Digital Realty Trust Inc (NYSE:DLR) shares declined 2.4% in after-hours trading Monday after Blackstone Inc announced a $2.35 billion secondary offering of Digital Realty stock.
The stock to be sold in the offering is non-voting common stock that will be issued to Blackstone affiliates when Digital Realty closes its previously announced acquisition of Blackstone’s interests in the Digital Carver Dulles 9 and Digital Carver Brickyard joint ventures. That acquisition is expected to close on June 30, 2026.
Digital Realty stated it is not offering any shares in the secondary sale and will not receive any proceeds from the transaction. Morgan Stanley has been named the sole underwriter for the public offering.
In a related but separate agreement, Digital Realty has agreed to buy Blackstone’s blended equity stakes in three fully leased data centers located in Northern Virginia. The three facilities together provide 288 megawatts of total IT capacity and the gross value of the transaction is stated at $7.8 billion. Digital Realty said the deal reflects an expected initial stabilized capitalization rate of over 6.5%.
Total consideration to Blackstone for its blended 64% equity interest in the portfolio will be $3.5 billion. That consideration will consist of $1.2 billion in cash plus $2.3 billion in Digital Realty shares.
The portfolio includes two data centers in Manassas and one facility on the Digital Dulles campus in Sterling. Each of the three assets has 96 megawatts of IT capacity and are reported to be 100% leased to three investment grade hyperscale customers.
Digital Realty Chief Financial Officer Matt Mercier said the transaction is expected to be accretive to Core FFO per share in 2027 and 2028, as development is completed and rents commence. The assets are covered by 15-year leases with a blended average AA- customer credit rating and include 3.6% annual rent escalators, the company said.
The announcements link several elements: a large-scale asset purchase, share consideration issued to Blackstone, and a separate public secondary offering of non-voting shares tied to the closing of the acquisition. Market reaction in after-hours trading showed a decline in Digital Realty shares following the secondary offering disclosure.
This series of transactions will result in Blackstone receiving a mix of cash and Digital Realty equity for its 64% interest in the Northern Virginia portfolio, while the public offering of non-voting shares is being managed by Morgan Stanley as sole underwriter. The acquisition closing date remains projected as June 30, 2026.