Digital Realty Acquires 64% Blackstone Stake in $7.8B Virginia Data Centers, Enables $2.35B Share Sale
DLR•Digital Realty will acquire Blackstone’s 64% stake in three Northern Virginia data centers (288 MW) for $3.5 billion (including $1.2 billion cash, $2.3 billion stock), valuing assets at $7.8 billion with a 6.5% cap rate. Blackstone will concurrently sell $2.346 billion of non-voting shares convertible to common stock at closing.
1. Acquisition of Northern Virginia Data Centers
Digital Realty agreed to purchase Blackstone’s 64% equity interest in three fully leased Northern Virginia data centers—two in Manassas and one in Sterling—totaling 288 MW of IT capacity for a gross asset value of $7.8 billion. The $3.5 billion consideration comprises $1.2 billion of cash and $2.3 billion of common stock, at an expected stabilized cap rate of over 6.5%, with the transaction set to close June 30, 2026.
2. Blackstone Secondary Share Offering
Concurrent with the acquisition, Blackstone affiliates will conduct an underwritten public offering of $2.346 billion of newly issued non-voting Digital Realty shares that will automatically convert into common stock upon closing of the joint venture acquisition. Morgan Stanley is the sole underwriter, and Digital Realty will not receive any proceeds from the sale.
3. Financial and Strategic Implications
The acquisition is expected to be accretive to core FFO per share in 2027 and 2028 as the assets stabilize under 15-year leases with AA-rated hyperscale customers and 3.6% annual rent escalators. Increasing ownership in high-quality hyperscale facilities in the world’s largest data center market aims to bolster contractual organic rent growth and extend Digital Realty’s growth trajectory.
