Digital Realty just wrote a $3.5 billion check for three Northern Virginia data centers — and Blackstone walked out the same week it sold $2.3 billion of DLR stock. This is The Data Center Daily. Today: who's actually bullish on Digital Realty, and what $27 million a megawatt buys you in the market where the zoning fights are loudest. Here's Shane Snider at Data Center Knowledge:
Digital Realty has agreed to buy back the ownership interests of Blackstone-managed funds in three fully leased Northern Virginia data centers for $3.5 billion, a cash-and-stock transaction that would give it 100% control of facilities totaling 288 MW of IT capacity.
The headline number held: $3.5 billion in cash and stock for three fully leased Northern Virginia centers — two in Manassas, one in Sterling — 288 MW total. At full ownership, Data Center Knowledge marks the assets around $7.8 billion. So DLR just paid up to own the exact geography we've spent all week watching people fight over. With every water hold, every zoning brawl in Loudoun and Prince William — the answer was: buy the stuff that already cleared it all. Data Center Knowledge frames it as Blackstone tilting toward 'higher-return investments.' I'd push on that: they turned illiquid JV equity into liquid DLR stock, then sold it. That looks more like a liquidity preference dressed up as a returns story. Right. And these three are fully leased — 288 megawatts already energized. DLR's paying a premium to skip the lease-up risk and the interconnection queue entirely. What I still want on the record: who the tenants are. Fully leased is what's holding up the price — but are we talking hyperscaler paper with renewal options, or vanilla colo terms? The 8-K doesn't say. InsiderFinance writes:
The portfolio includes three fully leased data centers totaling 288 megawatts (MW) of IT capacity: two 96 MW buildings at the Digital Carver Brickyard campus in Manassas and one 96 MW facility at the Digital Carver Dulles 9 campus in Sterling. Digital Realty will acquire Blackstone’s 80% interest in the two Manassas centers and a 50% interest in the Sterling site, a blended 64% equity stake.
Alright, put the pieces together. It's 288 megawatts across three centers, a $7.8 billion portfolio value, and DLR is paying $3.5 billion for Blackstone's slice. That same week, Blackstone prices a 12.3 million-share secondary at $185. They're out the JV door and out the equity door at the same time. The secondary raised about $2.346 billion, and InsiderFinance says it could pressure shares near term. Now the timing is pretty clear: Blackstone turned illiquid JV equity into DLR stock, then sold it. I'd read that as liquidity, not a verdict on returns. Two 96 MW buildings at Carver Brickyard in Manassas, one at Carver Dulles 9 in Sterling — all Northern Virginia. So DLR just doubled down on the market where all those water holds and zoning fights we've been counting are clustered: Loudoun and Prince William. The Pennsylvania authority put a gallon number on paper; this 8-K gives you zero. Fully leased, though — that's what holds up the price. 288 MW at $27 million a megawatt only pencils because the tenants are already in the building. The one thing nobody's disclosing is who those tenants are, and whether it's hyperscaler paper with renewal options or vanilla colo. Right, and that pretty much sums up the week. Three days of constraint stories — water, ballot bans, ratepayer costs — and the market's answer is to pay whatever it takes to own capacity that's already cleared all of it. Premium for done. Concentration risk included. If The Data Center Daily helps you stay ahead, take a moment to subscribe and leave a quick review wherever you’re listening. It really helps other people find the show.
You’ll find links to every story we covered today in the show notes, so if one caught your ear, you can dig in a little further there.
That’s The Data Center Daily for today. This is a Lantern Podcast.