Digital Realty Expands Northern Virginia Footprint with $7.8 Billion Blackstone Deal — Digital Realty Trust, L.P.

Event summary

Digital Realty acquires Blackstone’s 64% stake in three Northern Virginia data centers for $3.5 billion, including $1.2 billion cash and $2.3 billion in shares.
The portfolio includes 288 megawatts of IT capacity across three fully leased facilities with 15-year leases to investment-grade hyperscale customers.
Transaction expected to close June 30, 2026, with two data centers stabilizing in H1 2027 and the third in H1 2028.
Deal reflects an initial stabilized capitalization rate of over 6.5% and is expected to be accretive to Core FFO per share in 2027 and 2028.

The big picture

This transaction deepens Digital Realty’s presence in Northern Virginia, a critical hub for cloud and hyperscale infrastructure. The deal reflects the ongoing consolidation in data center real estate as institutional investors like Blackstone seek to monetize high-value assets while operators like Digital Realty expand their portfolios. With $7.8 billion in gross value, this acquisition underscores the escalating demand for digital infrastructure and the strategic importance of long-term leases with creditworthy tenants.

What we're watching

Execution Risk: Whether Digital Realty can successfully integrate and stabilize the newly acquired assets on schedule.
Market Dynamics: How this deal will affect competition in Northern Virginia’s data center market, the world’s largest.
Strategic Growth: The pace at which Digital Realty can leverage these assets to expand its private capital platform and support hyperscale customer demand.