September 2025
What’s really happening in construction right now? This month, we ask ARCO/Murray to break down the trends transforming the industry.
IN THE MARKET
Construction Trends with ARCO/Murray
For a look at current construction trends and insights, we sat down with Drew Gavic, Vice President of ARCO/Murray, to understand what he’s seeing in the market today and what’s on the horizon:
What’s a surprising construction trend you’ve noticed on the ground in the last 6-12 months that doesn’t show up in national reports yet?
In today’s higher-interest-rate environment, owners are prioritizing speed to market and maximizing building SF on tricky sites over traditional cost benchmarks. Many developers are saying, “If we can open the doors three months sooner or gain an additional 10% of building SF, the project pays for itself.” That shift isn’t showing up in national cost reports, but it’s absolutely changing how we approach schedules, procurement and design decisions.
What role do you see AI and data analytics realistically playing in construction over the next three to five years - and what’s just noise?
We’re already seeing real, tangible benefits from AI and data in construction. AI has been integrated into our estimating tools to help speed up early cost models, enhanced our build out of national cost databases, helped gamify training apps to keep our teams sharp, and supported an internal pilot program where AI assistants surface lessons learned and best practices in seconds. On the operational side, AI is supporting real-time dashboards and automated system checks to give our teams live visibility into budgets, safety, and progress across jobs - that’s real value today. What feels like noise is the idea that AI will replace human expertise on-site. At the end of the day, construction success depends on relationships, context, and judgment. AI can supercharge those, but it won’t replace them.
What’s a construction-related belief or “rule of thumb” that most people in the industry take for granted - but you actually disagree with?
A lot of people still treat lowest first cost as the most important metric in decision-making. I think that mindset is outdated. The most successful owners today are the ones who look at total cost of ownership, factoring in speed to market, operational efficiency, and long-term flexibility. In many cases, shaving months off a schedule or designing a building that can adapt to future needs is far more valuable than a few percent saved on initial bids.
ARCO/Murray is a national design-build contractor, with almost 50 offices nationwide, focused on delivering turnkey solutions across industrial, commercial, and specialty markets. They bring together integrated design and construction teams to provide clients with cost certainty, speed, and a single point of accountability from concept to completion. For more information, please visit www.arcomurray.com.
ON OUR MINDS
i. Return to Office.
Despite more companies mandating a return to office, employee resistance is stalling progress. Have we reached a new equilibrium with hybrid work? Or will a full return to office regain traction if/ as the economy softens?
ii. The Build-out Accelerates.
As noted in last month’s newsletter, Big Tech’s infrastructure binge was already boosting the US economy. Now, following a $100 billion investment from Nvidia, OpenAI is laying out plans for $1 trillion of additional infrastructure.
iii. Nuclear Again.
As energy demands continue to surge from increasing AI demand, nuclear is starting to see broader acceptance as a potentially viable solution.
IN THE SETT
Lamar and Alex recently returned from the Wisconsin Real Estate Alumni Association’s 2025 Biennial Conference in Madison, WI. Beyond providing a great opportunity to reconnect with classmates and fellow alumni, the event featured outstanding panels and speakers, and was highlighted by a thought-provoking keynote from Andrew Ross Sorkin.
Sorkin drew on themes from his new book, 1929: Inside the Greatest Crash in Wall Street History—and How It Shattered a Nation, to argue that while today’s economy may appear strong, its foundations are fragile. The real risks, he warned, aren’t sitting in banks as in 2008 but have shifted to insurers, private equity, and semi-liquid retail funds that look safe - until they’re not.
“Crises always come down to two things: leverage and trust. And when trust disappears, everything unravels—gradually, then suddenly.” - Andrew Ross Sorkin
Takeaways from the keynote included:
Debt Pressure: U.S. liabilities now exceed $37T and could surpass $50T within a decade. Interest costs may soon exceed defense spending, a historic marker of declining superpowers.
Bubble Parallels: The AI/data-center boom resembles past speculative manias (radio in 1929, fiber in 1999), requiring relentless capital and faith in demand.
Policy Risks: Fed politicization, persistent tariffs, and the spread of “too big to fail” from banks to states and industries further heighten systemic fragility.
For real estate professionals, the takeaway is clear: rigorously stress-test debt, liquidity, and policy exposure before the next “sudden” moment arrives.
We remain grateful for your continued partnership and trust. Whether you're exploring new opportunities or navigating strategic decisions at the asset level, our team is here to support you every step of the way. If you’d like to take a deeper dive into any of the topics covered this month, don’t hesitate to reach out - we’re always happy to connect.
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