Digital Realty Trust, Inc. · NYSE:DLR
Digital Realty Trust — Investor Presentation (September 2007)
32 slides from Digital Realty Trust's investor presentation, Sep 13, 2007
Slide 1: Foundation of the Digital World: Investor Meetings September 2007
Exhibit 99.1 Foundation of the Digital World Investor Meetings September 2007
Slide 2: Forward Looking Statements
Forward Looking Statements The information included in this presentation contains forward-looking statements. Such statements are based on management’s beliefs and assumptions made based on information currently available to management. Such forward looking statements include statements and projecti
Slide 3: Digital Realty Trust Overview
Digital Realty Trust Overview DLR is a leading institutional owner focused on mission critical technology properties throughout North America and Europe. Tenants consist of leading global companies diversified across various industries Own 66 properties(1) comprising 11.9 million rentable sq ft, whi
Slide 4: DLR Investment Highlights
DLR Investment Highlights Specialized focus in dynamic and growing sector High quality portfolio that is difficult to replicate Proven track record of creating shareholder value Conservative and flexible capital structure Industry leading domestic and international datacenter development and critica
Slide 5: DLR Properties Feature Advanced Technical Systems
DLR Properties Feature Advanced Technical Systems Power management/conversion Precision air cooling/handling Power backup/redundancy Systems and security controls Between $500 and $1000 psf typically invested in DLR buildings, creating a barrier to exit for tenants and discouraging speculative new s
Slide 6: DLR Presence in Top Markets
DLR Presence in 26 Top Markets Total Rentable # of Properties (1) # of Buildings Square Feet Domestic 57 77 11,029,000 International 9 10 866,000 Total 66 87 11,895,000 (1) Includes properties owned as of September 11, 2007, excluding one property held in an unconsolidated joint venture. 5
Slide 7: DLR Properties Serve a Variety of Industry Verticals
DLR Properties Serve a Variety of Industry Verticals DLR offers corporate enterprise tenants, IT service providers, and network carriers flexible, cost-effective and reliable datacenter solutions. Manufacturing/ Internet Financial Communications Technology Energy Enterprise 6
Slide 8: DLR Tenant Distribution
DLR Tenant Distribution (1) IT Services and Internet Enterprise 43% Professional & Financial Services 9% Other Technology 8% Non-Technology Communications 11% Services 29% (1) Calculation based on average annualized GAAP rents using in place leases as of June 30, 2007, excluding one property held in
Slide 9: DLR is Unique in its Focus on Technology Properties
DLR is Unique in its Focus on Technology Properties Corporate Datacenters – Storage/server intensive buildings Portfolio Distribution (1) – Provide a secure 24x7 environment for the storage and processing of mission-critical electronic information – Used to house primary IT operations: transaction p
Slide 10: Strong Trends Drive Sustained Demand for DLR Space
Strong Trends Drive Sustained Demand for DLR Space Primary Drivers – Estimated Annual Growth Rates Other Growth Drivers 100% By 2008, 50% of existing corporate data centers will have insufficient power and cooling capacity to meet the 80 demands of high-density equipment (4) 73% Increased federal re
Slide 11: Bill Rates and Utilization Rates are Escalating
Bill Rates and Utilization Rates are Escalating Equinix and Savvis, two leading managed service providers that “resell” space leased directly from DLR, are experiencing strong growth in revenues and utilization. Utilization Rate Revenue PSF 90% $700 $628 psf 80% $600 Revenue PSF (Utilized) 70% $518
Slide 12: DLR Offers Sustained Growth
DLR Offers Sustained Growth DLR growth is derived from three sources. Acquisitions Leasing of Turn-Key Datacenter™ and Powered Base Building™ Space Redevelopment Inventory 11
Slide 13: Proven Track Record: Strong Acquisition Activity
Proven Track Record: Strong Acquisition Activity Since its IPO, DLR has more than doubled its total assets through property acquisitions. Total Undepreciated Assets ($000s) $2,750 $2,535.5 $2,457.5 $2,298.7 $2,250 $2,066.2 $1,794.4 $1,750 $1,648.2 $1,593.6 $1,508.5 $1,413.4 $1,250 $1,137.4 $1,044.3
