The quick read: Data centers. In the federal data, construction spending is going to data centers first, and the Atlanta Fed ties expanding construction lending to data center buildouts. The Census Bureau's August 2026 report puts private office construction at a $134.1 billion annual rate, up 29.8% in a year, and Census counts data centers inside office: by our arithmetic on its detail file, data center spending rose 73.2% while general office fell 9.7%. Lodging fell 10.1%, manufacturing fell 19.8% and new multifamily was flat. In the Fed's October 2026 Beige Book, the Atlanta district said construction and land development lending expanded amid continued data center buildouts, while Philadelphia and Kansas City reported softer commercial real estate lending. If your project sits in a shrinking category, plan the equity and the lender list before you ask for a term sheet.
What did August 2026 construction spending show by property type?
The Census Bureau's August 2026 construction spending report, released October 1, 2026, shows private office construction at a $134.1 billion seasonally adjusted annual rate, up 29.8% from August 2025, while lodging fell 10.1%, manufacturing fell 19.8% and new multifamily slipped 0.6%. Total construction spending was $2,203.1 billion, 1.7% below a year earlier.
The office number is mostly a data center number. Census's construction spending definitions list data center as a subcategory of office, covering buildings that contain the hardware needed for storing, processing and transmitting digital information. In Census's private seasonally adjusted detail file, data center construction ran at $84.95 billion in August 2026 against $49.05 billion in August 2025, a 73.2% rise by our arithmetic, and made up about 63% of private office spending. General office, the subcategory that holds office buildings, administration buildings and professional buildings, fell to $45.8 billion, a 9.7% drop by our arithmetic. On the same arithmetic, the data center gain of about $35.9 billion is larger than the whole office category's gain of about $30.8 billion, so a speculative multi-tenant office building is not riding the office headline.
Manufacturing shows the reverse. Private spending at manufacturing sites fell from $209.8 billion to $168.2 billion, and in the detail file the computer, electronic and electrical subcategory alone fell from $95.4 billion to $52.3 billion, down 45.2% by our arithmetic. On the same math, that $43.1 billion drop is larger than the entire category's $41.6 billion decline. Census puts warehouses at manufacturing sites in manufacturing; stand-alone warehouses sit in commercial, where warehouse spending fell to $53.1 billion, down 8.1% by our arithmetic.
New multifamily ran at $115.8 billion against $116.5 billion a year earlier. Census's Table 3 puts the standard error on that year-over-year change at 4.2 percent, so a 0.6% dip is inside the survey's sampling noise: call it flat. Every figure here is in current dollars. Census notes the series is adjusted for seasonality but not for price changes, so part of any dollar gain can be cost rather than more building.
Table: Private construction spending by property type, August 2026 versus August 2025 (Census dollar levels, seasonally adjusted annual rate)
| Line | Data center | General office | New multifamily | Warehouse | Lodging | Manufacturing | Health care |
|---|---|---|---|---|---|---|---|
| Line August 2026 | Data center $85.0B | General office $45.8B | New multifamily $115.8B | Warehouse $53.1B | Lodging $23.3B | Manufacturing $168.2B | Health care $57.0B |
| Line August 2025 | Data center $49.1B | General office $50.7B | New multifamily $116.5B | Warehouse $57.8B | Lodging $26.0B | Manufacturing $209.8B | Health care $60.3B |
| Line Change vs August 2025 | Data center +73.2% (our arithmetic) | General office -9.7% (our arithmetic) | New multifamily -0.6% | Warehouse -8.1% (our arithmetic) | Lodging -10.1% | Manufacturing -19.8% | Health care -5.4% |
| Line Lender appetite signal (our read of spending and Fed reports) | Data center Growing; Atlanta Fed: construction lending expanded with data center buildouts | General office Shrinking; Minneapolis Fed: office starts flat | New multifamily Flat; a modest net share of banks eased multifamily standards in Q2 | Warehouse Shrinking; Atlanta Fed: industrial vacancies ticked up | Lodging Shrinking; Kansas City Fed: hotel bookings slowed | Manufacturing Shrinking most; chip and electronics plants down 45.2% (our arithmetic) | Health care Shrinking |
Table note: Census's detail file publishes dollar levels only, so the data center, general office and warehouse changes are our arithmetic on those levels. The other changes are the ones Census states in Table 1 of its release.
