Digital Realty $DLR falls 5%; Blackstone data-center stake costs $3.5B

Digital Realty $DLR fell 5% after announcing a $3.5B purchase of Blackstone’s interest in three Northern Virginia data centers. The price and the share reaction put the transaction above the skill’s M&A threshold: Blackstone and Digital Realty said the assets carry a gross value of $7.8B and 288 megawatts of total IT capacity.

The structure is specific. Digital Realty will buy Blackstone-affiliated funds’ blended 64% equity interest for $3.5B, made up of $1.2B in cash and $2.3B in Digital Realty shares based on the June 29 NYSE closing price. The portfolio includes two 96MW data centers in Manassas and one 96MW facility on the Digital Dulles campus in Sterling.

Occupancy is the strategic reason for the deal. The companies said the three facilities are 100% leased to three distinct investment-grade hyperscale customers. Northern Virginia remains the largest U.S. data-center market, so the transaction increases $DLR exposure to a market where AI and cloud demand have kept power, land, and capacity scarce.

The valuation signal is also clear. The press release described an expected initial stabilized capitalization rate of over 6.5%. That gives investors a direct measure for comparing the acquisition against Digital Realty’s cost of capital, current data-center private-market pricing, and the dilution from issuing $2.3B of stock.

The deal was expected to close on June 30, 2026, subject to customary conditions. The next numbers to watch are Digital Realty’s leverage metrics, any updated funds-from-operations guidance, and whether hyperscale leasing economics support the 6.5% stabilized cap-rate assumption after the transaction closes.