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FoxGal Buys a Katerra Manufacturing Plant in Arizona

Updated: Nov 20, 2019

Google Earth image showing the facility in Glendale, AZ, sold by Katerra to Foworth-Galbraith

Foxworth-Galbraith Lumber Co. (FoxGal) has purchased a manufacturing plant from Katerra based in the Phoenix suburb of Glendale, AZ, the two companies confirmed.

The 27-acre property at 8205 N. 67th Ave. in Glendale differs from a better-known facility in the Phoenix market that has been the location for many of Katerra's publicity photos. this operation primarily was used for roof trusses, a Katerra spokesperson said Nov. 11.

Neither Katerra nor FoxGal has publicized the deal for the Glendale property, though FoxGal has added it to its locations directory. In fact, in responding Nov. 10 to a Webb Analytics inquiry, FoxGal deferred to Katerra, and Katerra would only say at the time: "Foxworth-Galbraith Lumber Company has acquired Katerra's Glendale factory, a small facility we (Katerra) purchased in 2018." The deal took place in September, the Katerra spokesperson said the next day.

The deal probably will add to speculation about the future of Katerra, a multi-billion-dollar Silicon Valley startup that aims to revolutionize the construction industry but has taken on criticism for what some building insiders regard as a haphazard operational style and a recklessly expansive business plan. Defenders say some of those critiques fail to take into account Katerra's different operating style fostered by CEO and founder Michael Marks, the former head of the tech giant Flextronics and for one year the president of Tesla.

"Growth and disruption is nothing new to him," Craig Curtis, Katerra's chief architect, said of his leader during a presentation in Boston on Nov. 6 at the Industrialized Wood-Based Construction Conference. A New York real estate website called The Real Deal quoted Marks on Nov. 1 as saying Katerra plans to turn a profit sometime in 2020 and is sufficiently capitalized, meaning it doesn’t need to go public, though it may do so after 2021.

Katerra's decision to sell the Glendale facility might represent an example of what Curtis described as a company strategy: to improve construction in part by creating manufacturing facilities with robotics and modern management techniques that maximize efficiencies and thus drive down costs. Current facilities, such as the much-photographed plant in Phoenix, are "fairly simple" and small compared to what Katerra has planned. Curtis noted that the newly finished Katerra manufacturing operation in Tracy, Calif., is twice as big and features lots of robotics and self-guided vehicles.

The next factory is planned for San Marcos, Texas. Curtis said this would be followed by someplace in the Northeast. The map Curtis showed of current and planned locations put the planned East Coast factory around Fayetteville, N.C., but the Katerra spokesperson said no site in the East had been announced yet.

The Glendale operation has 150,000 square feet of manufacturing and storage space plus 7,800 square feet of offices. Google Earth maps show the facility once as belonging to ZyTech Systems, a Canada-based manufacturer of building components. A ZyTech spokesperson said the company sold its building component business operating out of the facility to Katerra in January 2018 and ZyTech discontinued operations in Arizona at that time.

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