Blackstone prepares to list its new data center REIT

Blackstone Digital Infrastructure Trust filed with the U.S. Securities and Exchange Commission (SEC) last week to raise up to $1.75 billion through an initial public offering (IPO) in the U.S., pricing it at $20 per share, qz.com reports. Blackstone Digital Infrastructure was created by Blackstone as a real estate investment trust (REIT) and aims to buy stabilized, tenant-occupied data centers valued at $250 million to $1.5 billion. The REIT focuses on properties with tenants that have investment-grade credit ratings and are large-scale operators.

According to Reuters, the trust has identified $25 billion in potential deals in Northern Virginia, Ohio, Phoenix, Maryland and Austin.

As an incentive, the trust is offering IPO participants additional shares worth 1% of their total investment. According to the SEC filing, a Blackstone affiliate has expressed its intention to participate in the IPO for up to $200 million in shares.

The trust is positioned ahead of other Blackstone-managed funds in terms of data center acquisitions that the firm is initiating.

"With a total stabilized data center market estimated to be worth $1 trillion over the next five years, we believe the industry represents a substantial investment opportunity,” the company said in the SEC filing.

• Blackstone Priorities

The IPO reflects two priorities for Blackstone, which manages $1.3 trillion in assets: becoming a major investor in artificial intelligence infrastructure and expanding its investor base beyond institutional clients. According to Reuters, Blackstone has invested more than $150 billion in data center assets since 2018.

The offering ties into Blackstone's broader data center push. The fund was part of a deal in which it, along with Related Digital, secured $16 billion in financing for a data center campus in Saline Township, Michigan, built for technology company Oracle. Blackstone contributed about $2 billion in equity to the project, according to Bloomberg.

The underwriting syndicate for the Blackstone REIT IPO includes Goldman Sachs, Citigroup, Morgan Stanley, Barclays, Bank of America, Deutsche Bank, JPMorgan Chase, Royal Bank of Canada and Wells Fargo as lead managers. Once listed, the REIT's shares will trade on the New York Stock Exchange under the symbol "BXDC".