Page 17 - TACC 2025 Program

The PE Playbook:

Construction Rachel Shope
Content & Research Lead

Need-to-Know Trends for

Middle Market Investors

The construction industry is booming, and private equity (PE) investors are getting in on the action.

M&A activity in the space has increased by nearly 5x over the past 10 years. The industry really gained
momentum in 2021, as the world began to reopen in the wake of the pandemic.

Since then, transactions have remained well above historical levels. The North American market in
particular has taken off as population, urbanization, investment in infrastructure, and tech capabilities
have grown.

Here are the most important trends for investors considering making moves in the industrial,
institutional, residential, civil & infrastructure, mixed-use, and commercial construction markets.

Industry Overview Texas is another standout state, particularly in the
commercial sector. Dallas-Fort Worth and Houston
The overwhelming majority of companies in the are seeing more demand for projects like corporate
construction industry are independently owned, headquarters and retail centers.
offering a wealth of opportunities for private equity
(PE) investors. In New York, high-profile commercial projects are
on the rise. Office buildings, luxury retail spaces,
Currently, there are over 218,000 private and hospitality developments continue to see
companies in the space that are ripe for growth in the New York City metro area.
acquisition.
Dealmakers interested in the construction industry
Middle-market companies account for 20% of should also pay attention to the Southern states
industry share.
as economic expansion drives business migration
Geography and population growth. The South is the fastest-
growing region in the US, adding more people from
The US construction industry is booming from 2023-2024 than all other regions combined. Texas
coast to coast. and Florida saw the largest numeric increase, but

California leads in terms of number of construction Washington, D.C. saw the fastest growth rate at
companies. Commercial and mixed-use 2.2%. Office complexes, retail spaces, and mixed-
construction projects in metropolitan hubs like Los use commercial projects are currently dominating
Angeles and San Francisco are on the rise as their the region. The area’s lower costs compared to
populations grow. regions like the Northeast or California offer an
additional benefit to investors.