Digital Realty Raises Guidance on Record AI Lease Volume
The provider secures $855 million in new rent, signaling robust demand for AI-capable data center capacity.
Updated on Oct. 31, 2026 in Data Centers
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Digital Realty reported record demand for its data center infrastructure in the third quarter of 2026, signing $855 million in new annualized rent. The company subsequently raised its full-year core funds from operations (FFO) guidance, citing intense requirements for artificial intelligence infrastructure.
Why it matters
The company’s ability to secure large leases underscores the rapid pace at which enterprise AI needs are consuming global data center capacity. This trajectory highlights a sustained demand for scalable colocation providers as firms race to build out infrastructure.
Digital Realty achieved a 11.8% cash re-leasing spread during the quarter, with churn dropping to 0.7%. Stabilized occupancy reached 93.4% as the company continues to manage a 1.5 GW data center construction pipeline expected to yield an 11.6% return.
The players
Digital Realty
A global provider of carrier-neutral data centers that specializes in large-scale infrastructure for cloud and AI deployments.
The details
Digital Realty provides a cloud- and carrier-neutral platform, meaning it hosts hardware for various cloud service providers and enterprise clients in a shared environment. By maintaining a large-scale inventory of power and cooling capacity, the company supports the deployment of dense server racks required for AI models. The current revenue visibility into 2027 and 2028 is supported by a total signed lease backlog of $2.5 billion, representing space that is contracted but not yet fully operational.
Timeline
Q3 2026: Digital Realty signed record-breaking new lease agreements.
October 29, 2026: The company released its official third-quarter financial results.
2027-2028: Revenue is expected to be bolstered by the current $2.5 billion signed backlog.
The Tech Race
Digital Realty is expanding its footprint to capture the massive capital investment currently flowing into AI-ready data centers. This surge in leasing activity places the company in a strong position relative to historical growth benchmarks as it works through a $22 billion construction pipeline.
Enterprise customers relying on high-density computing will face a tightening supply of available, high-power data center capacity through 2026. Companies that have not already secured capacity in the $2.5 billion backlog may see longer lead times for infrastructure deployment.
The takeaway
The sustained demand for AI infrastructure is currently decoupling from general market volatility, keeping vacancy rates low. Investors and industry stakeholders should monitor the firm's construction execution and the realized yields of the $22 billion pipeline over the coming quarters.
Further reading
For broader trends in infrastructure, explore the Data Centers section.
Live Poll
Is the rapid expansion of physical data center capacity a sustainable long-term priority for our economy?
