Data Centers Overtake Offices In US Construction-Spending Shift (bloomberg.com)
- Reference: 0181005930
- News link: https://news.slashdot.org/story/26/03/16/1548242/data-centers-overtake-offices-in-us-construction-spending-shift
- Source link: https://www.bloomberg.com/news/articles/2026-03-16/data-centers-overtake-offices-in-us-construction-spending-shift
> Spending on data center projects in the U.S. has exploded, [1]surpassing offices for the first time at the end of last year . It's a trend Matt Kunz saw early on when Meta built a computing hub outside Columbus, Ohio. Other tech companies soon swarmed into the area, drawn by its stable economy, university talent pipeline and ample power, water and land, said Kunz, vice president and general manager at Turner Construction Co., the firm that led Meta's build-out. Since Meta broke ground in 2017, it's expanded its data center campus, and Amazon.com Inc., Alphabet Inc.'s Google and Microsoft Corp. made plans to join it nearby.
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> "When one shows up, almost all the other ones tend to follow," Kunz said. For Turner, a construction giant responsible for supertall office skyscrapers, sports stadiums and cultural venues around the globe, data centers are commanding more of its bandwidth. The company completed $9.4 billion of the projects last year, more than five times its 2020 total. Last month, Turner announced it was [2]chosen as one of the contractors on a $10 billion data center for Meta in Indiana. Tech companies' needs for AI processing facilities have made data centers the latest darling of the real estate industry. The properties are figuring heavily into portfolios of major investors such as Blackstone, Brookfield Asset Management and KKR, on a bet that long-term demand for computing power will continue to grow. At the same time, office development has slowed as cities across the U.S. contend with vacancies that have piled up since the Covid lockdowns.
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> Construction spending for data centers has climbed steadily in recent years, while outlays for general office projects headed downward, U.S. Census data show. The two crossed paths in December, with roughly $3.57 billion spent on data centers that month, compared with $3.49 billion for offices, according to preliminary estimates. The shift is likely to continue and "may perpetuate itself even further as AI is utilized for automating day-to-day jobs," said Andy Cvengros, co-lead of U.S. data center markets for the brokerage Jones Lang LaSalle Inc. "It's going to directly impact the amount of office space people need."
According to Christopher McFadden, senior vice president at Turner, more than a third of the company's backlog is now tied to data centers.
"We're going to be building these at this scale for years to come," McFadden said. "There's a lot of wind in the sail."
[1] https://www.bloomberg.com/news/articles/2026-03-16/data-centers-overtake-offices-in-us-construction-spending-shift
[2] https://www.turnerconstruction.com/insights/turner-selected-as-one-of-the-contractors-for-10-billion-meta-data-center-campus-in-indiana
Not surprised really (Score:4, Insightful)
Is this at all surprising when there's a lot of empty office space in many large cities? Unless a business is looking to build somewhere new, there's very little reason to put up a new office building when there's a lot of available space at the moment.
Re: (Score:2)
Especially given these CEO's wet dream is to replace all of their human employees with AI workers anyway...
Re: Not surprised really (Score:2)
AI probably isn't the cause, but rather telework. While staid orgs resist, nimbler firms found they can pay about $5k below market wage if they accept partial telework.
Re: (Score:2)
Even reusing existing office space generally results in construction. Every one I've been a part of tears down every bit of drywall and most non-load bearing walls.
Of course, the price associated with that is way lower than building from scratch, and the requirements are less stringent than datacenter space.
Re: (Score:2)
THIS!
Been in the Capital Expenditure Management business for a while Iv'e watched the Southern California office market completely retract and try to reinvent itself into usually residential with little success. I can only imagine all the brokers baiting property owners with data centers, not realizing the practicality of upgrading power, water and fire life safety to data center requirements is impossible for anything less than $300/SF
Maybe WeWork can shift direction (Score:2)
If the office space market has slowed, maybe WeWork can start providing co-hosting data centers.
We're going to be building these... (Score:3)
> We're going to be building these at this scale for years to come
LOL.
Prophetic much?
When this one pops, it's going to be biblical.
Re: (Score:2)
>> We're going to be building these at this scale for years to come
> LOL.
> Prophetic much?
> When this one pops, it's going to be biblical.
Indeed. Reminds me of a time when pets.com thought they were going to be selling until the next Ark came a'Geddon along..
On the bright side (Score:2)
New office space is at least one thing we need less of than new data centers.
Humans Out, AI In (Score:2)
AKA workplaces for AI are replacing workplaces for humans.
Re: (Score:2)
Seems logical: since AI is replacing humans in jobs, AI might as well replace humans in workplaces
Re: (Score:2)
> "We're going to be building these at this scale for years to come," McFadden said. "There's a lot of wind in the sail."
> "My plan is to live forever," said Steven Wright. "So far, so good."
Wind is th sail is great, until you hit the Horse Latitudes and are becalmed.
Re: (Score:2)
You are mentally ill. Seek better treatment.
Re: Exept we are all the ones going to be becalmed (Score:2)
Nut.
Re: (Score:2)
We have ghost towns courtesy the bulk of their population leaving them. What will we call these places once the server farms either don't materialize, or maybe go off after a while b'cos the public won't be willing to foot the bill for 24/7/365 electricity running that doesn't benefit them !?!
Re: Bubble? What's that? (Score:2)
Double Bubble, toil and trouble, bet wrong and your portfolio is newt-dwelling rubble.
Re: (Score:2)
Beautifully done!