Digital Realty Announces Purchase of Blackstone Interest in Three Northern Virginia Data Centers

Rhea-AI Summary

Digital Realty (NYSE: DLR) agreed to buy Blackstone’s 64% equity interest in three fully leased Northern Virginia hyperscale data centers valued at $7.8 billion, totaling 288 MW of IT capacity. Total consideration is $3.5 billion, including $1.2 billion in cash and $2.3 billion in DLR shares.

The assets, in Manassas and Sterling, are 100% leased to three investment-grade hyperscale customers on 15-year contracts with 3.6% annual rent escalators. Two centers are expected to stabilize in 1H 2027 and the third in 1H 2028, and the deal is expected to be accretive to Core FFO per share in 2027 and 2028.

Positive

• Acquires 64% equity interest in $7.8 billion hyperscale data center portfolio
• Adds 288 MW of fully leased IT capacity in Northern Virginia
• Portfolio leased on 15-year contracts to AA- rated hyperscale customers
• 3.6% annual rent escalators support higher contractual organic rent growth
• Management expects Core FFO per share accretion in 2027 and 2028

Negative

• Issues $2.3 billion in new Digital Realty shares as deal consideration
• $1.2 billion cash component increases near-term funding requirements
• Two data centers only expected to stabilize in 1H 2027
• Third data center not expected to stabilize until 1H 2028
• Transaction includes assumed debt and remaining development capex obligations

News Market Reaction – DLR

-5.77% 3.0x vol

14 alerts

-5.77% Session close to close

$66.97B Market Cap

3.0x Rel. Volume

In the Jun 30 session, DLR declined 5.77%, reflecting a notable negative market reaction. Our momentum scanner triggered 14 alerts that day, indicating notable trading interest and price volatility. Trading volume was elevated at 3.0x the daily average, suggesting increased selling activity.

Data tracked by StockTitan Argus on the day of publication.

Market Context

The stock moved -5.8% in the session following this news. A negative reaction despite positive news ...

Analysis

The stock moved -5.8% in the session following this news. A negative reaction despite positive news fits a pattern where growth deals raise dilution and leverage concerns. The mix of $1.2B cash and $2.3B in shares plus future capex needs could dominate focus over long-term rent visibility.

Key Figures

Portfolio gross value: $7.8 billion Total IT capacity: 288 megawatts Initial cap rate: 6.5% +5 more

8 metrics

Portfolio gross value $7.8 billion Three Northern Virginia data centers at 100% share

Total IT capacity 288 megawatts Combined capacity of three Northern Virginia data centers

Initial cap rate 6.5% Expected initial stabilized capitalization rate (over 6.5%)

Total consideration to Blackstone $3.5 billion Payment for Blackstone’s blended 64% equity interest

Cash portion $1.2 billion Cash consideration paid to Blackstone

Equity portion $2.3 billion Consideration in Digital Realty shares based on June 29, 2026 price

Individual data center capacity 96 megawatts IT capacity for each of the three data centers

Annual rent escalators 3.6% Contractual increases on 15-year hyperscale leases

Historical Context

5 past events · Latest: Jun 22 (Positive)

Pattern 5 events

Date	Event	Sentiment	24h Move	Catalyst
Jun 22	Growth transactions	Positive	+3.5%	Announced $1.6B of transactions to expand hyperscale and private capital platform.
Jun 17	AI platform launch	Positive	-1.8%	Launched ServiceFabric MCP AI-native control layer across 800+ data centers.
May 27	Impact report	Positive	-0.1%	Published 2025 Impact Report highlighting renewable energy and efficiency progress.
May 18	New data center	Positive	-0.0%	Opened first Barcelona data center BCN1 targeting AI and cloud workloads.
May 12	Dividend declaration	Neutral	-1.0%	Declared regular quarterly cash dividends on common and preferred stock.

24h Move is the share-price change in the day after each event; other market factors may also have contributed.

Pattern Detected

Recent news often sees mixed or mildly negative next-day moves, with only larger strategic growth packages drawing a stronger positive reaction.