Total construction, August 2026 (Census): $2,203.1 billion annual rate, 1.7% below August 2025 Private construction, August 2026 (Census): $1,655.3 billion annual rate, 3.1% below August 2025 Data center share of private office spending, August 2026 (Census detail file, our arithmetic): about 63% Next Census construction spending release (September data): November 2, 2026
Where did Fed districts report construction lending expanding or slowing?
The Federal Reserve's October 2026 Beige Book, released October 14 from information collected on or before October 5, ties expanding construction lending to data centers: the Atlanta district says construction and land development lending expanded amid data center buildouts. Philadelphia says commercial real estate lending ticked down slightly, and several Kansas City bankers noted weaker commercial real estate loan demand.
Several other districts report costlier or tighter credit, and several tie what construction there is to data centers. In Kansas City, commercial real estate activity rose moderately across several property types, but market participants said access to credit diminished recently and lenders reported that spreads on commercial real estate loans rose substantially. Dallas bankers said credit standards and terms tightened and loan pricing increased, even as commercial real estate loans helped drive loan volume growth; the same report says new data center construction in Texas has tempered under a state regulatory pause on data center permits. New York banks tightened credit standards slightly for commercial mortgages, with demand for them flat. Boston contacts said loan availability was stable but financing costs increased and loan terms tightened, and that multifamily construction was down slightly.
Elsewhere: San Francisco contacts said some lenders tightened terms for certain commercial real estate projects, that construction activity was concentrated in data centers, government and infrastructure projects, and semiconductor factories and warehouses, and that multifamily supply continued to outpace demand. Philadelphia reported continued construction by firms in the data center and related manufacturing spaces but little new activity elsewhere. In Minneapolis, office and retail construction starts stayed flat while speculative industrial starts continued in Minneapolis and St. Paul.
The national bank survey adds numbers. The Fed's July 2026 Senior Loan Officer Opinion Survey, covering the second quarter, found standards for construction and land development loans basically unchanged on net, but 25.9% of domestic banks reported moderately weaker demand for those loans against 14.9% reporting stronger demand, our sum of the moderately and substantially stronger shares. Asked where standards sit against their range since 2005, 41.5% of banks put construction and land development standards somewhat tighter than the midpoint and another 5.7%, our sum of two answer shares, significantly tighter or near the tightest level, against 17.0% somewhat easier. Large banks reported easier standards on every commercial real estate loan type; banks under $100 billion in domestic assets held construction and multifamily standards basically unchanged.
Banks reporting weaker construction and land development loan demand, Q2 2026 (Fed survey, July 2026): 25.9% Banks reporting stronger demand, same question (our sum of two answer shares): 14.9% Banks reporting tighter construction and land development standards, Q2 2026: 5.6% Banks reporting easier standards, same question: 9.3%
What does that mean for your lender list and leverage?
It means a data center project is asking for money in the category where the Atlanta Fed reports construction lending expanding, while a speculative office, hotel or factory-adjacent project is asking in a shrinking category, where the lenders still quoting have more room to hold leverage down and ask for more equity, pre-leasing and reserves.
For banks, leverage starts with a supervisory ceiling. The Interagency Guidelines for Real Estate Lending Policies, which the FDIC publishes as an appendix to its real estate lending rule, set supervisory loan-to-value limits of 65% for raw land, 75% for land development, 80% for commercial, multifamily and other nonresidential construction, and 85% for one-to-four family residential construction. Each bank should set its own internal limits no higher than these, by property type, along with minimum hard equity from the borrower, pre-leasing and pre-sale requirements, limits on interest reserves and requirements for feasibility studies. Loans above the supervisory limits fit inside a capital budget: 100% of total capital in aggregate, and 30% for commercial, multifamily and other non-1-to-4 family property within that. These are bank guidelines; a non-bank lender writes its own policy.
