Digital Realty revealed it is purchasing ownership interests in three data centers from Blackstone for $3.5 billion. The stock fell 5.4% the next day.
Digital Realty will pay $1.2 billion in cash and $2.3 billion in its own shares to Blackstone. That gives it ownership in three data centers worth a combined $7.8 billion. Blackstone held an 80% stake in two of the centers and a 50% stake in the third. Digital Realty is buying those out.
Greg Wright, Digital Realty's chief investment officer, said the centers are "fully leased, high-quality hyperscale assets." The three centers have a power capacity of 96 megawatts each.
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The deal is expected to close the day after the announcement. The first two centers, both in Manassas, Virginia, should reach stable operation in the first half of 2027. The third, in Sterling, Virginia, should be ready by the first half of 2028.
The timing of the deal lines up with a huge boom in data center construction. Real estate firm JLL reports that 92% of the data center capacity currently under construction in North America has already been pre-leased. That means almost all new space is spoken for before it is even built.
Vacancy rates are expected to stay very low through at least 2030. In 2025, data center deal value hit a record $61 billion. Digital Realty's purchase is part of that wave.
Digital Realty, one of the largest global data center REITs, has been aggressively expanding its hyperscale portfolio to meet surging demand from cloud providers and AI workloads. The three Virginia facilities are in a key northern Virginia market, the world's largest data center hub. Acquiring fully leased assets gives the company immediate revenue streams while avoiding construction risks. The stock's decline may reflect investor concern over the equity dilution from the $2.3 billion share issuance, even though the deal strengthens Digital Realty's position in a supply-constrained market.
Northern Virginia has long been the dominant data center corridor in the U.S., thanks to its proximity to fiber networks, low power costs, and tax incentives. Digital Realty already owns multiple facilities there, and adding these fully leased hyperscale assets deepens its foothold in a region where vacancy rates hover near zero. The acquisition also aligns with the company's strategy of focusing on build-to-suit and previously leased developments, reducing the risk of speculative construction in an already tight market.
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