News Brief

Katerra to Shut Down in U.S., Reducing Certified CLT Options

The “vertically integrated” company Katerra offered everything from FSC-certified mass timber products to prefab design and construction services, but it couldn’t stay afloat during the COVID-19 pandemic.

Katerra—a “vertically integrated” manufacturing, architecture, and construction company specializing in offsite construction—is shutting down its U.S. operations, according to reports from employees, who were alerted on June 1, 2021. Katerra was also a supplier of Forest Stewardship Council-certified mass timber components, and its shutdown will reduce options for mass timber projects in an already stressed market.

Catalyst building under construction by Katerra

The Catalyst building under construction

Photo: Katerra

The company in its email to employees reportedly blamed the COVID-19 pandemic, but it has been troubled for some time, with problems that include a Securities and Exchange Commission investigation into its accounting practices. The CEO of majority investor SoftBank in May included Katerra in a list of its “biggest failures,” according to Zachary Phillips of Construction Dive. The investor recently bailed out Katerra to help it avoid bankruptcy.

“Construction goes through violent cycles, which is why so many companies stay lean and subcontract everything they can to minimize risk,” wrote Lloyd Alter of Treehugger. “This is the opposite of Katerra’s plan.”

As part of its vertical integration scheme, the company purchased the firms Michael Green Architecture and Lord Aeck Sargent. Michael Green Architecture has stated that it had already planned for this contingency and would now “assume 100% ownership,” according to Jonathan Hilburg of the Architect’s Newspaper. Lord Aeck Sargent has also announced that it has a binding agreement that will allow it to return to being an independent design firm.

Katerra has yet to make a public statement about the shutdown.

More coverage of Katerra

Wood: What’s Good?

Transportation a Key Factor in CLT Sustainability

[Updated on June 8, 2021 to include the news about Lord Aeck Sargent's agreement.]

Published June 4, 2021

Melton, P. (2021, June 4). Katerra to Shut Down in U.S., Reducing Certified CLT Options. Retrieved from https://www.buildinggreen.com/newsbrief/katerra-shut-down-us-reducing-certified-clt-options

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