Walmart and Alquist intend to expand into 3D-printed commercial properties

A version of this article first appeared in the CNBC Property Play newsletter with Diana Olek. Property Play covers new and evolving opportunities for the real estate investor, from individuals to venture capitalists, private equity funds, family offices, institutional investors and large public companies. subscription To receive future issues, directly to your inbox.

Walmart It partnered with construction company Alquist 3D last year to build approximately 8,000 square feet of additional space for its store in Athens, Tenn., for online order pick-up and delivery services. It is the largest commercial 3D-printed structure in the United States, and despite a rocky start, it is a major proof of concept for the commercial viability of this technology.

Alquist, based in Greeley, Colorado, has just announced that it will now print more than a dozen new Walmart buildings, as well as buildings for other commercial retailers, in what is arguably the largest commercial real estate deployment of this technology, which has been used mostly in residential construction to date.

As part of this deal, Sika, one of the world’s largest building materials companies, with a strong focus on sustainability, will supply materials to Alquist for all future 3D printed projects and licensees. This will simplify Alquist’s national pipeline, reduce material and shipping costs, and accelerate the development of a more sustainable mix for large-scale 3D printed construction — including commercial projects being rolled out with Walmart, according to Alquist.

“This collaboration positions Sika at the forefront of the next generation of construction, opening new markets and creating long-term growth opportunities,” said Noah Callantine, 3D concrete printing engineer and field service specialist at Sika.

It’s a clear turning point in the CRE build, which has been very slow to update. The new technology began to grow in the home construction market, but was much slower in commercial construction, simply because of the size of the printers needed to create larger buildings.

Alquist, which designs and builds large-scale printers, as well as develops the code and software to operate them, started out in the residential sector. It is now partnering with a large equipment rental dealer and a full-service general contractor to expand the technology commercially nationwide. Doing so helps reduce the high cost of materials, as well as labor that needs to be trained and local, according to Ahlquist.

“The way to lower prices [for] Anything is about getting volume, and as you get volume, you attract the attention of suppliers. “They see it as important that the more they produce, the more they can reduce their supply chain costs,” said Patrick Callaghan, Alquist CEO.

Callahan’s background is in defense technology, not construction, and he has positioned Alquist as a technology company. He said he is following company founder Zach Manheimer’s mandate to find ways to build residential and commercial buildings and infrastructure faster, cheaper, better and greener.

He admitted that the first project in Athens took a very long time, as they worked out the kinks in materials management and implemented the technology to print their first commercial building.

“It was a classic Silicon Valley failure,” Callahan said. “We were not part of the design process. They changed the permits. … Our general contractor met with us about a week before we started, and no one has ever done this before.”

The second project, a 5,000-square-foot Walmart pickup center in Huntsville, Alabama, took just seven days to complete.

While the projects employ far fewer workers, they require higher training than typical construction trades. Alquist collaborates with trade schools in its curriculum, introducing robotics and green materials. That was more attractive to the construction job market, which has seen a sharp decline in recent years, Callahan said.

“You’re not necessarily throwing rocks at scaffolding, but you’re using robots in a safe, clean environment,” Callahan said. “We’ve seen a lot of people who used to be traditional builders, but now they’ve stepped back.”

Icon Build, the largest residential 3D printing technology company, is getting into commercial construction. It has completed a hotel project and is now in talks with potential business partners, including building data centres. The upcoming Titan printer will be able to handle those large-scale projects.

“I think once this comes out into the world, shows what it can do, and validates the cost estimates that we do for clients, I think that will probably open a lot of people’s eyes,” said Jason Ballard, co-founder and CEO of Icon. “I think we should expect to see a lot of interest in alternative ways of building, data centers and other types of commercial things as well.”

But Ballard sees more headwinds than Callahan, especially when it comes to business. Data centers “already suck a lot of labor out of the market,” he said. He added that 3D printing for commercial buildings will have the same pressures as residential buildings to build at a lower cost and more quickly compared to traditional construction methods.

However, Ballard said that next year Icon will be manufacturing at least one of the new Titan printers every month, making it able to significantly expand the build. These presses will be able to create most types of industrial commercial buildings, although they are not ready for high-rise buildings.

“If we do what I expect we’ll be able to do next year and we show, whether on the revenue side or the cost side or the technology advancement side — I think we’ll grow over 300% next year, and we’ve already been pretty busy this year,” Ballard said. “I think the world will start to say, ‘Maybe there are real opportunities to do better, beyond the experimental scale.’”