Digital Realty Trust closed its acquisition of Blackstone's remaining equity stakes in two Northern Virginia data center portfolios for $3.5 billion, valuing the underlying assets at $7.8 billion enterprise value. The transaction transfers control of 290 megawatts of developed hyperscale capacity across the Ashburn and Sterling submarkets, consolidating ownership in what had been a three-year joint venture structure initiated in late 2021.

Blackstone originally acquired a 55 percent stake in the Virginia assets through its Real Estate Partners X vehicle, alongside Digital Realty's retained 45 percent operating interest. The current purchase absorbs Blackstone's equity at a price implying a 13.2x trailing EBITDA multiple, according to the enterprise valuation disclosed. Digital Realty financed the acquisition through a combination of $2.1 billion in term debt priced at SOFR plus 165 basis points and $1.4 billion in forward equity commitments structured to settle over the next eighteen months. The company has separately committed to divesting $1.8 billion in non-core European colocation assets by the fourth quarter to offset balance sheet expansion.

The deal matters because it marks the first meaningful consolidation move in Northern Virginia since the AI training wave began reshaping power allocation priorities. Digital Realty now controls 1.1 gigawatts of total capacity in the Ashburn-Sterling corridor, including 340 megawatts of pre-leased inventory under hyperscale contracts with average remaining terms of 8.4 years. Dominion Energy's constrained substation capacity in Loudoun County has created a secondary market for portfolios with locked power allocations, and this acquisition effectively removes competitive supply from a market where unleased, powered shells are trading at premiums exceeding 40 percent above replacement cost. Blackstone's exit crystallizes a 28 percent IRR on its 2021 entry, reflecting both contractual rent escalations and the widening bid-ask spread for powered inventory.

Operators should monitor Digital Realty's execution on its European divestiture program and whether the $1.8 billion target compresses pricing on secondary colocation assets in Frankfurt and Amsterdam, where several family offices have been accumulating exposure. The company's forward equity structure also creates a known source of supply pressure through mid-2026, though management has indicated willingness to accelerate settlement if the share price exceeds $172 by the second quarter. Separately, watch for Dominion's October filings on substation upgrade timelines in Loudoun County; any slippage beyond the current Q3 2026 estimate will further tighten the supply-demand imbalance and likely push lease rates on remaining inventory above $200 per kilowatt for the first time.

Digital Realty's Chief Financial Officer noted the transaction brings the company's Northern Virginia ownership to "strategic scale" without additional commentary on future M&A appetite. Blackstone declined to specify redeployment plans for the proceeds.