U.S. “office” construction is no longer just about cubicles and corner suites. It has split into two very different stories: a shrinking market for traditional offices and a fast‑growing, infrastructure‑heavy buildout of data centers. A new report by The Kaplan Group offers a data-driven snapshot of this transformation, highlighting rapid data center growth, as artificial intelligence and digital infrastructure surge to the fore.
Key Takeaways
- General office construction (excluding data centers) dropped from a 2019-2020 peak of near $71 billion to around $50 billion in 2025.
- Data center construction has surged from $8.5 billion in 2019 (about 11% of total office) to just over $31 billion by 2024, and was projected to reach about $39 billion in 2025.
- Texas topped all states with about $101 billion in private nonresidential construction spending for 2024.
General Office Construction Trends
Overall private office construction, including data centers, shows a clear arc: strong growth through the 2010s, a pandemic‑era peak, and then a shift in what “office” actually means.
General office spending rose steadily into 2019–2020, reaching its highest levels as employment and corporate footprints expanded. The COVID‑19 shock then changed the trajectory: top‑line office spending stayed high, but demand for new traditional workspace weakened as remote and hybrid work spread, vacancies climbed, and financing tightened.
In the mid‑2020s, total office construction still looks historically elevated in dollars, but much of that strength now comes from data centers. Traditional offices are no longer the clear driver of the category. Instead, the office line increasingly blends a softening conventional office market with a booming digital infrastructure build‑out, masking the underlying decline in demand for new, non‑data‑center office space.
Data Center Construction Trends
While traditional office construction has softened, data center construction has surged, powered by cloud computing, AI infrastructure, and the broader digitization of the economy.
Explosive Growth Trajectory
- By 2019, data center construction had reached roughly $8½ billion in annual spending. That year, data centers represented about 11% of total offices. General office spending was nearly 8 times larger than data centers.
- By the mid‑2020s, data center construction has shifted from a niche subcategory to a core growth engine of the office bucket.
- Year‑over‑year gains in data center spending are double‑digit, far outpacing both:
- Overall office spending
- And especially traditional general offices
- 2025 (YTD) – Data centers approach 50 percent share of office construction.
- Data center construction is now almost equal in scale to general office construction for the first time in the history of Census reporting.
- What was once a small line item within the office has become a co‑equal pillar of the category.
- The “office” label now hides two radically different realities:
- A structurally challenged traditional office market
- A hyper‑growth, infrastructure‑driven data center segment
Office Construction Trend Without Data Centers
When data centers are removed from the office total, the underlying trend in traditional office (general + financial) becomes clear:
- The late‑2010s upcycle culminates in 2019–2020, after which:
- Non‑data‑center office spending declines,
- Even as the topline office category stays elevated thanks to data centers.
- Over 2023–2025 YTD:
- Total office spending is roughly flat or modestly up year over year.
- But office excluding data centers is clearly down, indicating that:
- All of the net growth in “office” is coming from data centers.
- Office without data centers has fallen by double‑digit percentages year over year.
Office Construction Trends by State
Important Data Limitation
The U.S. Census Bureau does not publish state-level data specifically for office construction. State-level data is only available for total private nonresidential construction, which combines office buildings with manufacturing facilities, commercial buildings, healthcare facilities, and other nonresidential categories.
The following analysis uses total private nonresidential construction as a proxy indicator, recognizing that office construction represents a varying percentage of total nonresidential activity in each state.
Top States by Private Nonresidential Construction (2024)
| Rank | State | 2024 Spending (Billions) |
| 1 | Texas | $101.0 |
| 2 | Arizona | $34.9 |
| 3 | Florida | $34.2 |
| 4 | Georgia | $33.7 |
| 5 | California | $31.2 |
| 6 | Ohio | $30.2 |
| 7 | North Carolina | $25.7 |
| 8 | New York | $18.2 |
| 9 | Tennessee | $15.7 |
| 10 | Virginia | $15.4 |
Texas: The Dominant Market
Texas accounts for more private nonresidential construction spending than the next two states combined. At $101 billion in 2024, Texas represents approximately 20% of all U.S. private nonresidential construction activity.
The U.S. office construction market is undergoing a fundamental restructuring. Traditional general office construction has entered a prolonged decline driven by structural changes in how Americans work, while data center construction has emerged as the dominant growth category within the office construction sector.
Methodology and Data Sources
Primary Data Sources
- U.S. Census Bureau: Value of Construction Put in Place (VIP) Survey
- Monthly construction spending data (national level)
- Annual state-level private nonresidential totals
- Data available at: census.gov/construction/c30/
- Federal Reserve Economic Data (FRED): Office construction time series
- Series: TLOFCONS (Total Office Construction)
- Series: PROFCONS (Private Office Construction)
Data Notes
- General office and data center construction are subcategories of total office construction
- The Census Bureau began separately reporting data center construction in July 2024, with historical data backdated to January 2014
- State-level office-specific construction data is not published by the Census Bureau
- 2025 figures are projections based on year-to-date data through August 2025
Limitations
- State-level analysis uses total private nonresidential construction as a proxy for office construction trends
- Some historical estimates are interpolated from available data points
- Data center construction figures prior to 2022 are less precise due to reporting methodology changes
