The 36-Month Lie: Why Your Construction Project Is Bleeding You Dry

It's Monday morning. The coffee is brewing. The market is opening. And you're about to be sold on the single biggest lie in the construction industry. A lie so pervasive, so deeply embedded, that it dictates the largest financial decision of your life and it's setting you up for failure.

I’m talking about the 36-month timeline.

This metric is the ultimate vanity metric. It’s a lazy, intellectually dishonest number that developers use to placate investors, builders use to hide inefficiency, and you, the client, use to feel like you're making an informed decision.

You’re not. You’re being misled.

The 36-month timeline isn't just an inconvenience or a schedule. It’s a relic. It’s a tool from a bygone era of cheap capital and predictable processes. In the volatile, inflationary world of today, clinging to this metric is like navigating a minefield with a tourist map. It doesn't just ignore the real costs; it actively hides them from you. Every single month your project is delayed, your capital is trapped, yielding zero returns. This isn’t a blog post about five tips to speed up your project. This is an intervention. This is a fundamental reframing of how you must analyze the cost of building a building. We’re going to tear down this metric, expose the hidden taxes it conceals, and give you a new framework for making a decision that will impact your wealth and well-being for the next thirty years.

Stop asking the wrong question. It's time to dig in.

The Unseen Capital Drain: Why Your "Project" is a Liability, and How to Fix It

For decades, the gospel of construction has been a testament to patience. The common wisdom holds that good things—meaning, profitable assets—take time. The three-year timeline for a project, the 36-month odyssey from shovel-in-the-ground to ribbon-cutting, is not just accepted; it’s celebrated. It's proof of scale, a monument to a "complex" process. But let me be blunt: this is not patience. It is a slow, methodical bleed. It is the architectural equivalent of holding a dying stock and calling it a long-term investment.

The market—and make no mistake, every building project is a market of capital and time—has sold a myth. It has convinced investors that a project’s timeline is a variable to be tolerated, a risk to be hedged with a few extra months and a contingency budget. The truth is far more brutal. A 36-month timeline is not a variable. It is a direct, measurable, and entirely avoidable drain on capital. Every month, every week, every day your project sits incomplete, your money—the hard capital you raised, the debt you secured—is trapped. It is not working. It is not compounding. It is not generating a return. It is, to use the kindest possible term, fallow. To me, that is a synonym for failure.

This, of course, is a contrarian view, one that the traditional industry—wed to its antiquated processes, its siloed trades, and its adversarial relationships—is ill-equipped to understand. They speak of craftsmanship and complexity. We will speak of ROI and capital velocity. They are trading in nostalgia. We are trading in financial efficiency.

The Math of Inefficiency

To understand the scope of the problem, we must apply a dose of cold, sober mathematics. Let’s set aside the subjective arguments about quality or design for a moment. They are secondary. The primary concern is the permanent loss of capital. And in construction, this loss is not an event; it is a process.

Consider a hypothetical real estate development requiring an initial capital outlay of €10 million. The traditional timeline is 36 months, after which the asset is stabilized and begins to generate a net operating income (NOI) of €1.5 million per year. By the standard metrics, this project is a success, yielding a 15% unlevered return on cost. This is the narrative that sells, the slide deck that gets funding.

But where is the money for those three years? It’s not just sitting in a bank account. It’s been deployed, locked in the form of poured concrete, steel beams, and partial walls. It is an investment, but its return is a non-event. The clock is running, and for 36 months, the return is precisely 0%.

Now, let's introduce a competing investment: a modular construction project with the same total cost and the same stabilized NOI. The key difference is the timeline. Instead of 36 months, it takes 9 months to complete and stabilize.

The traditionalist, stuck in their paradigm, might scoff at the speed. But the investor—the one who truly understands capital—sees a different picture. For the modular project, capital is deployed and begins generating returns 27 months sooner.

This is not a small anomaly. It is a seismic shift in the financial calculus. It is a 27-month head start on compounding.

