Data Center Development Cost Guide 2025

DATA CENTER DEVELOPMENT COST GUIDE 2025

CONSTRUCTION COSTS COSTS REMAIN HIGH BUT ARE DECELERATING

UNITED STATES: COSTS INDICES (JAN-2020 = 100)

Oct-24

140

135

130

125

120

110 115

105

100

95

90

Jul-21

Jul-19

Jul-22

Jul-23

Jul-24

Jan-21

Jul-20

Mar-21

Jan-19

Mar-19

Sep-21

Sep-19

Nov-21

May-21

Jan-22

Jan-23

Jan-24

Mar-22

Mar-23

May-19

Mar-24

Jan-20

Mar-20

Sep-22

Sep-23

Sep-24

Nov-22

Nov-23

May-22

May-23

Sep-20

May-24

Nov-20

May-20

Building Cost Index

Construction Cost Index

Common Labor Index

Skilled Labor Index

Index

2021-2023 CAGR

YOY - OCT ‘24

Change

Building Cost

8.7%

1.8%

-6.9%

Construction Cost

5.1%

1.0%

-4.1%

Common Labor

1.4%

1.8%

+0.4%

Skilled Labor

2.9%

0.9%

-2.0%

Source: Cushman & Wakefield Research, Moody’s Analytics: Engineering News Record (ENR) (McGraw-Hill)

Building and construction input costs increased sharply after the pandemic, driven by material shortages caused by supply chain issues alongside sustained demand. Between October 2020 and October 2021, building costs rose by 14% and construction costs by 8%. As of October 2024, costs remain elevated, but the rate of escalation has slowed drastically, with the Building Cost Index (BCI), Construction Cost Index (CCI) and Skilled Labor Index (SLI) showing lower growth rates over the past year.

Skilled labor costs grew at an above-average rate following the initial pandemic reopening, with a compound annual growth rate (CAGR) of 2.9% from 2021 to 2023 compared to 2% from 2017 to 2019. As of October 2024, the Skilled Labor Index (SLI) exhibited slower growth at 0.9% year-over year (YOY), while common labor costs rose at a slightly higher rate of 1.8% YOY—0.4% above the annual growth from 2021 to 2023.

4

5

Cushman & Wakefield