The U.S. data center construction market is booming, with spending projected to grow from $48.18 billion in 2024 to $112.33 billion by 2030. Colocation facilities, which accounted for 55.9% of 2024's revenue, are driving this growth. Contractors who specialize in colocation construction are uniquely positioned to capitalize on this trend.
Key insights from the article:
For contractors, expertise in medium-voltage switchgear, redundant cooling, and commissioning processes is critical. With 92% of capacity under construction already precommitted, understanding the evolving needs of colocation projects is essential to staying competitive.
U.S. Data Center Construction Market Growth and Key Statistics 2024-2030
Northern Virginia (Ashburn) continues to dominate as the world's largest data center hub, boasting 663 operational facilities and an additional 595 planned by early 2026. This region offers access to over 150 networks, making it a key player in the industry. Equinix has further strengthened its footprint here with its 190,000-square-foot DC16 facility in Ashburn.
Texas stands out with 405 operational facilities and 442 more in the pipeline. Digital Realty's 69-acre "Digital Dallas" connected campus serves over 140 providers and 240 customers, highlighting its significance in the state. Texas also houses the IREN facility in Childress, the largest data center in the U.S., with a capacity of 750 megawatts. In May 2025, QTS Data Centers began work on the $650 million QTS DFW2 DC2 project in Dallas County. This 470,000-square-foot, two-story facility is set to be completed by June 2026.
Georgia (Atlanta) is quickly becoming a major growth market. The region anticipates a 176% rise in data centers, with 285 new facilities planned to complement its current 162. Microsoft announced a $1.8 billion investment in November 2024 to expand its Atlanta infrastructure, which includes three advanced data centers with a combined power demand of 324 MW.
Pennsylvania is on track for a 188% increase in data centers, with 184 new facilities planned to join the existing 98. A $1.7 billion data center project was announced in April 2026 for South Annville Township, Lebanon County, further cementing the state’s growth trajectory.
Arizona (Phoenix) is another standout, with 157 operational facilities and a projected 554% capacity growth. Over the next decade, data center developments in the state are expected to generate $2.6 billion in tax revenue, presenting a lucrative opportunity for contractors.
These regional developments highlight the importance of localized factors such as power availability and tax incentives in shaping market trends. This includes how construction teams prepare for DOE data center projects involving energy and land use.
Access to power plays a critical role in site selection and overall efficiency for colocation projects. Cities like Las Vegas/Reno and Salt Lake City are particularly attractive due to their lower electricity rates and potential for capacity growth. Las Vegas/Reno, for example, offers electricity rates that are approximately 35% lower than the national average and is projected to see a 953% increase in data center power capacity. Similarly, Salt Lake City anticipates a 699% growth, driven by favorable tax incentives and affordable real estate.
"The question buyers asked in 2022 was 'do you have space?' The question in 2026 is 'can you deliver power, and when?'" - Inflect
Columbus, Ohio is also gaining traction, thanks to grid expansion initiatives by AEP Ohio, which have been bolstered by Intel's semiconductor investments. Across the U.S., data centers are expected to contribute nearly $27 billion in tax revenue over the next decade, with Virginia alone accounting for $4.2 billion of that total.
The table below provides a snapshot of how these regional dynamics influence contractor planning and resource management:
| Region | Operational Facilities | Planned/Under Construction | Key Growth Factor |
|---|---|---|---|
| Virginia | 663 | 595 | Network density & tax incentives |
| Texas | 405 | 442 | High power capacity |
| Georgia | 162 | 285 | Southeast connectivity hub |
| Pennsylvania | 98 | 184 | largest AI data centers infrastructure market |
Colocation projects bring a unique set of challenges, particularly when it comes to meeting rigorous construction standards. Unlike typical commercial builds, these facilities demand extremely high specifications. For instance, MEP (Mechanical, Electrical, and Plumbing) trades account for 60–70% of total construction value, with electrical work alone making up 30–40% of overall costs. To ensure reliability, contractors must comply with Uptime Institute Tier classifications and NFPA fire codes. Tier III facilities require N+1 redundancy, while Tier IV facilities demand fully duplicated (2N) systems. Additionally, floor slabs must handle heavy loads of 250–350 PSF, and fire protection systems often include VESDA (Very Early Smoke Detection Apparatus) paired with clean agent suppression systems like FM-200 or Novec 1230.