Let’s extend this simple math. Imagine you could redeploy the €10 million of capital from the first project after it stabilizes. In the traditional model, you can make one investment over three years. In the modular model, you can make four investments in the same time period. The capital is not just turning over; it is accelerating.

This is the principle of capital velocity. It’s the time it takes for your deployed dollar to return to you, bringing a friend. Traditional construction treats capital velocity as a concept to be ignored. Modular construction treats it as the core value proposition.

When I write, I often say that on the subject of building, maximizing your return means first and foremost minimizing the risk. The same holds true in development. The most significant downside is not cost overrun, which is a known and priced-in variable. The most significant downside is time overrun, which compounds the loss of opportunity, a cost that rarely appears on a balance sheet. The longer a project is delayed, the greater the permanent loss of capital that could have been earning a return elsewhere. That’s a loss that is simply harder to replace than a gained euro is to lose.

The Illusion of "Complexity"

The traditional industry defends its inefficiency by cloaking it in the language of complexity. "Each project is a unique snowflake," they say. "You can't rush craftsmanship." This is, of course, a shell game. A distraction from the reality that their business model is built on an inefficient, fragmented, and largely undocumented process.

A conventional site is not a single, coordinated machine. It is a hundred different entities—plumbers, electricians, framers, inspectors—each with their own schedule, their own incentives, and their own set of potential delays. A single rainstorm, a delayed delivery, a forgotten permit—any one of these can create a ripple effect that adds weeks, even months, to a timeline. This is not complexity; it is chaos masqueraded as a necessary process.

The modular model inverts this. It brings the construction process indoors, into a controlled environment where variables are minimized, not tolerated. It’s manufacturing, not magic. It’s assembly, not improvisation. Materials are on-site and in-stock. Labor is a fixed team. Weather is irrelevant. Quality control is a standardized process, not a final-stage inspection. This is not about sacrificing complexity; it is about de-risking it.

To put it in financial terms, traditional construction operates like a company with a high degree of operational leverage and unhedged risk. Every external variable has an outsized effect on the final outcome. The modular factory, by contrast, operates with the financial discipline of a well-run corporation. It standardizes, it refines, and it repeats.

This isn’t about building a more cost effective product. It is about building a financially superior product. One that respects the capital that backs it. One that recognizes that time is the most expensive variable of all.

The Market is Inefficient, Not You

I have no view on whether the broader real estate market will fall or rise during the coming year. The prudent view is no view. The market, broadly defined, is full of distractions—interest rate fluctuations, geopolitical events, popular opinion. The focus, always, must be on specific, undervalued, and inefficient pockets.

The traditional building process is one such pocket. It is a market that has been sold on a myth, a system that rewards mediocrity and tolerates staggering inefficiency. The capital locked in a 36-month timeline, the interest payments on a loan for a non-income-generating asset, the opportunity cost of a delayed return—these are all a form of value destruction. They are, to borrow a phrase, the “permanent loss of capital” that the market has chosen to ignore.

Those who embrace modular construction are not just building faster; they are investing smarter. They are recognizing that time is not just a constraint but a financial asset. They are choosing to accelerate capital velocity and maximize ROI. They are, in essence, buying a euro for 50 cents. And in a market full of euros selling for much more than a euro, that is the only intelligent investment strategy.

It’s an investment strategy that requires a certain intellectual courage. The vast majority of investors have accepted that volatility is risk. The vast majority of developers have accepted that time is a necessary evil. They’ve been told that a long timeline is a sign of a quality asset. They’ve been led to believe that a building is a static monument, not a dynamic financial instrument. But the world is changing. The companies that will thrive are not those who build monuments; they are those who build machines for capital.

This is not a debate about wood vs. steel, or onsite vs. offsite. This is a fundamental argument about value. A 36-month timeline represents a discount on future returns, a tax on capital, and a triumph of tradition over financial prudence. A 9-month timeline represents an accelerated ROI, a higher rate of capital turnover, and a direct response to a deeply inefficient market.

I will not pretend to have a monopoly on this truth. But I will say this: the data, the math, and the simple logic of value investing are on our side. It’s time to stop waiting for your asset to mature. It's time to start building your return.