Data Centers Power Record $3.46B Blackstone Deal

Data centers backed by Blackstone secured a record $3.46B CMBS refinancing, the largest of its kind to date.
Portfolio value rose 18% to $5.62B, driven by soaring demand for AI-ready infrastructure.
High-growth markets like New Jersey and Texas saw triple-digit asset appreciation, while some oversupplied areas declined.
Despite rising revenue and cash flow, loan size increased modestly, showing lender caution amid strong sector fundamentals.

Key Takeaways

AI Demand Sends Valuations Soaring

Blackstone has returned to the CMBS market with a record-breaking $3.46B refinancing for its QTS Realty Trust data center portfolio. The deal eclipses its previous high-water mark set in 2021, reports CoStar. The loan, originated by Citi Real Estate Funding and 10 other lenders, is expected to close in December.

Data centers are enjoying a valuation surge as AI workloads continue to expand, demanding more power and computing capacity. Morningstar DBRS reported that the portfolio’s value climbed from $4.75B to $5.62B over the past four years — an 18% increase. The cap rate dropped from 7.50% to 7.32%, suggesting lenders view data centers as stable, core assets rather than niche real estate plays.

Big Winners And Laggards In The Portfolio

While the overall trend is positive, market-specific performance varies. Three data centers saw explosive growth:

Princeton, NJ: +218% to $515M
Fort Worth, TX: +182% to $481M
Ashburn, VA: +63% to $779M

By contrast, oversupplied or high-cost markets saw losses:

Santa Clara, CA: –12.9% to $135M
Suwanee, GA: –14.6% to $772M
Atlanta, GA: –9.5% to $1.82B

Debt Metrics Signal Lender Discipline

Net cash flow jumped 23% to $331.2M, while revenue reached $465.9M. Despite this growth, the loan size rose only 8%. This reflects cautious underwriting even amid strong market fundamentals.

The Power Behind The Deal

The 10-property portfolio spans 214.9 megawatts of built data center capacity, leased at 94% with 202.4 MW in use. The sites serve over 690 tenants, with more than half of the rent paid by investment-grade entities.

Top facilities by capacity include:

Atlanta, GA: 70.8 MW
Irving, TX: 33.5 MW
Ashburn, VA: 33 MW

Why It Matters

This deal cements data centers as one of the most in-demand real estate asset classes. As AI continues to reshape digital infrastructure needs, investors are treating data centers as essential, income-generating core assets.

JLL reports that North America added 1.6 GW of data center capacity in H1 2025 alone, bringing total inventory to 15.5 GW — equivalent to powering a large city or small nation.

What’s Next

Despite recent AI market pullbacks in the public equity space, institutional capital continues to flow into data centers. As AI adoption grows, expect more large-scale refinancing, development, and M&A activity in this critical real estate segment.