Interdisciplinary/STEM and Research Facility Investment Remains Robust

University research spending is expected to continue steady growth in biotechnology, artificial intelligence, and renewable energy with annual growth rates projected in excess of 5%. Quantum Research facility construction is on the rise as a critical frontier in science and technology with universities, private industry and governments investing heavily. Major tech companies like Microsoft, Google, IBM are pursuing shared construction projects for research labs and computing infrastructure. Global competition is fierce, with China and Europe investing heavily. Interdisciplinary research hubs, innovation districts and regional research hub developments will continue to surface in the next 5 years.

Artificial Intelligence, Issues and Adoption

As was reported in previous editions, AI is here and evolving rapidly, offering numerous potential benefits including enhanced learning experiences. AI tools offer the promise of great advancements in personalized learning for students, analyzing student performance in real-time and developing individualized learning paths, allowing more efficient learning pacing, and higher engagement. The impacts on pedagogy aren’t going unnoticed, and although AI can improve personalized learning, universities are questioning whether it will result in over-reliance on technology reducing the human element of education. Within the university, the use of AI as an administrative tool to streamline operations to automate tasks like student recruitment, enrollment, grading, and scheduling is at the forefront. Job displacement associated with new tool use is an obvious topic of conversation, as AI will make certain jobs redundant. Conversely, it will create new roles that require different skill sets creating new opportunities. On the research side, the use of machine learning capabilities for ultra-large data set manipulation and analysis tasks, particularly in genomics, social science, and engineering will grow exponentially and will also drive collaboration across differing fields increasing interdisciplinary research activities and results.

Student Housing, P3’s and the Student Experience

Despite the rapid evolution of hybrid and remote learning options that have emerged post-pandemic, student engagement and experience remain market drivers. Student housing project needs continue, with an estimated 20.5M enrollments by 2027, housing gaps still exist driving new construction projects. For tuition revenue-dependent institutions, competition to attract and retain both faculty and new student populations remains fierce. Student engagement and experience is key, and the arms race for attractive living, learning, and engagement venues is on the rise as is the pursuit of creative mechanisms to fund and deliver new projects. Interest in P3 deliveries continues for not only student housing, but also in energy / utility infrastructure and mixed-use developments. FMI is reporting 7% increase in power projects in ‘24 from ‘23 and stable through 2028. “Deal Complexity” is still very much an issue, and although pockets of institutions are successfully implementing the methods, broader use of the vehicle type and failure to achieve financial closing remains a problem and several projects have been converted to traditional procurement solutions.

Athletics

Construction spending for athletic facilities is expected to continue to grow steadily through 2029 with increased investments in student-athlete recruitment, enhanced campus amenities and upgrades to aging sports infrastructure. Ongoing renovation and modernization will account for a significant portion of spending with Stadium upgrades, training facility updates and sustainability projects dominating as focus points. In Particular, Division 1 spending in state-of-the-art facilities to attract top athletes, specifically for football and basketball programs that generate significant revenue is a continuing trend. Expansion of multipurpose athletic complexes is also on the rise for institutions supporting broader Title IX gender equality initiatives, and increased spending on facilities for soccer, tennis, and track and field.