�ǿ�����app����

Infrastructure, both digital and traditional, has experienced cyclical and structural transformations throughout U.S. history. As we examine the commercial real estate landscape in 2025, digital infrastructure stands out as the only segment in a boom �� and a structural boom at that �� driven primarily by investment in AI-related data center development. The level of spending in the past two years on the facilities that support digital-age innovation is unprecedented, and is redirecting commercial real estate capital, physical structures, and powered land into the data center sector. This trend is particularly evident in industrial real estate, which shares more overlap with the data center segment than any other sector. Despite the ongoing generational growth, data center development is struggling to keep pace with advancements in AI requirements and rising demand due to one tangible constraint in particular �� power. This dynamic is both extending the new paradigm of infrastructure scaling and spurring the exploration of new markets and solutions to meet the demand. Adding further complexity, a key question has arisen: How will these massive investments in AI demonstrate their value in the years to come, especially as international competitors develop alternative AI models that may be more cost-effective and energy-efficient?

�ǿ�����app����’s U.S. 2025 data center sector report offers an in-depth analysis of the national data center market, examining key trends, transactions and emerging markets, and providing an outlook for what’s to come.

Executive Summary

• Digital Transformation:�� AI-related data centers have become a primary focus of real estate investment and development, directing an all-time high of $31.5 billion in annualized spending on new data center construction. This has driven the development pipeline to nearly 50 million square feet at the end of 2024, essentially doubling the volume from five years ago.
• Power Constraints: Projected power demands from all existing and planned U.S. data centers exceed what utilities are set to supply by around 50%, creating a significant limitation on growth. This gap is pushing data center users and developers to explore alternative solutions, from the deployment of natural gas-fired power plants to investing in emerging technologies like small nuclear reactors (SMRs).
• Emerging Markets: The expansion of data center development and search for power is opening up new markets, including economically underserved regions like West Texas, as illustrated by a recent proliferation of new data center projects.
• Sector Overlaps: The data center and industrial real estate sectors intersect in numerous notable ways, including significant shifts in land acquisition trends. In the last 24 months, an estimated 24% of all industrial-zoned development site acquisitions were for data center development. By far, hyperscalers are driving these acquisitions, accounting for over 10% of all commercial development site purchases in 2024 -regardless of site zoning.
• Policy and Market Influences: Federal support for AI infrastructure projects and changing economic policies are reshaping the data center landscape. With the revelation of DeepSeek’s cost-efficient AI model in January 2025, concern around falling behind in an international AI race is heightened, driving U.S. hyperscaler investment to new heights in 2025.