Key Terms

hyperscale, capitalization rate, investment grade, core ffo

4 terms

hyperscale technical

"three fully leased data centers containing 288 megawatts of total IT capacity in Northern Virginia at a gross value of $7.8 billion, reflecting an expected initial stabilized capitalization rate of over 6.5%."

Hyperscale describes the ability of a system or operation to grow rapidly and handle extremely large amounts of work or data. It’s like a massive factory that can quickly expand its production capacity to meet soaring demand. For investors, hyperscale indicates a business’s potential to scale efficiently, often leading to increased growth and profitability.

capitalization rate financial

"at a gross value of $7.8 billion, reflecting an expected initial stabilized capitalization rate of over 6.5%."

The capitalization rate is a percentage that helps investors estimate how much money a property or investment might generate relative to its value. It’s similar to a return rate, showing how quickly an investment could pay for itself over time. This rate helps compare different investments and assess their potential profitability.

investment grade financial

"that are 100% leased to three distinct investment grade hyperscale customers."

A credit rating label assigned to bonds or borrowers that signals relatively low risk of default; think of it as a strong health check for a company's or government's ability to repay debt. It matters to investors because investment-grade status typically means lower interest costs for the borrower, greater eligibility for conservative funds and pension portfolios, and generally more stable returns compared with higher-risk, non-investment-grade debt.

View in glossary

core ffo financial

"“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,”"

Core FFO (Core Funds From Operations) is a real estate industry measure of a property owner's recurring cash earnings calculated by starting with net income and removing non-cash accounting items and one-time gains or losses so the number reflects ongoing operating performance. Investors use it like a trimmed-down paycheck: it helps compare cash-generating ability across periods and companies by focusing on the stable, repeatable income rather than temporary or accounting-driven swings.

AI-generated analysis. How Rhea-AI works. Not financial advice.

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Increases Ownership in New, High-Quality, Fully-Leased Hyperscale Assets in Top U.S. Market

AUSTIN, Texas and NEW YORK, June 29, 2026 (GLOBE NEWSWIRE) -- Digital Realty (NYSE: DLR), the world’s largest cloud- and carrier-neutral data center platform, and Blackstone Inc. (NYSE: BX) today announced that Digital Realty has agreed to purchase from Blackstone-affiliated funds managed by Real Estate, Infrastructure and Tactical Opportunities (“Blackstone”) a stake in three fully leased data centers containing 288 megawatts of total IT capacity in Northern Virginia at a gross value of $7.8 billion, reflecting an expected initial stabilized capitalization rate of over 6.5%. Total consideration paid to Blackstone for their blended 64% equity interest in the assets will be $3.5 billion, including $1.2 billion of cash and $2.3 billion in shares of Digital Realty, based on the last reported sale price of the company’s common stock on the New York Stock Exchange on June 29, 2026. The portfolio comprises two data centers in Manassas and one on the Digital Dulles campus in Sterling, each with 96 megawatts of IT capacity, that are 100% leased to three distinct investment grade hyperscale customers. The purchase is expected to be completed on June 30, 2026, and is subject to customary closing conditions.

“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.”

Mike Forman, Global Head of Digital Infrastructure for Blackstone Real Estate and Greg Blank, Global Head of Digital Infrastructure for Blackstone Infrastructure, said: “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.”

Digital Realty agreed to purchase 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 for $7.8 billion, at 100% share, including assumed debt and remaining capex to complete the ongoing development. Two of the data centers are expected to stabilize in the first half of 2027, with the third anticipated to stabilize in the first half of 2028. Through this transaction, Digital Realty will increase its exposure to new capacity in the world’s largest data center market, supported by 15-year leases with a blended average AA- customer credit rating and 3.6% annual rent escalators, that are expected to enhance the Company’s growth and visibility.

“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,” said Matt Mercier, Chief Financial Officer of Digital Realty. “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.”

