Blackstone, Digital Realty Ink $7B JV for Data Centers
Digital Realty, a provider of data center solutions, has formed a joint venture with Blackstone to build four hyperscale data center campuses in key global areas such as Frankfurt, Paris, and Northern Virginia.
With an estimated cost of nearly $7 billion, Blackstone-affiliated funds specializing in infrastructure, real estate and tactical opportunities will invest $700 million in the project for an 80% ownership stake, while Digital Realty will retain the remaining 20% interest.
The proposed campuses will support the development of 10 data centers with a potential IT load capacity of roughly 500MW. The construction of facilities totaling 46MW is currently underway, with a third of that capacity already pre-leased to clients.
The remaining land capacity is in various pre-construction phases, anticipated to meet growing customer demand. It is projected that 20% of the total potential IT load capacity will be delivered by 2025, with the remaining expected in 2026 and beyond.
“Data centers are experiencing once-in-a-generation demand growth, driven by cloud adoption and the AI revolution. Digital infrastructure is one of our highest conviction investment themes as a firm, and this transaction with a trusted data center operator in Digital Realty is another example of how we are investing behind this trend,” said Blackstone president, COO Jon Gray.
The joint venture, scheduled to close in two stages during the first half of 2024, is subject to regulatory nods, other approvals and customary closing conditions.
Joe Palmisano is Editorial Director for Connect Money, where he brings nearly three decades experience of market insights as a financial journalist, analyst and senior portfolio manager for leading financial publications, advisory firms, and hedge funds.
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Before joining Connect Money, Joe was a financial journalist for the Wall Street Journal, regularly publishing feature stories and trend pieces on the foreign exchange, global fixed income and equity markets.
Joe parlayed his experience as a financial journalist into roles as a Senior Research Analyst and Portfolio Manager, writing daily and weekly market analysis and managing a FX and US equity portfolio.
Joe was also a contributing writer for industry magazines and publications, including SFO Magazine and the CMT Association.
Joe earned a B.S.B.A. in Finance from The American University. He holds the Chartered Market Technician (CMT) designation and is a member of the CFA Institute.