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Blackstone and Digital Realty announced a joint venture on December 7, 2023, to develop four hyperscale data-center campuses in Frankfurt, Paris and Northern Virginia. The plan estimates approximately $7 billion in development spending over several years for 10 data centers and about 500 megawatts (MW) of potential IT-load capacity.

What the venture includes

The venture combines Blackstone-affiliated investment funds with Digital Realty’s data-center development and operating platform. Its portfolio is planned as four campuses containing 10 data centers across three major European and North American markets:

  • Frankfurt, Germany
  • Paris, France
  • Northern Virginia, United States

The announcement did not state how many campuses would be located in each market. The approximately $7 billion figure is an estimated development cost spread over several years, not a claim that this amount had already been spent.

Capacity and construction status at announcement

The 10 planned facilities represent approximately 500 MW of potential IT-load capacity. IT load is the electricity available to customers’ computing equipment, rather than the total power consumed by cooling, electrical distribution and other building systems.

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Measure Announcement figure Qualification
Planned data centers 10 Across four campuses
Potential IT-load capacity Approximately 500 MW Planned potential, not confirmed operating capacity
Capacity under construction 46 MW Status reported on December 7, 2023
Pre-leased capacity 33% Share reported at announcement
Estimated development cost Approximately $7 billion Expected over several years

Because these were announcement-stage figures, they do not establish the venture’s eventual completion, leasing level or currently operating capacity.

Who owns and operates the venture?

Partner Ownership Capital and responsibilities
Blackstone-affiliated funds 80% Approximately $700 million of initial capital contributions; funds came from Blackstone’s Infrastructure, Real Estate and Tactical Opportunities businesses
Digital Realty 20% Manages development and day-to-day operations and receives customary fees

Blackstone’s initial contribution is not the same as its eventual share of the full development cost. The project is expected to require additional funding as individual facilities are built.

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Why Blackstone and Digital Realty formed it

Digital Realty supplies a development pipeline, land, customer relationships and operating expertise. Bringing in private capital allows the company to fund and monetize a large portion of its land bank while retaining a minority ownership position and operating role.

Digital Realty said the partnership could help monetize nearly 20% of its land bank and diversify its sources of funding. Blackstone framed the investment around long-term growth in cloud computing and artificial-intelligence workloads. Blackstone President and Chief Operating Officer Jon Gray described data centers as experiencing “once-in-a-generation demand growth, driven by cloud adoption and the AI revolution.”

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When were the campuses expected to be delivered?

The announcement projected that about 20% of the venture’s total potential IT-load capacity would be delivered through 2025. The remaining capacity was expected in 2026 and beyond. That is a development timetable, not a guarantee that every facility would enter service on those dates.

The joint venture was scheduled to close in two stages during the first half of 2024, subject to regulatory approvals and other customary conditions. The announcement itself therefore cannot confirm the final closing date or subsequent construction progress.

What the $7 billion headline does—and does not—mean

  • It means: the partners estimated that developing the four-campus, 10-building portfolio could require approximately $7 billion over several years.
  • It does not mean: $7 billion had already been invested, that all 500 MW was contracted, or that all facilities were complete.
  • The 500 MW figure means: potential customer IT capacity in the planned portfolio, not a measured output from operating sites.
  • The 33% pre-leasing figure means: the share reported as pre-leased when the announcement was made; it can change as leases are signed, amended or cancelled.

What remains uncertain

The announcement did not provide campus-by-campus capacity, a detailed construction schedule, final tenant lists, total power demand including cooling, or a confirmed completion date for the full portfolio. Regulatory approvals and other closing conditions also meant the transaction was not fully established solely by the December 2023 announcement.

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