Digital Realty is buying out Blackstone’s majority stake in a trio of Northern Virginia data centers totaling 288 megawatts of capacity that the two firms developed through a joint venture.
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The $3.5B cash-and-stock deal, expected to close Tuesday, will see Digital Realty acquire Blackstone’s 80% share of two 96 MW data centers in Manassas and 50% share of a 96 MW data center in Sterling. The facilities are fully leased to three different investment-grade tenants.
Work is ongoing at all three data centers, with two of the facilities expected to be fully operational in early 2027 and one expected at full capacity in 2028.
The firms say the three data centers have a combined value of $7.8B, including debt and planned capital expenditures to complete the ongoing development. Payment to Blackstone will come in the form of $1.2B in cash and $2.3B in Digital Realty stock.
Digital Realty’s acquisition will see the REIT take full control of facilities built through its 2023 joint venture with Blackstone to develop hyperscale data centers in Virginia, France and Germany. The terms of the $7B partnership gave Blackstone majority stakes in the data centers, with Digital Realty responsible for construction and operations.
“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,” Digital Realty Chief Investment Officer Greg Wright said in a statement announcing the deal.
Digital Realty, the world’s largest data center provider with more than 300 facilities globally, has frequently used development joint ventures to expand the firm’s hyperscale portfolio.
Just before completing its 2023 deal with Blackstone, Digital Realty announced a similar partnership with REIT Realty Income to complete a pair of data centers in Northern Virginia.
Realty Income invested $200M to acquire an 80% interest in two preleased facilities, which total 48 MW of capacity. Digital Realty also partnered with Mitsubishi Corp. to develop a pair of Dallas data centers in 2023.
