Digital Realty Acquires Blackstone's $3.5B Stake in Three Northern Virginia Data Centers
Digital Realty (NYSE: DLR) and Blackstone Inc. (NYSE: BX) announced that Digital Realty has agreed to purchase Blackstone's equity interest in three fully leased hyperscale data centers in Northern Virginia for total consideration of $3.5 billion, in a deal that deepens Digital Realty's footprint in the world's largest data center market.
The transaction was announced June 29, 2026, and is expected to close June 30, 2026. It involves Digital Realty acquiring Blackstone's blended 64% equity interest in a portfolio of three data centers totaling 288 megawatts of IT capacity, at a gross asset value of $7.8 billion. The expected initial stabilized capitalization rate is over 6.5%.
Deal Structure and Consideration
Total consideration paid to Blackstone for its equity interest amounts to $3.5 billion, structured as $1.2 billion in cash and $2.3 billion in shares of Digital Realty common stock, valued at the last reported sale price on the New York Stock Exchange on June 29, 2026.
The specific stakes being acquired differ by asset. Digital Realty is purchasing Blackstone's 80% interest in two 96-megawatt data centers in Manassas, Virginia, and a 50% interest in one 96-megawatt data center in Sterling, Virginia, on the Digital Dulles campus. The gross $7.8 billion valuation includes assumed debt and remaining capital expenditures to complete ongoing development.
Portfolio Profile: Fully Leased, Investment-Grade Tenants
The three-asset portfolio — comprising two data centers in Manassas and one facility on the Digital Dulles campus in Sterling — is 100% leased to three distinct investment-grade hyperscale customers. Each facility carries 96 megawatts of IT capacity.
The leases carry 15-year terms with a blended average tenant credit rating of AA- and annual rent escalators of 3.6%, providing long-duration, contractually growing cash flows. Two of the three data centers are expected to stabilize in the first half of 2027, with the third anticipated to stabilize in the first half of 2028, as development is completed and rents commence.
Strategic Rationale
"We have developed a strong partnership with Blackstone through the successful ongoing development of these assets, and we continue to work together across the remaining data center investments in our joint ventures in Northern Virginia, Paris and Frankfurt," said Greg Wright, Chief Investment Officer of Digital Realty. "This transaction reflects the next phase of that relationship, allowing us to increase our ownership in a portfolio of fully leased, high quality hyperscale assets that extend our runway for growth and pipeline of product for the continued expansion of our strategic private capital platform."
Digital Realty describes itself as the world's largest cloud- and carrier-neutral data center platform with more than 300 facilities in 55-plus metros across 30-plus countries. The company frames the acquisition as expanding its exposure to new capacity in Northern Virginia, supported by long-term leases with hyperscale customers in newly constructed assets.
Matt Mercier, Chief Financial Officer of Digital Realty, said the transaction is expected to be accretive to Core FFO per share in each of 2027 and 2028, as development is completed and rents commence. Mercier also cited expected accretion to contractual organic rent growth and portfolio quality.
"We believe that our execution to date and the recently announced strategic transactions, position Digital Realty to extend its growth trajectory," Mercier said.
Blackstone's Perspective and Continued Partnership
Blackstone, which manages more than $1.3 trillion in assets under management across real estate, private equity, infrastructure, and other strategies, established the joint venture with Digital Realty in 2023. The transaction involves funds managed by Blackstone's Real Estate, Infrastructure, and Tactical Opportunities businesses.
Mike Forman, Global Head of Digital Infrastructure for Blackstone Real Estate, and Greg Blank, Global Head of Digital Infrastructure for Blackstone Infrastructure, said in a joint statement: "We are thrilled with this transaction and the early success of our joint venture with Digital Realty. The Digital Realty team has been exceptional to work with, and we look forward to our continued partnership. The demand for digital infrastructure is even stronger today than when we established this joint venture in 2023, and we have deep conviction in the opportunity ahead."
The two firms noted that their partnership extends beyond this transaction, with ongoing joint venture investments remaining in Northern Virginia, Paris, and Frankfurt. The acquisition represents a partial consolidation of the joint venture rather than a full dissolution of the relationship.