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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 from Blackstone-affiliated funds for a total consideration of $3.5 billion.

💰 The deal includes $1.2 billion in cash and $2.3 billion in Digital Realty shares, valuing the 288 megawatt portfolio at a gross value of $7.8 billion.

📍 The portfolio consists of two 96-megawatt centers in Manassas and one 96-megawatt center in Sterling, all currently 100% leased to hyperscale customers.

📅 Two facilities are expected to stabilize in the first half of 2027, with the third anticipated to stabilize in the first half of 2028.

🤝 The assets carry 15-year leases with investment-grade AA- credit ratings and 3.6% annual rent escalators.

📈 Digital Realty expects the acquisition to be accretive to Core FFO per share in 2027 and 2028 upon stabilization.

🚀 The transaction expands Digital Realty's presence in Northern Virginia, the world's largest data center market, with high-quality hyperscale tenants.

🏗️ The purchase includes assumed debt and remaining capital expenditures required to complete ongoing development of the assets.

🤝 Blackstone expressed deep conviction in the digital infrastructure opportunity ahead following the successful joint venture partnership.

📊 Digital Realty's CIO Greg Wright noted this deal reflects the next phase of their long-standing relationship across multiple global investments.

Bullish Signals
  • Digital Realty is acquiring a portfolio of fully leased, high-quality assets with 100% occupancy from investment-grade hyperscale customers.
  • The assets are supported by 15-year leases featuring 3.6% annual rent escalators, providing long-term revenue visibility and growth.
  • The acquisition is expected to be accretive to Core FFO per share in both 2027 and 2028 once development completes.
  • Digital Realty will increase its ownership stake in a portfolio of newly constructed assets in the world's largest data center market.
  • The deal extends Digital Realty's runway for growth and strengthens its pipeline of product for continued expansion.
  • Blackstone expressed deep conviction in the digital infrastructure opportunity, citing demand that is even stronger today than when the joint venture was established.
Full Analysis
Digital Realty (NYSE: DLR) announced an agreement to purchase a stake in three fully leased data centers located in Northern Virginia from Blackstone-affiliated funds. 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 estimated at $7.8 billion, reflecting an expected initial stabilized capitalization rate of over 6.5%. The transaction involves Digital Realty acquiring 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 footprint in the world's largest data center market. The acquired assets are currently 100% leased to three distinct investment-grade hyperscale customers under 15-year leases featuring 3.6% annual rent escalators. Two of the data centers are projected to stabilize in the first half of 2027, while the third is expected to stabilize by the first half of 2028. This acquisition will increase Digital Realty's exposure to new capacity with premier customers, enhancing growth visibility and portfolio quality. Digital Realty executives stated that the transaction is expected to be accretive to Core Funds From Operations (FFO) per share in both 2027 and 2028 once development completes. The purchase allows Digital Realty to increase its ownership in high-quality, fully leased assets, extending its runway for growth and strengthening its strategic private capital platform within the Northern Virginia market.