Digital Realty acquires $3.5 billion Blackstone hyperscale data center portfolio in major consolidation deal.

Digital Realty has agreed to purchase Blackstone's blended 64% equity interest in three fully leased Northern Virginia hyperscale data centers at a gross value of $7.8 billion, with an expected initial stabilized capitalization rate exceeding 6.5%. Total consideration paid to Blackstone will be $3.5 billion, comprising $1.2 billion in cash and $2.3 billion in Digital Realty shares based on the June 29, 2026 closing price.

The portfolio comprises three hyperscale facilities—two in Manassas and one on the Digital Dulles campus in Sterling—each containing 96 megawatts of IT capacity, for a combined total of 288 megawatts. All assets are 100% leased to three distinct investment-grade hyperscale customers under 15-year terms featuring blended 3.6% annual rent escalators and an average AA- customer credit rating. Two data centers are expected to stabilize in the first half of 2027, with the third anticipated to stabilize in the first half of 2028.

"We have developed a strong partnership with Blackstone through the successful ongoing development of these assets," 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."

Mike Forman, Global Head of Digital Infrastructure for Blackstone Real Estate, and Greg Blank, Global Head of Digital Infrastructure for Blackstone Infrastructure, stated: "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."

Management expects the Blackstone acquisition to be leverage neutral and accretive to Core FFO per share in both 2027 and 2028 as development completes and rents commence. "This transaction is expected to be accretive to Core FFO per share in each of 2027 and 2028," said Matt Mercier, Chief Financial Officer. "We also expect it to be accretive to contractual organic rent growth and portfolio quality, given long term leases with premier hyperscale customers in newly constructed assets in the largest and most sought-after data center market."

Digital Realty is simultaneously pursuing complementary growth initiatives, including the purchase of approximately 1,440 acres near Kansas City for development at a cost of $377.6 million plus 517,475 operating partnership units, and an agreement to increase its Teraco joint venture stake to 77% through the issuance of 3,425,031 shares. To fund these initiatives and repay revolving credit borrowings, the company raised approximately $1.2 billion in equity through the sale of 6,158,839 common shares under its at-the-market offering program.