Digital Realty Acquires Blackstone's $3.58B Data Center JV Stake, Issues $2.35B in Stock

summarizeSummary

Digital Realty is acquiring Blackstone's interest in three Northern Virginia data centers for $3.58 billion, funded partly by issuing $2.35 billion in new stock, alongside raising an additional $1.2 billion through its ATM program.

check_boxKey Events · M&A and Partnerships · DLR

• Acquires Blackstone's Joint Venture Interests

  Digital Realty agreed to purchase Blackstone's blended 64% interests in two joint ventures for $3.577 billion ($1.231 billion cash, $2.346 billion in non-voting common stock). This makes the joint ventures wholly-owned, adding three hyperscale data centers in Northern Virginia (288 MW capacity) with 15-year leases.

• Significant Equity Issuance

  As part of the Blackstone acquisition, Digital Realty will issue $2.346 billion in non-voting common stock. This stock will convert to common stock upon transfer, leading to substantial dilution, as confirmed by a concurrent secondary offering by Blackstone.

• Active At-The-Market (ATM) Program

  The company sold 6,158,839 shares under its ATM program from April 29 to June 29, 2026, generating approximately $1.2 billion in net proceeds. This follows the launch of a new $7.5 billion ATM program on May 4, 2026.

• Other Strategic Land and JV Acquisitions

  Digital Realty also acquired 1,440 acres of land near Kansas City for $377.6 million cash and units for future development, and increased its stake in the Teraco joint venture to 77% by issuing 3,425,031 shares.

auto_awesomeAnalysis · DLR · Real Estate & Construction

This filing details Digital Realty's aggressive capital deployment and financing strategy. The primary event is the acquisition of Blackstone's stake in three hyperscale data centers for $3.577 billion, significantly expanding its presence in the critical Northern Virginia market with fully-leased, high-quality assets expected to be accretive to FFO. However, a substantial portion of this acquisition ($2.346 billion) is financed through the issuance of new equity to Blackstone, which is being immediately offered for resale, leading to significant dilution. This is compounded by the ongoing, active use of the company's At-The-Market program, which raised an additional $1.2 billion in recent months. While these moves bolster Digital Realty's strategic growth and development pipeline, the considerable equity dilution represents a trade-off for existing shareholders.