Northern Virginia is where the internet physically lives, and a large piece of it just changed hands.
Digital Realty has agreed to buy Blackstone’s majority stake in three fully leased data centres in the region, in a transaction that values the assets at $7.8 billion.
It is the kind of number that has become routine in a sector where AI demand has turned warehouses full of servers into some of the most contested real estate in the country.
The mechanics are specific. Digital Realty is paying $3.5 billion for Blackstone-managed funds’ blended 64% equity interest in the portfolio, split between $1.2 billion of cash and $2.3 billion in Digital Realty shares.
Paying for two-thirds of the equity in stock rather than cash tells you something about both the price of capital and Blackstone’s willingness to stay invested in the upside, this time through the buyer rather than the buildings.
