Digital Realty to buy Blackstone data center stakes for $3.5B

Digital Realty agreed to buy Blackstone's stake in three fully leased Virginia data centers for about $3.5 billion in cash and stock, the company said. The transaction covers 288 megawatts of capacity and offers a capitalization rate above 6.5%.

The three facilities are in Northern Virginia, the largest data center market in the U.S. They are fully leased, a sign of sustained demand from cloud providers and AI tenants. Digital Realty said it financed the purchase with cash and its own equity. The seller is funds affiliated with Blackstone.

Digital Realty's Alpha Score stands at 55/100, a Moderate label, placing it in the Real Estate sector. The score reflects a balanced risk-return profile for the stock.

The deal strengthens Digital Realty's portfolio in a market where vacancy rates remain low. The cap rate of more than 6.5% gives the acquisition a yield that many alternative investments in commercial real estate do not offer, Digital Realty said. The company did not specify when the transaction would close.