Traditional project delivery methods like design-bid-build frequently encounter cost overruns due to changes unknown to the owner. Change orders are among the most common challenges in multi-family projects, typically accounting for up to 10% of additional project costs due to scope alterations and misaligned expectations. These surprises often stem from design gaps, late-stage value engineering, or conflicting interpretations between project stakeholders. Without proactive management from the start, they can quickly derail timelines and strain budgets.

With the design-build approach, these risks were minimized as designers and construction experts worked collaboratively from day one. This meant fewer Requests for Information (RFIs), as potential challenges could be addressed and solved early in the design phase. In the design-bid-build project, however, the separation between design and construction left the door open to mid-project modifications and selection decisions creating budget surprises for the developer.

Effective communication is key to any successful project, yet design-bid-build often places the burden of coordination on the project owner. With separate entities managing design and construction, owners must navigate between the two teams, sometimes stepping in to resolve issues and ensure expectations, adding time and requiring more involvement than anticipated.

For the design-build project, the team’s early involvement ensured that the owner’s vision was clearly understood and integrated from the start. This single-point-of-contact structure reduced the owner’s role as an intermediary, allowing the project to progress smoothly and with less direct oversight. The design-bid-build project, by comparison, required more hands-on management from the owner, adding complexity and increasing the chances of miscommunication between design and construction teams.

As illustrated by the design-build project, this delivery method offers multi-family developers a more modern, streamlined approach that accelerates timelines, mitigates risks and simplifies communication. In today’s competitive market, choosing an experienced design-build team, such as ARCO Construction, can make a critical difference in your project’s success.

With years of multi-family expertise, ARCO has refined a process that not only brings projects to market faster but also safeguards against issues and reduces the burden on owners. For developers ready to move beyond traditional methods, ARCO’s design-build model offers a proven path to more efficient, cost-effective, and profitable multi-family projects.

With 75% repeat customers, we’ve delivered design-build projects nationwide for more than 30 years — producing faster, better, and more cost-effective results. Click on each project to learn more.

Contact us to learn how ARCO can deliver faster, more cost-effective results tailored to your goals. Let’s connect.

Beginning with early collaboration, the design-build partner helps navigate these phases:

Design-build streamlines early project planning by aligning your vision with cost and schedule expectations from the start. With a single team evaluating site conditions, zoning and code requirements, you can make confident decisions before committing significant resources.

In design-build, the design phase is collaborative and budget-conscious. Architects, engineers and builders work together to develop plans that meet performance goals and constructability to reduce unwanted surprises in the construction phase.

With design and construction teams integrated from day one, the transition to construction is seamless. This integration reduces changes during the course of construction, compresses timelines and fosters problem-solving throughout the build, helping projects stay on track.

Design-build is key to ensuring smoother project closeout. After construction is complete and through building turnover, the design-build partner handles final inspections, assists with move-in coordination and manages owner warranty. This continuity helps ensure the space operates as intended and gives owners a clear path to resolve any lingering issues or concerns.

The earlier a design-build team is involved, the more value they can provide. During site selection or early planning stages, the team can assess project opportunities and implications to help you avoid costly surprises.

Early engagement also allows for more meaningful collaboration during design development to set the tone for a smoother construction process.

In design-build delivery, clients are able to maintain operational continuity from start to finish. Design-build’s single-source solution model minimizes disruptions by streamlining project communications and maintaining a single point of accountability.

With the same team managing the project from preconstruction through turnover, you’re free to focus on your business.

Common challenges include:

Design-build minimizes these risks by uniting all disciplines from the start. With a single point of contact, clients experience fewer handoffs, faster resolutions and greater visibility into project progress.

Selecting a design-build partner is not a one-size-fits-all approach, and it’s important to seek out an experienced general contractor that is detail-oriented and able to support your business needs.

Considering these key factors when engaging a design-build partner can lighten your load and position your project for success:

ARCO Construction’s approach to design-build combines quality of design and construction. Our team seamlessly manages budgets and schedules to foster a partnership between team members at all levels, which accelerates delivery, streamlines communication and mitigates risk for the client.

ARCO’s internal collaborative culture unites design and field experts. Our Project Managers and Superintendents are well equipped to deliver the best client experience.

Our team is dedicated to understanding your vision and optimizing your investment. Early collaboration with ARCO identifies both your project’s opportunities and implications, ensuring your project is set up for success.

Engineers by trade, ARCO Project Managers are skilled in overcoming design challenges to deliver tailored solutions.

Design-build is key to ensuring smoother project closeout. After construction is complete and through building turnover, the design-build partner handles final inspections, assists with move-in coordination and manages owner warranty. This continuity helps ensure the space operates as intended and gives owners a clear path to resolve any lingering issues or concerns.

