A historic shift is underway in U.S. construction spending, as investment in data centers has officially surpassed office development for the first time, according to Bloomberg. The change reflects both a surge in demand for digital infrastructure and a continued slowdown in traditional office construction.
New figures from the U.S. Census Bureau show that data center construction spending reached $3.6 billion at the end of 2025, edging past office construction, which fell to $3.5 billion. The milestone highlights how rapidly priorities are shifting in the commercial real estate sector.
The decline in office construction is closely tied to long-term effects of the COVID-19 pandemic. Many companies have struggled to refill office space as remote and hybrid work remain widespread. Advances in artificial intelligence are also reshaping workforce needs, reducing reliance on large physical offices.
According to CommercialCafe, 17.6% of office space nationwide sat vacant as of February. Some cities face even steeper challenges, with Seattle reporting vacancy rates as high as 25%. Other major markets, including Bay Area cities, Austin, Detroit, and San Diego, also exceed 20%.
Recent data suggests vacancy rates are declining in many cities, but not due to a return to office work. Instead, underused buildings are being removed from inventory or converted into alternative uses, signaling a structural shift rather than a rebound.
Meanwhile, demand for data centers continues to accelerate, fueled largely by AI and cloud computing growth. In Columbus, Ohio, a hub anchored by Meta has attracted additional investment from Amazon, Google, and Microsoft.
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