Digital Realty has expanded its exposure to the hyperscale data center sector by acquiring an ownership interest in three facilities in Virginia from Blackstone-affiliated funds. The transaction, focused on hyperscale assets in Northern Virginia, advances the relationship between the two firms around large-scale digital infrastructure.
The purchase price for the ownership interest is approximately $3,500,000,000. The total consideration is structured as $1,200,000,000 in cash and $2,300,000,000 in Digital Realty shares. The data center portfolio is valued at a gross figure of $7,800,000,000, and the parties indicate an expected initial stabilized capitalization rate of more than 6.5 percent.
The three Virginia assets are described as fully leased, high-quality hyperscale data centers. While specific address, size, and tenant information were not disclosed, the properties are positioned as part of a broader platform intended to support ongoing demand for large-scale computing and cloud infrastructure capacity in Northern Virginia.
These assets were originally included in a $7,000,000,000 joint venture formed by Digital Realty and Blackstone in late 2023. That venture was created to develop a portfolio of 10 hyperscale data centers across three key markets: Northern Virginia, Frankfurt, and Paris. The latest transaction represents a follow-on step to that initial partnership structure, shifting additional ownership in part of the venture’s Virginia portfolio to Digital Realty.
Digital Realty Chief Investment Officer Greg Wright characterized the deal as the next phase in the firm’s collaboration with Blackstone. According to Wright, increasing Digital Realty’s stake in this fully leased hyperscale portfolio extends the company’s runway for growth and enhances the pipeline of product available for its strategic private capital platform.
The transaction underscores the ongoing role of global alternative asset managers and listed data center platforms in capitalizing and scaling hyperscale infrastructure. By using a mix of cash and stock consideration and explicitly highlighting a stabilized cap rate expectation, the parties provide insight into pricing and return parameters currently being applied to fully leased hyperscale data centers in Northern Virginia.
Further details regarding the specific properties, remaining ownership interests, and any associated financing arrangements were not disclosed in the announcement.
