What’s Driving Data Center Construction Right Now

I wanted to share a key trend that’s emerging in commercial real estate heading into 2026: builders are increasingly focusing on data center projects as broader CRE construction cools off.

According to recent industry reporting, traditional commercial construction, such as offices, hotels, warehouses, and multifamily buildings, is slowing due to high interest rates, material costs, and labor constraints. In contrast, data center construction is one of the few segments still growing, with spending expected to jump significantly this year as tech companies and hyperscalers invest in AI-ready infrastructure.

Here are some key things happening in the market: 

• Data centers are outpacing most CRE sectors even as total nonresidential construction stalls in real terms.

• Projects often exceed $1 billion in cost and require deep technical expertise. This has increased demand for specialized labor.

• However, labor shortages and rising tariffs could begin to challenge the pace of these builds.

For developers and investors, this shift underscores where real growth and resiliency are currently concentrated: infrastructure that supports digital services and AI workloads.

Happy to discuss this more or connect you with relevant data and market insights.