With 75% repeat customers, we’ve delivered design-build projects nationwide for more than 30 years — producing faster, better, and more cost-effective results. Click on each project to learn more.

The design-build difference made a positive impact in the construction of the Citrine Apartments in Lake St. Louis, MO alongside ARCO repeat client Mills Properties:

When every day counts and every dollar matters, clients need a partner who can navigate the construction process and execute your vision with certainty. Design-build isn’t just a collaborative effort, it’s a delivery method that integrates design, engineering and construction into one seamless process. This approach prioritizes schedule, cost certainty and a fully integrated construction experience.

Contact us to learn how ARCO can deliver faster, more cost-effective results tailored to your goals. Let’s connect.

The design-build approach combines management of expense risk and guidance of schedule through a single point of responsibility. Including this method in your preconstruction efforts provides the advantage of streamlined communication and accountability, resulting in reduced cost exposure, accelerated timelines and early assessment of design and construction budgets.

“The planning, analyzing and establishing of the scope of work, coupled with design services and streamlined communication helped us know exactly what to expect with our projects,” said Eric Murray of Providence Group.

StoryPoint Group’s Dave Baylis noted the efficiency of the design-build process provides them the ability to “adjust for potential budget fluctuations in material, labor, loan interest rates or expected operational inflation,” which may otherwise be difficult to navigate. Baylis added, “Adaptability is key in anticipating customers’ needs. ARCO’s customer-centric approach to design-build allows StoryPoint Group to accomplish this needed flexibility.”

Due diligence is essential for minimizing risks, optimizing project finances and delivering a successful development that meets quality standards, budgetary constraints and timeline expectations. But completing this essential phase can prove difficult if done without a trusted partner.

Thomas Jurbala of Generations Healthcare said the knowledge and experience ARCO brings to their projects’ due diligence is invaluable. “In addition to knowing what has or has not worked in the past, having their finger on the pulse in regard to the submarket, labor and cost implications of certain designs has been key to launching successful projects.”

Engaging with a design-build partner during due diligence can expose those heavy-hitting implications early and ensure expectations are met with little upfront investment, ultimately getting you operational faster.

With the evolving demand in senior housing, expanding your market share through increased reach and rapid entry is essential to success. Working with a nationally-established partner will allow you to tap into larger markets, providing expansion potential and accelerated preconstruction schedules, while reducing exposure to regional market fluctuations or other localized challenges.

“As a regional player, StoryPoint Group often enters new states that carry an entirely new set of regulations, general practices, subcontractors and suppliers,” said Baylis. “Working with a design-build partner with a national breadth of experience in various construction types and market sizes gives us the confidence we need to expand, without missing a beat or looking over our shoulder.”

If repeatability is a factor in your business, you’ll also want to consider how the design-build delivery makes replicating building and operational layouts faster and more efficient when evaluating site constraints in varying nationwide markets.

Jim Eisenhart of Aligned Equity Group said for him, rapid market entry is essential in this competitive climate. “Speed to market is one of the biggest advantages you can have as a senior housing developer. ARCO removes many of the risks associated with moving quickly towards the finish line.”

From new builds to expansions, conversions to renovations, ARCO is suited for even your most complex senior living projects. Our team is prepared to help you manage risks, accelerate due diligence schedules, increase market share and make the most of this dynamic market so you’re well positioned for whatever lies ahead. Connect with our team today.

In markets with high vacancy rates, TIs can help owners and developers remain competitive by modernizing existing buildings and offering flexible layouts to attract long-term tenants.

For example, ARCO’s current work on the Horizon at Skyway Commons was designed with long-term flexibility in mind, offering future tenants a functional space while focusing on The Valley’s current industrial needs. Once completed, the space will be positioned to maximize developer investments.

When clients look to update their current facilities, keeping operations running smoothly is a top priority. ARCO works closely with stakeholders to minimize disruption and ensure a seamless transition, demonstrated by our work with Live Nation Entertainment and Parkside Bank in St. Louis.

ARCO partnered with Live Nation Entertainment to renovate St Louis’ Hollywood Casino Amphitheater. Amidst the increasingly busy concert season, various portions of the facility were updated to reflect the venue’s brand identity and upgraded to improve concertgoers’ experience. Throughout the project, Live Nation was able to maintain preparations for the upcoming concert season.

In an urban office setting, our team coordinated closely with Parkside Bank to complete office space upgrades including high-end finishes, architectural lighting packages and new audio and visual components. With our team’s phased construction approach, Parkside Bank was able to remain fully operational from start to finish, with minimal disruption to fellow building tenants.

Time is often a critical factor when clients need to scale. Compared to ground-up builds, TIs commonly offer a faster path to occupancy, allowing companies to expand quickly and cost-effectively.