Electrical work is especially demanding. For instance, contractors must secure NETA (InterNational Electrical Testing Association) certification for testing medium-voltage switchgear and UPS systems. Many developers also require contractors to maintain an Experience Modification Rate (EMR) below 0.85, ensuring safety and reliability. On top of that, commissioning costs alone can account for 5–8% of total construction expenditures.
Labor shortages are a significant hurdle in colocation construction. Over 80% of construction firms report difficulties filling both hourly and salaried positions. These shortages are even more pronounced in large-scale projects, where peak crew sizes have skyrocketed. For example, mega-campuses that once required around 750 workers now need between 4,000 and 5,000 workers.
A prime example of this challenge is the DataBank Red Oak Campus in Texas, which scaled its workforce to meet activation demands in January 2026. The project faced additional complexity when customer needs shifted mid-deployment, reducing the number of liquid-cooled data halls from nine to seven to better align with network capacity. Similarly, the Vantage Data Centers Shackelford County Campus - a $25 billion project spanning 1,200 acres with 1.4 GW of capacity - is expected to generate 5,000 construction and operations jobs, requiring premium pay and rotating shifts to attract workers.
"The biggest constraint in data center construction is execution capacity, not demand, capital, or land availability." - MSUITE
The labor crisis is most severe for key roles like mission-critical superintendents, MEP coordinators, and commissioning managers, with salaries for these positions often exceeding general commercial construction rates by 10% or more in high-demand markets. States like Virginia, Texas, Arizona, and California are among the hardest hit by these shortages.
Modern construction methods are helping to ease some of these workforce challenges. Colocation projects increasingly rely on connected workflows that integrate design, fabrication, and installation through shared digital platforms. High-precision LOD 400/500 modeling is now standard in high-density mechanical and electrical environments, enabling just-in-time deliveries and reducing on-site storage needs.
Off-site prefabrication is another game-changer. With a smaller crew of just 20–50 workers, off-site teams can often outperform larger on-site teams in terms of productivity. Tools like robotic total stations and laser scanners ensure precise alignment with digital models, as seen in the QTS Data Center in Phoenix, which successfully implemented these workflows to manage high-density mechanical and electrical demands by December 2025.
"Contractors who adopt connected workflows today aren't just equipped for data centers. They're building capabilities that will define competitive performance across all projects in the years ahead." - Duane Gleason, Industry Workflow Director, Trimble
Procurement timelines also add complexity. Diesel generators require lead times of 40–60 weeks, while medium-voltage switchgear takes 30–50 weeks. To stay on schedule, contractors must secure long-lead equipment early in the design phase, emphasizing the importance of tight coordination across teams. These advancements highlight the growing need for skilled recruitment and innovative strategies in mission-critical construction.
With the labor challenges discussed earlier, having a specialized workforce is crucial for handling mission-critical data center projects effectively.
Colocation construction requires expertise across several disciplines. Project Managers oversee critical schedules, while Cost Estimators handle bid development and scope analysis. MEP Specialists focus on HVAC and power systems, and Commissioning Engineers ensure system performance through all commissioning stages - ranging from factory witness testing to integrated systems testing - helping maintain high system uptime. Additionally, MEP Coordinators and Schedulers manage intricate integrations and ensure critical path timelines are met. Contractors must also possess strong knowledge of electrical systems and IT/telecommunications infrastructure, adhering to standards like TIA-942 and BICSI 002 to support mission-critical environments effectively. Certified professionals, such as those with PMP credentials, can earn between $115,000 and $150,000 annually.
