Digital Realty Buys $3.5 Billion in Blackstone Data Centers

This article first appeared on GuruFocus.

Digital Realty Trust (NYSE:DLR) fell 5.29% in premarket after Blackstone (NYSE:BX) agreed to sell its stakes in three Northern Virginia data centers to Digital Realty for $3.5 billion. Digital Realty will pay $1.2 billion in cash and $2.3 billion in its own shares for Blackstone's 80% interest in two 96-megawatt data centers in Manassas, Virginia, and a 50% interest in a 96-megawatt center in nearby Sterling. Blackstone shares were unchanged.

Blackstone affiliates have already started selling the Digital Realty stock they're set to receive, offering it at up to a 2.9% discount to Monday's closing price of $190.58. The transaction is expected to close Tuesday.

The assets were part of a joint venture Blackstone and Digital Realty formed in 2023 as both companies positioned for the AI infrastructure buildout. The two firms will keep working together on remaining data center investments elsewhere in Northern Virginia, plus sites in Paris and Frankfurt. Digital Realty Chief Investment Officer Greg Wright said the deal builds on the partnership and increases the company's ownership in a fully leased, high-quality hyperscale portfolio.

Blackstone manages more than $1.3 trillion and calls itself the largest global provider of data centers, with more than $150 billion in data center assets and another $160 billion identified for its pipeline. The firm acquired QTS in 2021 and AirTrunk in 2024, and took its data center investment vehicle, Blackstone Digital Infrastructure Trust (NYSE:BXDC), public in May.

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