Digital Realty falls 5% after taking $3.5 billion stake in Blackstone's Virginia data centers
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- Digital Realty fell roughly 5.4% in premarket trading Monday on news it will pay $3.5 billion ($1.2B cash plus $2.3B in shares) for Blackstone's 80% interest in two 96MW Manassas data centers and 50% interest in one 96MW Sterling data center, with the portfolio valued at $7.8B.
- Greg Wright, Digital Realty's chief investment officer, called the transaction the next phase of its Blackstone partnership and a way to deepen ownership of "fully leased, high-quality hyperscale assets."
- The two Manassas facilities are slated to stabilize in H1 2027, with the Sterling facility following in H1 2028; the deal is expected to close Tuesday.
- Despite Monday's premarket slide, Digital Realty shares remain up 23% year-to-date.
- Northern Virginia remains the world's largest data center market, though a February JLL report found Texas closing in on its lead.
- JLL also reported 92% of North American data center capacity currently under construction is pre-committed, pointing to tight vacancy through at least 2030.
- Per Preqin data, hyperscaler AI infrastructure buildouts are increasingly financed by private equity, private credit, and debt, with deals consistently clearing $10 billion last year as Amazon, Microsoft, Meta, and Google commit to roughly $700 billion in combined capex this year.
Why it matters: Digital Realty is paying a premium in stock to consolidate control of fully leased Virginia hyperscale capacity just as the market shows near-zero vacancy risk through 2030, and peers like Amazon, Microsoft, Meta, and Google are channeling an estimated $700 billion in 2025 capex into the same constrained geography — meaning incumbents with prime Virginia land now hold the scarce input.
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