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Bullish +75

Digital Realty Announces Purchase of Blackstone Interest in Three Northern Virginia Data Centers

🏢 Digital Realty agreed to purchase a stake in three Northern Virginia data centers containing 288 megawatts of IT capacity from Blackstone-affiliated funds.

💰 The total consideration for the blended 64% equity interest is $3.5 billion, comprising $1.2 billion in cash and $2.3 billion in Digital Realty shares.

📅 The transaction is expected to close on June 30, 2026, following an announcement on June 29, 2026.

🔋 The portfolio consists of two 96-megawatt facilities in Manassas and one 96-megawatt facility in Sterling, all fully leased to hyperscale customers.

📈 Assets are valued at a gross price of $7.8 billion with an expected stabilized capitalization rate exceeding 6.5%.

🤝 Digital Realty will acquire Blackstone's 80% interest in the Manassas centers and 50% interest in the Sterling center at 100% share value.

📅 Two data centers are expected to stabilize in H1 2027, with the third facility stabilizing in H1 2028.

📜 Tenants hold 15-year leases with a blended average AA- customer credit rating and 3.6% annual rent escalators.

💵 The acquisition is projected to be accretive to Digital Realty's Core FFO per share in 2027 and 2028 upon completion.

🚀 The deal expands Digital Realty's exposure to new capacity in the largest data center market with premier hyperscale customers.

Bullish Signals
  • Digital Realty is acquiring a significant stake in high-quality, fully leased hyperscale assets that are 100% occupied by investment-grade customers.
  • The portfolio includes 288 megawatts of IT capacity secured under long-term 15-year leases with AA- credit ratings and 3.6% annual rent escalators.
  • The transaction is expected to be accretive to Core FFO per share in both 2027 and 2028 once development and stabilization are complete.
  • Digital Realty increases its ownership in a portfolio of new, high-quality assets that extend its growth runway and product pipeline.
  • The acquisition enhances the company's exposure to Northern Virginia, recognized as the world's largest and most sought-after data center market.
  • The deal reflects strong demand for digital infrastructure, with Blackstone expressing deep conviction in the opportunity ahead.
Full Analysis
Digital Realty (NYSE: DLR) has agreed to acquire a stake in three fully leased data centers located in Northern Virginia from Blackstone-affiliated funds managed by Real Estate, Infrastructure and Tactical Opportunities. The portfolio includes two facilities in Manassas and one on the Digital Dulles campus in Sterling, collectively offering 288 megawatts of IT capacity. The total gross value of the assets is $7.8 billion, reflecting an expected initial stabilized capitalization rate of over 6.5%. The transaction involves Digital Realty purchasing Blackstone's blended 64% equity interest for a total consideration of $3.5 billion. This payment structure includes $1.2 billion in cash and $2.3 billion in shares of Digital Realty stock, based on the closing price on June 29, 2026. The deal is expected to close on June 30, 2026, subject to customary conditions, marking a significant expansion of Digital Realty's ownership in high-quality hyperscale assets. The acquired data centers are currently 100% leased to three distinct investment-grade hyperscale customers under 15-year leases featuring 3.6% annual rent escalators. Two of the facilities are expected to stabilize in the first half of 2027, while the third is anticipated to stabilize by the first half of 2028. This acquisition is projected to be accretive to Digital Realty's Core Funds From Operations (FFO) per share once development and stabilization are complete. Digital Realty executives highlight that this purchase extends their growth runway and pipeline within the world's largest data center market, supported by premier customers with AA- credit ratings. The deal strengthens the company's strategic private capital platform and portfolio quality, aligning with ongoing demand for digital infrastructure driven by cloud computing and artificial intelligence needs.