We could not verify a public source for current construction leverage by property type, so this article does not quote one. The mechanism is what you can act on: the advance you are offered is each lender's own policy number for that property type, set at or below the supervisory limit, and it moves with how much exposure that lender wants to the category. Here is how the August data and the Fed reports translate by project type:
- Data center or powered shell: spending is growing, and the Atlanta Fed reports construction and land development lending expanding with data center buildouts; a lender will underwrite the tenant lease and the power delivery schedule. Dallas contacts report rising building costs for data center projects already underway and a state permit pause in Texas, so budget and permits are the gating items.
- Multifamily: spending is flat and a modest net share of banks eased multifamily standards in the second quarter, but San Francisco reports supply outpacing demand and Boston reports multifamily construction down slightly, so expect the lease-up assumptions to be tested against local concessions.
- Speculative office: general office spending fell 9.7% by our arithmetic on Census data, and Minneapolis reports office starts flat. Pre-leasing is the lever that moves a lender.
- Hotel: lodging spending fell 10.1%, and Kansas City contacts said hotel bookings slowed over the last two months. A feasibility study and a sponsor with hotel operating history carry more weight.
- Warehouse and industrial: warehouse spending fell 8.1% by our arithmetic on Census data, and Atlanta reports a slight uptick in industrial vacancies as new space came online, though Minneapolis reports speculative industrial starts continuing.
Run the equity math before you call anyone. The loan-to-cost calculator shows how much cash a lower advance rate requires on your budget, and the construction draw schedule guide covers how the money is released after closing.
What rates are construction loans priced over in late October 2026?
A floating-rate construction quote is a spread over a base rate, and on the latest FRED observations SOFR was 3.90% on October 22, 2026, the bank prime rate was 7.00% on October 21, 2026, and the 10-year Treasury yield was 5.13% on October 21, 2026. The spread is the part each lender sets.
The spread is where property type shows up. Kansas City lenders told the Fed that spreads on commercial real estate loans rose substantially, and Dallas bankers reported tighter standards and terms and higher loan pricing. Those are reports, not a rate sheet. Ask each lender for the spread, the floor, the interest reserve and the extension terms in writing, and check the 10-year yield when you model the permanent loan that will take the construction lender out.
SOFR, October 22, 2026 (FRED): 3.90% Bank prime loan rate, October 21, 2026 (FRED): 7.00% 10-year Treasury yield, October 21, 2026 (FRED): 5.13%
How do you get a construction loan placed when your property type is out of favor?
You get a construction loan placed in an out-of-favor category by putting one complete package, with budget, equity, pre-leasing and feasibility, in front of the lenders still active in that property type at the same time, so they compete on leverage, spread and reserves instead of you learning each lender's appetite one call at a time.
The brokerage option comes first in this article, which YieldStack publishes. YieldStack is an AI-native commercial mortgage brokerage that arranges financing for commercial real estate investors. For a construction loan in a category where lenders are pulling back, the reasons are specific:
- Breadth: software matches the deal against 20,000+ loan programs, so the search reaches construction lenders whose property-type appetite differs from the bank you already know
- Speed: YieldStack reports a median first offer in under an hour, from an institutional lender
- Cost: It costs Zero upfront to submit a deal and review offers; YieldStack's broker fee is 0.50–1.00% of the loan amount and is paid only at closing.
- Side of the table: Every credit decision is made by the lender; YieldStack arranges the introductions and negotiates on the borrower's side, and no loan, rate, or closing is guaranteed.
The alternative is to call lenders yourself, one at a time. That works when you already have a construction lender active in your property type. When you do not, each call tells you about one lender's appetite and restarts the underwriting.
When the budget, equity plan and any pre-leasing are ready, send the construction deal for review. For the loan product itself, see the construction loans page.
The bottom line
Construction spending in late 2026 is following data centers: by our arithmetic on Census data, data center construction rose 73.2% in a year to August 2026 while general office, warehouse, hotel and manufacturing spending fell and multifamily held flat. In the Fed's October 2026 Beige Book, Atlanta tied expanding construction and land development lending to data center buildouts.
If your project sits in a shrinking category, size your equity to the lenders still active in it, not to the supervisory limit, and put the package in front of several of them at once.