Blackstone Plots Debut Of Data Center REIT
Blackstone is planning to bring its data center investment business directly to retail investors.
The corporate behemoth registered Blackstone Digital Infrastructure Trust Inc. with the Securities and Exchange Commission on Friday as it prepares an initial public offering for the investment vehicle. The fund, which is set to trade under the ticker BXDC, will target stabilized, newly constructed data centers.
The IPO could raise $2B to purchase data centers, and Blackstone has approached sovereign wealth funds and other institutions for the initial investment, Bloomberg reported. The outlet first reported in February that Blackstone was exploring a public data center fund that ultimately aims to raise tens of billions of dollars from large corporate and retail investors alike.
Blackstone submitted a Form S-11, required for a REIT IPO, to the SEC on Friday. The company said in a statement Monday that an IPO was contingent on other conditions and may never commence. The number and pricing of shares have yet to be determined.
Goldman Sachs, Citigroup, Morgan Stanley, Barclays, Bank of America, Deutsche Bank, J.P. Morgan, RBC Capital Markets and Wells Fargo Securities are jointly leading the bookrunning operations for the offering.
Blackstone filed paperwork confidentially with U.S. regulators for the potential IPO earlier this year after gauging investor interest in a vehicle that would offer direct exposure to the artificial intelligence boom, Bloomberg reported.
Public data center REITs have continued to pull in cash from investors looking for AI exposure despite rumblings of a bubble forming in the sector. Shares in two of the largest data center REITs, Equinix and Digital Realty, are up 30% in the past year, compared to the 10% return of the FTSE NAREIT All Equity REITS index over the same period.
Shares in Blackstone were up more than 2% in early trading Monday, but its stock has shed roughly a quarter of its value since the start of the year as some investors grow wary of the high levels of corporate debt that AI firms are taking from institutional lenders to finance the technology’s mass adoption.
Blackstone and its related funds have already been pouring billions of dollars into data centers, including a 2021 deal to take QTS Realty Trust private at a $10B valuation before paying $3B in 2025 to QTS founder and then-CEO Chad Williams to buy out his stake and gain more operational control.
Blackstone Global Head of Real Estate Nadeem Meghji said at a Miami conference last month that the firm continues to see the data center space as a major growth sector globally.
“It's a really global business for us in strategy, and we think we're still in the early innings of that build-out and couldn’t be more excited about the opportunity ahead there,” Meghji said.