The complexity of these roles highlights the importance of tailored recruitment strategies for mission-critical projects. General construction recruiting often falls short for colocation projects, as these require candidates with deep knowledge of mission-critical systems and adherence to specific industry standards. This is where iRecruit.co excels, specializing in placing experienced construction leaders for such demanding projects, with a success-based fee model.
Their process ensures contractors receive pre-qualified candidates who have been rigorously evaluated for technical expertise, salary expectations, and role-specific qualifications, simplifying the hiring process. With a 90% client retention rate, iRecruit.co aims to secure accepted offers within 30 days of initiating a search. For instance, Isabella Wright, a Mechanical Systems SME, optimized HVAC design and commissioning for a 1.2-million-square-foot project, cutting energy use by 18%. Similarly, Charlotte Morgan contributed during the design phase of a $500-million Tier IV data center rollout, reducing commissioning issues by 40%. These examples underscore the value of partnering with recruiters who understand the unique demands of data center construction. Transparent pricing models further enhance this targeted recruitment approach.
iRecruit.co offers flexible pricing based on hiring volume, including a 90-day replacement credit. The success fee can be paid upfront or distributed over 12 months, ranging from 2–3% of the first year's salary.
| Plan | Monthly Fee (Per Active Role) | Success Fee (% of 1st Year Salary) | Key Features |
|---|---|---|---|
| 1 Open Role | $0/mo per role | 25% (or 3% monthly for 12 months) | Pay only upon a successful hire; includes a 90-day replacement credit |
| 2 Open Roles | $8,000/mo total ($4,000 per role) |
20% (or 2% monthly for 12 months) | Scaled recruiting with a dedicated account manager |
| 3+ Open Roles | $10.5k+/mo total ($3,500 per role) |
20% (or 2% monthly for 12 months) | Comprehensive recruiting for larger volumes, offering greater cost efficiency |
Contractors can expect to finalize a candidate matrix by Day 1, start interviewing pre-screened candidates by Day 10, and extend offers by Day 21. For large-scale projects, such as a 100MW expansion requiring multiple leadership hires simultaneously, the discounted fee structure for 3+ open roles ensures better cost management. Efficient recruitment combined with competitive pricing is essential for meeting the fast-paced demands of colocation projects.
When working with specialized teams, contractors must adopt delivery methods that meet the demands of colocation's tight timelines and critical requirements. Alongside mastering rapid delivery techniques, incorporating energy-efficient systems is key to achieving long-term success.
The design-build approach has become a cornerstone for meeting the fast-paced schedules required by colocation operators. Traditional construction timelines of 24–36 months are no longer practical, especially when delays in commissioning a 60MW data center can cost developers roughly $14.2 million per month in lost revenue. By leveraging modular and prefabricated construction, contractors can shift risk management to the design phase and cut schedules by 30% to 50%, reducing overall timelines to 16–20 months. Components like power skids, cooling assemblies, and white space modules are pre-assembled and tested off-site, allowing on-site work to progress simultaneously.
Early procurement of long-lead items is another critical factor in meeting these ambitious timelines. Contractors should align schedules with manufacturing progress and begin procurement efforts 12–18 months in advance. BJ VanOrman, ERP Strategic Director at JE Dunn Construction, emphasized the importance of integrated systems for decision-making:
"Having all the information we need integrated within CMiC's single source of truth database, such as HR, payroll, resource planning, cost management, has provided our staff with the visibility they need to make better and quicker decisions."
Phased delivery planning is another effective strategy, allowing one data hall to become operational while construction continues on others. This approach maximizes revenue for operators while maintaining site safety and logistical coordination. Once delivery schedules are optimized through these streamlined methods, the focus shifts to energy-efficient infrastructure.
Shortened project timelines must go hand in hand with energy-efficient systems to lower operational costs. As AI workloads drive rack densities from the traditional 5–8kW to a range of 15kW to 50kW, advanced cooling technologies have become essential for high-density deployments. Liquid cooling systems - such as direct-to-chip cooling, immersion cooling, and water-source heat rejection - can reduce overall facility power consumption by 20% to 40% compared to traditional air-based systems. These technologies achieve a Power Usage Effectiveness (PUE) of 1.15, outperforming the 2023 industry average of 1.3 for newly built facilities.
