to be about education. As we build, we are creating
the history, statistics, procedures, systems, guidelines, and codes, so it will
be easier for the next person to build.
Randy: You are truly United
States pioneers of multi-family dwellings made out of shipping containers.
Leslie: Yes, we are the
United States pioneers. There are a couple of companies doing good work with
shipping container construction, supplying single-unit housing for the soldiers
in Afghanistan and single-family homes. But nobody is addressing multi-family
or commercial buildings.
No one knows how to do this
because it’s not been done before. When they’re stacked 6 high, 18 feet wide,
and you stack them in different configurations like LegosTM
and start cutting out the interior walls, you have to know what the load
factors are, and you need to make sure you are not losing any of the structural
integrity. Those are the systems, configurations and codes we are creating
today. So, when you say we are pioneers in this, you’d better believe it.
Randy: How long will it take
to build a 20-unit condo building?
Leslie: If you framed a
20-unit condo project using regular lumber and labor, it would take about 90
days. We’ll have our building framed in less than 7 days. We anticipate this
complex to be complete in less than 6 months, whereas, a traditionally-built
project would take 12-18 months. This saves both. Europe, Travel Lodge
completed their third hotel out of shipping containers in 2011, and they’ve
vowed to build all future hotels out of shipping containers because they are
able to get into revenue quicker.
Randy: What would you say to
anyone in pursuit of their dreams?
Leslie: Here’s a good litmus
test if you think you want to give up… In the beginning of 2012, every day, at
least ten times a day, I was thinking about quitting and giving up. My litmus
test was this: I would pretend I was on my deathbed and was being asked the
question, “Do you have any regrets in life?” Every time I asked myself that
question, my answer was, “Yes, I would have had a regret.”
So, even though I felt like
quitting when all the investors were turning us down, after a while I put my
big girl panties on and started talking to them. I matter-of-factly asked them
why they didn’t want to invest in my company. I wanted to know the key factors
were as to why they wouldn’t fund us. It was a very brave step to take. They
told me that they liked the concept but that I needed to have the right team in
place to make it hap-pen. The moment I started listening to what these
investors were saying, things shifted.
We realized that we needed to
bring in people who were way more experienced then we were. Then all the right
people started showing up to put our company together — from our mechanical
designers who are creating our patents, to our intellectual property lawyers,
to our CFO, marketing team, and more. We also brought in more strategic
partners and different technologies.
The investors were spot on.
We’ve now put together Three Squared Inc. TM so we can consistently move
forward and stay solid in the future. As a result, all of these projects are
being put into our pipeline.
Randy: Final thoughts?
Leslie: I’m truly committed
to the success of this company and the technology our team is creating. It’s
not about me or about Three-Squared TM; it’s about shifting how we can make
things different. As Margaret Mead said, “Never doubt that a small group of
thoughtful, committed citizens can change the world, because, indeed, it’s the
only thing that ever has.”
For more information about
shipping-container dwellings, visit www.ThreeSquaredInc.com
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She is the author of The Power of Miracle Thinking.