Data Center Demand Shows No Signs of Slowing

In this modern age of digital transformation, the escalating need for cloud-based technologies is spurring unprecedented demand for data centers across the U.S. This niche construction sector, valued at $20.21 billion in 2022, is projected to reach $28.56 billion and cover nearly 26 million square feet by 2028, according to the U.S. Data Center Construction Market Research Report.

In this Q&A, Darian Reams, AP’s Director of Mission Critical Services, shares his insights on key market nuances, drivers and demands for this robust construction market.

With data center construction, the biggest focus is the building envelope. Concrete facades are preferred as they increase the reliability, strength and security of these advanced facilities. In addition to its superior fire-resistance properties, concrete is highly resilient against typical weather impacts as well as natural disasters, terroristic attacks and other catastrophic events. Most data center providers are designing these hardened facilities to be capable of withstanding up to 165 mph winds (think EF3 tornadoes) and exceed building code requirements for seismic activity.

Speed of construction is imperative on data center projects, so we recommend either precast or tilt-wall concrete construction methods. Many clients are looking to build 100,000-square-foot buildings in an expedited time frame of six to nine months to start generating revenue as quickly as possible. In contrast, for a 100,000-square-foot higher education facility, the construction timeline is typically 18 months.

Roofing systems are another major consideration—not just to protect building contents from outside elements, but also from inside temperature fluctuations. Concrete roof structures are not only capable of withstanding increased winds, but also act as a cooling mechanism that counteracts the prolonged heat produced by data centers.

Having a strong MEP superintendent on staff has been vital to AP’s success with all mission-critical projects, including data centers. Ready access to mechanical, electrical and plumbing experts will make or break you in this highly technical building sector. We’re seeing a lot of retrofits and expansions of data center spaces, which is where this expertise really shines. These essential facilities must operate continuously or there could be severe or even life-threatening consequences. If you make a mistake when tying into an existing power source and cause an outage, you not only disrupt vital operations—you may also place the property owner’s service level agreement in jeopardy.

During preconstruction phases, general contractors should scrutinize constructability to ensure the design is feasible for the project time frame and budget. AP’s national Virtual Design and Construction (VDC) team concentrates heavily on assessing constructability—and not just in preconstruction phases, but throughout the entire project lifecycle.

In later project stages, our VDC solutions help to monitor project progress, enhance processes, reduce risk and boost construction quality. These sophisticated VDC capabilities make AP the complete package in terms of general contractor offerings supporting data center development.

Typically, design-assist and design-build approaches are ideal for mitigating constructability issues because they facilitate enhanced collaboration between design and construction teams in early project stages. This, in turn, provides a more unified vision and roadmap to achieving the owner’s goals and reduces chances for communication breakdowns, which can lead to costly mistakes or project delays.

Data centers can be found in various geographies across the U.S.—most often in large urban areas such as Los Angeles, Dallas, New York City, Atlanta, Chicago and Miami. These developments are largely focused in regions where there is good fiber connectivity, ample space, and access to a plentiful and reliable supply of water and electricity. Right now, the top three locations for data centers are northern Virginia, along with Portland and Hillsboro in Oregon.

Rural locations are also favorable for data centers because they usually offer more space for development and future expansion. In addition, more and more developers are choosing properties large enough to support renewable energy by building onsite power plants or are opting for solar power. Onsite power plants are more common in Europe, but the trend could easily pick up steam here in the U.S. as well due to strained electrical grids, like what is being experienced in the northern Virginia area.

Some developers are gravitating toward regions with more temperate, cooler climates to reduce energy consumption demands for these facilities, which produce large amounts of heat due to continuous operations and various other MEP system requirements. Due to recent droughts in some areas of the U.S., data center providers are evaluating alternative cooling methods such as air-cooled chillers, immersion cooling of servers in a dielectric liquid to dissipate heat, and “free cooling” from outside air infiltration into the facility. In many instances, the end result is a water-neutral facility. Many hyperscale data centers—which are larger facilities often built to house millions of servers and more virtual machines compared to conventional data centers—can consume roughly 4.3 billion gallons of water annually, which makes it even more imperative to find alternative cooling methods during years of drought.

 In addition to geography and climate, other major drivers in the data center market include Artificial Intelligence and Machine Learning. These and other emerging “smart” technologies are prompting developers to rethink facility designs to accommodate the digital shift. The widespread adoption of remote-based work also requires much more connectivity.

The demand for cloud-based information is higher than ever with no sign of slowing down in the foreseeable future. Tech companies across the country need dedicated space to support this vital digital infrastructure. Construction will have to ramp up even further to add capacity by expanding existing data center facilities and building new ones.

As with other complex construction markets, mission-critical projects face a variety of challenges—from supply chain disruptions and skilled labor shortages to power and water constraints, soaring costs for land and utilities, more rigorous project sustainability goals and increased public relations challenges.

AP plans to continue expanding its Mission Critical Services division to meet the nation’s growing need for well-built, reliable data centers. Our company’s deep technical knowledge, cutting-edge VDC capabilities and vast industry connections are all paramount to achieving this vision and helping clients successfully navigate any potential obstacles on the horizon.