TRG | The Bottom Line – 2/10

With more than 100 million fans expected to watch the Super Bowl this weekend between the Chiefs and Eagles , TRG’s thoughts naturally turned to…non-res construction! Super Bowl LVII will be played in Glendale, Arizona’s State Farm Stadium, completed in 2006 at an estimated cost of $455MM. The mid 2000s marked the beginning of a boom in stadium and arena construction. The value of construction on these venues rose from $2.5B in 2006 to a record $24.0B in 2020, but with declines in the past two years. That decline, however, is about to change. According to the Sports Business Journal, $28.5B of stadium/arena construction projects are set to be completed between 2024-27. The value of expected construction by 2025 is anticipated to be nearly $50B, a doubling of the 2020 peak. While the only new NFL stadiums expected to be completed in that timeframe are the Buffalo Bills and Tennessee Titans, nearly half of NFL teams are currently evaluating major renovations or new stadiums according to reports. We believe the outlook for stadium/arena coincides with the broader non-res outlook. TRG’s latest Contractor and Surety Survey highlights “mega-projects” supporting 2023 and beyond and is evidenced in recent earnings results from United Rentals and Ashtead.