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Digital Realty paid **22x EBITDA** to consolidate Northern Virginia capacity, preserving **$2.1B** in credit lines while Blackstone exits at a structural premium.
$3.5 billion
purchase of Blackstone's 64 percent equity interest in three…
$1.2 billion
in cash and
$2.3 billion
in common shares
470 megawatts
of critical IT load capacity to its consolidated balance…
Digital Realty closed a $3.5 billion purchase of Blackstone's 64 percent equity interest in three Northern Virginia data centers, settling $1.2 billion in cash and $2.3 billion in common shares. The transaction converts a joint venture structure into full ownership for the REIT at a moment when Northern Virginia real estate trades at record multiples.
Blackstone had held the controlling interest since the facilities were developed jointly. Digital Realty now owns the assets outright, adding approximately 470 megawatts of critical IT load capacity to its consolidated balance sheet. The structures sit in Ashburn and Sterling, the corridor that handles roughly 70 percent of global internet traffic and has become the primary landing zone for hyperscale AI training clusters. No debt was assumed in the transaction.
The $2.3 billion equity component matters more than the headline. Digital Realty issued new shares rather than drawing revolving credit, preserving $2.1 billion in available liquidity on its existing facilities. That dry powder remains deployable while the company integrates three assets it already operated under the JV. The cash portion came from balance sheet reserves, not a term loan, which means no covenant renegotiation and no maturity wall extension. Blackstone exits at a blended multiple near 22x trailing EBITDA, roughly 3.5 turns above where similar Northern Virginia portfolios traded eighteen months ago. The premium reflects two realities: physical constraint and power certainty. Dominion Energy has begun rationing new interconnection agreements in Loudoun County, and these three facilities hold legacy power contracts with no renegotiation clause until 2029. Any buyer pricing in AI compute expansion over the next four years paid for certainty, not square footage.
Digital Realty's share issuance dilutes existing holders by approximately 4.1 percent at current float, but the REIT gains revenue-generating assets with contracted tenants and no lease-up risk. Two of the three buildings operate at 96 percent occupancy under long-term hyperscale contracts; the third is 88 percent leased to enterprise clients with average remaining terms above six years. The company will consolidate roughly $340 million in annual NOI that was previously split with Blackstone, improving its FFO per share by an estimated $0.18 in the first twelve months post-close.
Allocators should track three follow-on signals. First, whether Digital Realty redeploys the $2.1 billion in untapped credit lines into new development or uses it to buy out minority stakes in other JVs—it operates nine additional partnerships with institutional capital, mostly in Europe and Asia-Pacific. Second, Dominion Energy's next interconnection queue publication, expected late April, will show how many megawatts remain available in Loudoun and Prince William counties. Third, Blackstone's redeployment of the $3.5 billion in proceeds—if it rotates into new data center development outside Northern Virginia, that signals the firm believes the next premium is in secondary markets like Phoenix or Dallas, where power is still negotiable.
Digital Realty filed an 8-K disclosing the transaction and updated its 2025 FFO guidance to reflect the consolidated assets. Blackstone has not announced a replacement allocation.
Branded by POPS4 · proof in 60 seconds
For the principal
If your office holds data center exposure through REITs, note the 4.1% dilution but improved FFO trajectory—consolidation trades often reprice within two quarters.
For the operator
Watch Blackstone's next move with $3.5B in proceeds—rotation into secondary markets signals belief that Northern Virginia premiums have peaked near 22x.
For the house
We are holding Digital Realty in three managed accounts; no action yet, but we flag the $2.1B liquidity for potential follow-on acquisitions in EMEA JVs.
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