As Crown Equipment prepared for its expansion to Oklahoma City, they opted to tailor an existing industrial space that would accommodate their technical operations, manufacturing and logistics, rather than completing a ground-up build. As a result, Crown Equipment began serving the greater Oklahoma City area within 4 months of project kickoff, compared to following an extended ground-up construction timeline.

Our design-build delivery model facilitates a streamlined approach to TI work. From day one, we collaborate with clients to develop thoughtful and budget-conscious designs that meet tenant needs and maximize developer investments.

With a combination of national resources and local expertise, no project is too small or niche for our team. ARCO Project Managers are dedicated to understanding our clients’ businesses and delivering tailored solutions to meet their needs. From project launch to completion, our Project Managers serve as the client’s sole point of contact to ensure clear communication and accountability.

With experience across a wide range of industries, ARCO brings the same high standards to every TI project as we do to our ground-up builds.

Whether you’re investing in a flexible space for future tenants or renovating a space to meet your own evolving needs, ARCO is ready to help. Connect with our team today.

Over the last two years, the Phoenix industrial market experienced notable shifts, defined by a steady decline in construction activity, rising vacancy rates and consistent yet insufficient absorption to offset new supply. These trends suggest an impending rebalancing of the market. As construction slows and absorption remains steady, a predictable shift is approaching, with vacancies likely to peak then begin their decline. For developers, preparing to act ahead of this curve will be critical to success in 2025 and beyond.

The following information highlights key market trends, data insights and the implications for developers in the Phoenix industrial market. By examining construction activity, vacancy rates and absorption patterns, this report provides a clear understanding of the challenges and opportunities ahead. Equipped with these insights and the support of a trusted partner, developers can make informed decisions and strategically position themselves to act.

Market behavior in 2026 reflects a clear preference for flexibility and controlled risk. Phased expansions are increasingly replacing single large development commitments, allowing owners to deploy capital in stages while matching capacity to demand. Automation and process-driven layouts are also becoming standard, which increases the importance of early equipment coordination and drives more complex MEP and life safety requirements. Owners are also demanding faster startup timelines, which changes how teams plan sequencing, procurement, commissioning, and turnover.

Construction activity in Phoenix displayed a steady, linear decline. This suggests a strategic response by developers to rising vacancies (as noted below) and the broader economic landscape. This trend, coupled with data on new construction starts, highlights a level of market predictability, indicating that construction activity will continue to slow until vacancy rates start to stabilize.

Vacancy rates in Phoenix climbed significantly in 2024, yet net absorption remained stable quarter-over-quarter. This stability indicates that despite elevated vacancies, the demand for high-quality, move-in-ready spaces remains, particularly in submarkets less impacted by oversupply.

New supply trends, which typically lag behind construction activity, also reflected a decline in 2024. Notably, nearly 33% of Q4 deliveries were pre-leased, highlighting the continued demand for tenant-improved spaces. For developers, focusing on ready-to-occupy properties with high-quality finishes will be critical in attracting leases quickly.

The predictable trends defined above provide developers with a unique opportunity to plan strategically. Developers who prepare now by focusing on tenant-improved, move-in-ready spaces will gain a competitive advantage as the market rebalances.

As market preferences evolve, the focus is expected to shift away from large-scale projects and toward smaller, demisable spaces that offer greater flexibility for tenants. This trend reflects the growing demand for adaptable spaces that can accommodate a variety of uses, from last-mile distribution to light manufacturing.

Developers who incorporate these elements will not only appeal to a broader range of tenants but also position themselves to respond quickly to changing market needs if necessary. Emphasizing customizable layouts built on strategically located sites can further enhance the appeal of these smaller, versatile spaces, making them an attractive option for both regional and national tenants looking for efficiency and scalability.

Although elevated vacancies present challenges, the predictability of market trends points to a cautiously optimistic outlook for 2025. Developers who act now, prioritizing tenant-ready spaces, will be better positioned to capitalize on the approaching inflection point in vacancy rates.

Starting the planning process now allows developers to get ahead of the competition and take advantage of competitive subcontractor pricing.  By driving preliminary design and pre-construction services during the due diligence period at no cost, ARCO minimizes developers’ risk without the financial burden of traditional contractors. This service provides developers with valuable insights and planning support early in the process, helping them make informed decisions without financial commitments.

Engaging with a trusted partner like ARCO early helps developers navigate the shifting market, align developments with tenant demands and streamline project timelines. Scheduling a consultation with our team is the first step toward optimizing your next industrial project. If you’re a developer looking to set yourself up for success in 2025, partnering with ARCO Phoenix can help you minimize risks and position your developments strategically for the future.

To start the conversation, please email Vice President of Phoenix Operations, BJ Keane, at bjkeane@arco1.com, or call 602.805.9082.

The information provided is based on data from the  2024 Quarterly Arizona Industrial Market Reports. All market performance statistics and trends referenced are derived from this report unless otherwise noted.