About Digital Realty
Digital Realty brings companies and data together by delivering the full spectrum of data center, colocation, and interconnection solutions. PlatformDIGITAL^®, the company’s global data center platform, provides customers with a secure data meeting place and a proven Pervasive Datacenter Architecture (PDx^®) solution methodology for powering innovation, from cloud and digital transformation to emerging technologies like artificial intelligence (AI), and efficiently managing Data Gravity challenges. Digital Realty gives customers access to the connected data communities that matter to them through a global footprint of 300+ facilities in 55+ metros across 30+ countries on six continents. To learn more, visit digitalrealty.com or follow us on LinkedIn and X.

About Blackstone
Blackstone is the world’s largest alternative asset manager. Blackstone seeks to deliver compelling returns for institutional and individual investors by strengthening the companies in which the firm invests. Blackstone’s over $1.3 trillion in assets under management include global investment strategies focused on real estate, private equity, credit, infrastructure, life sciences, growth equity, secondaries and hedge funds. Further information is available at www.blackstone.com. Follow @blackstone on LinkedIn, X (Twitter), and Instagram.

For Additional Information

Investor Relations
Jordan Sadler / Jim Huseby
Digital Realty
+1 737 281 0101
InvestorRelations@digitalrealty.com

Media Contact
Helen Bleasdale
Digital Realty
+1 737 267 6822
hcbleasdale@digitalrealty.com

Jeffrey Kauth
Blackstone
+1 212 583 5395
jeffrey.kauth@blackstone.com

Paula Chirhart
Blackstone
+1 646 583 6684
paula.chirhart@blackstone.com

Safe Harbor Statement

This press release contains forward-looking statements based on current expectations, forecasts, and assumptions that involve risks and uncertainties which may cause actual results to differ materially from those described. These include statements related to the Blackstone acquisition, completion of development and stabilization, expected benefits, and the company’s strategy. For a description of these risks and uncertainties, please refer to the company’s filings with the U.S. Securities and Exchange Commission. The company undertakes no obligation to update any forward-looking statements.

FAQ

What did Digital Realty (DLR) announce about buying Blackstone’s interest in Virginia data centers on June 29, 2026?

Digital Realty announced an agreement to buy Blackstone’s equity interest in three Northern Virginia hyperscale data centers. According to Digital Realty, the portfolio is valued at $7.8 billion and totals 288 megawatts of fully leased IT capacity across Manassas and Sterling locations.

How much is Digital Realty (DLR) paying Blackstone for the Northern Virginia data centers?

Digital Realty will pay Blackstone $3.5 billion for its 64% equity interest in the assets. According to Digital Realty, consideration includes $1.2 billion in cash and $2.3 billion in Digital Realty shares based on the June 29, 2026 NYSE closing price.

What are the lease terms for the Northern Virginia data centers acquired by Digital Realty (DLR)?

The three Northern Virginia data centers are 100% leased to three investment-grade hyperscale customers. According to Digital Realty, the leases have 15-year terms, a blended average AA- customer credit rating, and feature 3.6% annual contractual rent escalators supporting future revenue growth.

When will the new Digital Realty (DLR) data centers in Manassas and Sterling stabilize?

Two of the acquired data centers are expected to stabilize in the first half of 2027. According to Digital Realty, the third 96 megawatt data center in Sterling is anticipated to stabilize in the first half of 2028 as development and lease commencements progress.

How will the Blackstone data center acquisition affect Digital Realty’s (DLR) Core FFO per share?

Digital Realty expects the transaction to be accretive to Core FFO per share in 2027 and 2028. According to Digital Realty, accretion is anticipated as development is completed, leases commence, and 3.6% annual rent escalators enhance contractual organic rent growth.

What ownership stakes is Digital Realty (DLR) acquiring in the Manassas and Sterling data centers?

Digital Realty agreed to purchase Blackstone’s 80% interest in two 96 megawatt Manassas data centers and 50% interest in one 96 megawatt Sterling data center. According to Digital Realty, the $7.8 billion gross value includes assumed debt and remaining development capex.