On May 11, 2026, Digital Realty, the world's largest data center REIT by footprint, disclosed plans for a US open-end fund targeting a cornerstone raise of up to $3 billion. The move, reported by PERE, marks the company's most ambitious private fundraising push to date.
Digital Realty already manages a suite of fund series globally. The new vehicle is designed to capture institutional capital seeking direct exposure to US data center assets without the volatility of public REIT shares.
The $3 billion target is not a final fund size. It is the cornerstone tranche—the anchor commitment that signals market confidence and allows the fund to begin deploying capital before a broader syndication.
Digital Realty's existing fund platform includes vehicles focused on Europe, Asia-Pacific, and joint ventures with large institutional partners. The US open-end structure is a deliberate shift: open-end funds offer daily liquidity, which appeals to pension funds and sovereign wealth funds that require periodic redemption rights.
The timing aligns with a structural imbalance in data center supply and demand. Hyperscale cloud providers—Amazon Web Services, Microsoft Azure, Google Cloud—continue to lease capacity at record pace. Vacancy rates in primary US markets remain below 3 percent, per CBRE data.
Digital Realty reported $5.4 billion in total revenue for 2025, with net operating income margins above 45 percent. Its balance sheet carries $18 billion in debt, but the company maintains investment-grade ratings from Moody's and S&P.;
The private fund structure allows Digital Realty to access a lower cost of equity than public markets currently offer. Public REITs trade at a discount to net asset value in the current rate environment. Private funds can price assets at replacement cost or forward-looking cap rates, not daily mark-to-market.
Institutional investors have been rotating capital into data centers as a secular growth play. Preqin data shows data center-focused private funds raised $28 billion globally in 2025, up from $19 billion in 2024. The asset class now commands a dedicated allocation within many infrastructure and real estate portfolios.
The open-end structure carries risks. If redemptions spike during a market dislocation, the fund may be forced to sell assets at distressed prices or gate withdrawals. Digital Realty's track record of managing its balance sheet through cycles will be tested.
Digital Realty's move mirrors a broader trend: public REITs launching private vehicles to capture institutional demand without diluting public shareholders. Prologis, the largest industrial REIT, raised $5 billion for its own open-end fund in 2025. Equinix, Digital Realty's closest competitor, operates a similar strategy through its xScale joint ventures.
The $3 billion cornerstone target is ambitious but achievable. Digital Realty's existing relationships with sovereign wealth funds, pension funds, and insurance companies provide a ready pipeline. The company has not disclosed a target date for the first close.
The fund will likely target stabilized assets with long-term leases to investment-grade tenants. That profile matches what institutional investors demand: predictable cash flows, inflation protection, and low correlation to broader real estate cycles.
Digital Realty's private fundraising push signals that the data center asset class has matured beyond a niche allocation. It is now a core holding for the world's largest capital pools. The $3 billion cornerstone is a down payment on that thesis.