Blackstone's data center assets amount to $150 billion, and it has identified an additional $160 billion in potential opportunities. Yet it is selling stakes in three Northern Virginia data centers to Digital Realty.
Blackstone affiliates are already selling those shares at a discount of up to 2.9% from Digital Realty's Monday closing price of $190.58.
The sale is expected to be completed Tuesday.
The transaction involves three data centers with a total of 288 megawatts of capacity, reflecting the massive scale of modern AI infrastructure. Blackstone's decision to sell at a slight discount underscores the market's appetite for such assets.
Get your free investing masterclass bonus when you join Market Briefs, our free daily newsletter
Blackstone has been on a buying spree. The firm previously purchased QTS in 2021 and Australian provider AirTrunk in 2024. It also launched an IPO in May for its data center acquisition vehicle, Blackstone Digital Infrastructure Trust Inc.
Northern Virginia is the hottest market for data centers. A planned corridor called the Digital Gateway will cover 2,100 acres and could hold up to 37 data-center buildings. The demand is driven by AI, which requires huge amounts of computing power.
Not everyone is happy about the growth. A data center effort in Virginia backed by Brookfield Asset Management and run by Compass Datacenters was recently dropped after local pushback. And Blackstone-owned QTS is fighting in court to keep a similarly sized development in the state.
Digital Realty's chief investment officer, Greg Wright, stated in a press release, "We have developed a strong partnership with Blackstone." He added, "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."
Blackstone and Digital Realty have plans to keep cooperating on their other data-center holdings located in Northern Virginia, Paris, and Frankfurt. That means they are cashing out part of their position quickly.
The Digital Gateway corridor in Virginia could reshape the region if all 37 buildings go up. But court battles and local opposition may slow the pace. Blackstone's $1.3 trillion in total assets under management gives it the firepower to keep investing, even while it reshuffles some holdings. The joint venture structure allows both firms to share risk while capitalizing on the surging demand for AI infrastructure, a strategy that has become common among large asset managers and real estate investment trusts.
Subscribe to Market Briefs, our free daily newsletter, and claim your bonus investing masterclass