Rob Dunn, CEO of Start Campus, highlighted the potential of innovative cooling methods:
"Using partners such as Nautilus, we can fully leverage the cooling power of the Atlantic Ocean. This means we can scale up without having to introduce chillers, cooling towers, and less sustainable technologies."
Battery Energy Storage Systems (BESS), with capacities ranging from 5MW to over 50MW, are increasingly being integrated to handle peak loads, address grid instability, and support sustainability goals. Additionally, contractors should explore vendor-agnostic cooling distribution units (CDUs) that can accommodate multiple cooling methods - such as hot aisle, rear-door, immersion, and direct-to-chip cooling - within a single data hall. This ensures flexibility and scalability for future needs.
Thorough commissioning is essential to verify system redundancy and performance before project handover. This step safeguards contractor reputations and ensures uptime requirements are met in these mission-critical environments.
The colocation data center market is on a fast track for growth. By 2025, construction spending in the U.S. is expected to hit $62 billion, with projections surpassing $94 billion annually soon after. For contractors, thriving in this environment requires more than just traditional skills - it demands specialized certifications, advanced technical knowledge, and a workforce strategy and skill gap analysis.
With spending on the rise, precision is non-negotiable. Contractors must be proficient in advanced cooling technologies like Direct Liquid Cooling (DLC) and Rear-door Heat Exchangers (RDHx) to compete for high-value projects. Yet, fewer than 15% of mechanical contractors nationwide currently have DLC installation experience. This expertise is critical as downtime in these facilities can cost between $1 million and $5 million per hour, pushing owners to prioritize "zero-defect" delivery and proven commissioning results over low bids.
For firms without direct data center experience, starting small with edge projects or teaming up with experienced partners can be a smart way to build credibility in this specialized field. Early investment in training and setting aside 8%–12% of supervision costs for QA/QC processes are also key to meeting stringent documentation and testing standards.
Shifting market demands further complicate the landscape. AI-driven infrastructure now requires significantly more power - up to 150 kW per rack compared to the 10–15 kW of traditional systems - making liquid cooling systems a necessity rather than a luxury. Meanwhile, regulations in states like Virginia and California are pushing for air-cooled or closed-loop systems to conserve water. Adding to the pressure, data center RFPs often allow only 14 to 21 days for responses, far shorter than the 30 to 45 days typical of commercial construction. However, the reward is substantial, with profit margins for colocation projects running 15% to 25% higher than comparable commercial builds.
Success in this evolving market hinges on combining technical expertise, strategic workforce planning, and modern delivery methods. To dive deeper into building expert teams, check out our data center construction guide. The future belongs to contractors who invest in specialized skills, embrace new technologies, and deliver the high standards required for mission-critical projects.
To secure colocation projects, it’s all about proving you’re the right partner for the job. Start by showcasing your expertise in data center construction and ensuring your approach aligns with what clients are looking for. Here’s how you can stand out:
Additionally, emphasize your ability to control costs, stick to timelines, and stay informed on industry trends. These factors will help position your firm as a dependable and forward-thinking partner for colocation work.
If you're aiming to keep your data center project on track, one thing is clear: order critical equipment early. Items like transformers and generators often come with lead times stretching beyond 100 weeks. Supply chain bottlenecks and manufacturing delays are common culprits.
By prioritizing the procurement of these essential components upfront, you can sidestep potential disruptions and ensure your construction timeline stays intact.
It's smart to think about liquid cooling right from the start, ideally during the design phase. With the rise of AI, machine learning, and GPU-heavy workloads, traditional air cooling often struggles to keep up. Planning early ensures your infrastructure can handle high-density heat loads without needing expensive upgrades later.
Consider key factors like site requirements, water availability, and necessary infrastructure adjustments. This approach makes it easier to integrate liquid cooling systems effectively and meet the growing demands for performance.
