By zeroing in on key growth sectors— science and technology, health care and energy/utilities projects specific to campus infrastructure—Affiliated Engineers Inc. (AEI) has strategically increased its regional market share. The firm reported 46% revenue growth in the Southwest last year—35% in Colorado, Wyoming and the Intermountain states—by means of leveraging data and technology on several high-profile projects. Advanced manufacturing has also become an important market for AEI, and much of the additional revenue came from clients in this market that have been driving overall growth in Phoenix.

AEI is approaching 1,000 employees in 21 offices across the country: 55 are in Phoenix and Tucson. It is ranked No. 48 on ENR’s list of design firms in the Mountain States and Southwest with $20.58 million in revenue reported for 2024, up from $15.24 million in 2023.

ENR editor Jennifer Seward sat down with Steve Yanke, AEI principal, to discuss the firm’s Southwest presence. The following Q&A has been edited and condensed.

Where are you seeing the most change in the Southwest?

When I moved to Arizona in 2002, we had hospitality, residential, health care and some corporate work. Our first significant project was the new emergency department at Banner Baywood Medical Center. It was about 40,000 square feet … and it felt like, gee, now we’ve made it. Over the last couple of years, with TSMC entering the market, Intel continuing to grow along with Lucid and LG Battery, advanced manufacturing and even mission critical are really where there’s tremendous growth. I think health care will always be ‘build it and they will come,’ but [this is also true] for advanced manufacturing; it’s a new market and it’s growing quickly. We’re well-positioned to be part of those projects because of our science and technology background. They require large clean rooms and attention to temperature and humidity. They require big power. And they require not just plumbing from a piping standpoint but pipe gases and processed gases, and we’ve got process engineering in-house. As we’ve started to become more involved in those at a larger scale, we’ve been very successful with them.

What new technologies are you implementing?

“We’re as busy as we’ve ever been, but maybe with a little bit different mix of projects.”

—Steve Yanke, Principal, AEI

A big part of what the firm has been engaged in, especially in California and Phoenix, has been supporting decarbonization studies—eliminating fossil fuels. As part of that, we’re looking at microgrids, we’re looking at how to support the campus infrastructure without burning fuel. There are software packages, XENDEE is one of them, that allow us to do some quick evaluations of different combinations of energy sources. We use Power BI quite a bit internally, and it helps as a visualization tool to show our clients how to build the project, both from an energy and a cost standpoint, and how it might be phased. Everybody is talking about artificial intelligence, and certainly we’re figuring out how that fits into our future. What are the rules for using it, and how do we get the most out of our data without opening up all of that data to the rest of the world?

How is your economic outlook?

Cautiously optimistic. We’re as busy as we’ve ever been, but maybe with a little bit different mix of projects. We’re paying attention to what’s happening with NIH grants and funding. Some of our higher education research was really dependent on those. And while we haven’t seen much of our projects come to a screeching halt, we’ve seen some others slow down or come to a halt or maybe never even get off the ground. It’s good that we’re entrenched in multiple markets as it provides some resiliency. In Arizona and even in New Mexico, we’re seeing a lot of inpatient care, and even if it’s not new buildings, there’s always a need to do improvements. And a lot of them built in the ’70s are reaching their limit of effective space planning and equipment utilization.

Valleywise Health Medical Center in Phoenix is expanding the safety net for Arizona’s underserved population.
Photo by Samuel Forrest Photography

What makes AEI different in today’s market?

We’ve seen a lot of consolidation of firms from venture capital—that’s not us. Our 51 shareholders provide the overall direction, and our commitment is to our clients.