Digital Realty completes final close of $3.25B U.S. fund

Digital Realty said it completed the final close of an inaugural U.S. hyperscale data center fund. The company framed the step as a way to support its PlatformDIGITAL funding and capital allocation approach as it works to expand hyperscale data center capacity.

The fund secured $3.25 billion of total equity commitments from a range of global institutional investors, including public pensions, sovereign wealth funds, endowments and foundations, corporate pensions, insurance and asset managers, and family offices. Digital Realty said it would retain a 20% ownership interest in the portfolio and serve as the manager.

Digital Realty said the fund focused on ownership and development of hyperscale data centers across major U.S. Tier I metros, including Northern Virginia, Santa Clara, Dallas, Atlanta, Charlotte and New York. As manager, it oversees operations, leasing, asset management, development, and financing, and described the structure as aligning interests with investors. The Strategic Private Capital platform was described as augmenting PlatformDIGITAL’s capacity to support hyperscale customer requirements and as diversifying and scaling its capital base.

The company also announced two senior additions to its Strategic Private Capital team: Michael Yang as Managing Director, Fund Management, and Bradley Petersen as Managing Director, Private Capital Fund Raising. “We are pleased to announce the final close of our inaugural U.S. hyperscale data center fund, alongside the addition of two highly experienced senior executives to our Strategic Private Capital team,” Greg Wright, Digital Realty Chief Investment Officer, said. “We remain focused on sourcing and delivering hyperscale data center capacity to support our customers’ accelerating requirements, and private capital is playing an increasingly important role in how we prudently and efficiently scale PlatformDIGITAL,” Wright said. “The U.S. remains the world’s cornerstone market for advanced technology companies, and we are proud to support their growth through our inaugural Fund,” Matt Mercier, Digital Realty Chief Financial Officer, said.