AUSTIN: Shares of Digital Realty slid more than 5% in premarket trading Monday after the global data center giant revealed it is acquiring a $3.5 billion stake in three hyperscale facilities from asset manager Blackstone, in a deal that underscores surging demand for AI-driven infrastructure.
The Austin-based firm said it will pay $1.2 billion in cash and $2.3 billion in stock for the assets, which are valued at a total of $7.8 billion. The transaction, expected to close on Tuesday, gives Digital Realty full control over Blackstone’s interests in two 96-megawatt data centers in Manassas, Virginia, and a 50% stake in a third 96-megawatt facility in Sterling, Virginia.
Stock Reaction and Year-to-Date Performance
The company’s shares were last seen trading down 5.4% before the opening bell, erasing some of its recent gains. Despite the dip, Digital Realty stock remains up 23% year-to-date, reflecting strong investor appetite for data center plays amid the artificial intelligence boom.
Phased Stabilization Timeline
Digital Realty expects the first two Virginia facilities to reach stabilization in the first half of 2027, with the third following by the first half of 2028—a timeline that aligns with long-term lease commitments from major hyperscale tenants.
Strategic Expansion in the World’s Largest Data Center Market
The move deepens Digital Realty’s foothold in Northern Virginia, long regarded as the planet’s premier data center hub. Greg Wright, the company’s chief investment officer, framed the acquisition as “the next phase” of its partnership with Blackstone, adding that it allows Digital Realty to boost ownership of a “fully leased, high-quality hyperscale portfolio” that strengthens its growth runway and private capital platform.
Virginia’s Crown Faces Texas Challenge
While Virginia continues to dominate, a February report from real estate firm JLL noted that Texas is closing the gap, threatening to unseat the commonwealth as the top data center market. Still, Northern Virginia remains the epicenter of hyperscale development, with vacancy rates expected to stay tight.
Supply Squeeze and Hyperscaler Capex
According to JLL, 92% of data center capacity currently under construction in North America is already pre-committed, signaling that vacancy will likely remain near record lows through at least 2030. The spending spree is fueled by the “Big Four” hyperscalers—Amazon, Microsoft, Meta, and Google—which have collectively pledged nearly $700 billion in capital expenditures this year for AI infrastructure.
Private Capital Floods In
As big tech ramps up its AI buildout, it is increasingly turning to private equity, private credit, and debt financing to fund these mega-projects. Preqin data shows that deals in the sector consistently exceeded $10 billion last year, a trend that shows no signs of slowing as the industry races to meet explosive demand for compute and storage.
