Digital Realty and Blackstone announced that Digital Realty agreed to buy Blackstone-affiliated funds’ interest in three fully leased data centers in Northern Virginia.
The transaction values the portfolio at $7.8 billion on a gross basis and reflects an expected initial stabilized capitalization rate of more than 6.5%. The total consideration paid to Blackstone for its blended 64% equity interest will be $3.5 billion, including $1.2 billion in cash and $2.3 billion in Digital Realty shares, based on Digital Realty’s last reported common stock sale price on the New York Stock Exchange on June 29, 2026.
The portfolio includes two data centers in Manassas, Virginia, and one data center on Digital Realty’s Digital Dulles campus in Sterling, Virginia. Each facility has 96 megawatts of IT capacity, bringing the total portfolio to 288 megawatts. The assets are 100% leased to three distinct investment-grade hyperscale customers.
Digital Realty is buying Blackstone’s 80% interest in the two Manassas data centers and its 50% interest in the Sterling data center. The $7.8 billion gross value includes assumed debt and remaining capital expenditures needed to complete ongoing development.
The purchase is expected to be completed on June 30, 2026, subject to customary closing conditions. Two of the data centers are expected to stabilize in the first half of 2027, and the third is expected to stabilize in the first half of 2028.
The deal increases Digital Realty’s ownership in a high-quality hyperscale data center portfolio in Northern Virginia, which is the largest data center market in the world. The leases have 15-year terms, a blended average AA- customer credit rating, and 3.6% annual rent escalators.
Digital Realty said the transaction is expected to strengthen its growth visibility and support the continued expansion of its strategic private capital platform. The company also expects the purchase to be accretive to Core FFO per share in 2027 and 2028 as development is completed and rents begin.
Digital Realty and Blackstone formed their data center joint venture in 2023. The companies continue to work together on remaining data center investments in Northern Virginia, Paris, and Frankfurt.
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“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. 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.”
Greg Wright, Chief Investment Officer of Digital Realty
“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.”
Mike Forman, Global Head of Digital Infrastructure for Blackstone Real Estate, and Greg Blank, Global Head of Digital Infrastructure for Blackstone Infrastructure
“This transaction is expected to be accretive to Core FFO per share in each of 2027 and 2028, as development is completed and rents commence. 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. We believe that our execution to date and the recently announced strategic transactions, position Digital Realty to extend its growth trajectory.”
Matt Mercier, Chief Financial Officer of Digital Realty