Slide 14: 2005 Through YTD 2007 Acquisitions
2005 Through YTD 2007 Acquisitions Acquired 45+ properties (1) totaling over $1.3 billion Added approximately 7.3 million square feet to total portfolio, including approximately 1.8 million square feet of redevelopment inventory New markets include: – Philadelphia – St. Paul – Chicago – Charlotte –
Slide 15: 2007 Acquisition Activity
2007 Acquisition Activity DLR has acquired approximately $1.3 billion in new properties since 2005. Percentage of Total Net Total Square Net Rentable Purchase Price Total Rentable Rentable Feet Held for Square Feet (1) Property Metropolitan Area (in millions) Square Feet Square Feet Redevelopment Oc
Slide 16: Leasing Drives Internal Growth
Leasing Drives Internal Growth DLR commenced 211 leases during 2006, contributing approximately $30.0 million in annualized GAAP rent. (1) Leases Commenced YTD through June 30, 2007: # of Total SF Annualized GAAP Annualized Type of Space Leases Leased Rent PSF GAAP Rent Turn-Key Datacenter™ 26 88,00
Slide 17: Same Store Growth
Same Store Growth(1) 16% Year over Year Increase in Same Store Quarterly Operating Revenue (2) ($000) 70,000 68,000 66,000 64,000 62,000 60,000 58,000 56,000 54,000 Jun-06 Sep-06 Dec-06 Mar-07 Jun-07 Second quarter 2007 same store cash revenue was $63.8 million(3) (1) Same store properties were acqu
Slide 18: Case Studies: DLR's Value-add Leasing
Case Studies: DLR’s Value-add Leasing Acquisition / IPO % Change in NOI from later (1) Property Name Location Date of Acquisition or IPO Run Rate NOI 200 Paul Avenue San Francisco, CA Nov-04 60.0% $ 16,991,253 1100 Space Park Drive Santa Clara, CA Nov-04 95.1% $ 6,791,971 350 East CermakRoad Chicago
Slide 19: DLR Redevelopment Inventory
DLR Redevelopment Inventory Growth Opportunity Redevelopment inventory totals 1.8 million sf of vacant space with potential for up to 1.1 million sf of datacenter(1): – Approximately 65% of inventory in income-producing properties – Remaining 35% of inventory in 5 vacant buildings Redevelopment cost
Slide 20: Redevelopment Program Progress Report
Redevelopment Program Progress Report Turn-Key Datacenter™ Built-to-suit Construction projects underway in 11 U.S. and European markets totaling over 404,000 rentable square feet of Turn-Key Datacenter™ , build-to-suit space and new Powered Base Building™ shell construction DLR’s Turn-Key Datacenter
Slide 21: DLR's Competitive Advantage: Dedicated Technical Professionals
DLR’s Competitive Advantage: Dedicated Technical Professionals Operating scale and process-based approach result in significant cost savings and added value for tenants Staff of over 65 DLR technical professionals: – IT sales team Focus on end-user, IT professionals (CIO or CTO) – Datacenter sales e
Slide 22: Replacement Cost Illustrates the Value of DLR's Portfolio
Replacement Cost Illustrates the Value of DLR’s Portfolio Replacement Cost Estimate Cost per Square Foot Equinix (2) Cost Components Low High Land $40 $70 Base Building Building Shell 60 150 Electrical Systems $297 $396 Mechanical Systems (HVAC) 92 122 Data Center (1) Fire Protection 21 29 Improveme
Slide 23: DLR's Model Features Long-term, Stable Leases
DLR’s Model Features Long-term, Stable Leases Lease expiration as a percentage of net rentable square feet 24.4% 17.9% 9.4% in through 2009 12.4% 8.0% 7.9% 5.6% 5.4% 5.1% 4.1% 3.6% 0.2% 2007 2008 2009 2010 2011 2012 2013 2014 2015 2016 Thereafter The average lease term is approximately 12 years with
Slide 24: DLR Financial Overview
DLR Financial Overview Strong and consistent FFO(1) growth – $0.51 per diluted share and unit for 2Q07, +34% from 2Q06 and +2% from 1Q07 – $1.63 per diluted share and unit for 2006, +19% from 2005 Increasing NOI(1) – $62.7 million in 2Q07, +7% from $58.8 million in 1Q07 and +52% from $41.1 million i
Slide 25: DLR Capital Raising Activities
DLR Capital Raising Activities Proven access to capital – YTD 2007 Entered into enhanced $650 million revolving credit facility – Increased size from $500 million – Reduced applicable margin ranges by 12.5 to 25 basis points – Extended maturity to 2010 – Modified covenants to enhance financial flexi
Slide 26: DLR 2007 Guidance
DLR 2007 Guidance (1)(2) 2007 projected funds from operations (FFO) per share guidance: $1.91 to $1.96 Leasing 475,000 to 600,000 sq ft of turn- key & redevelopment space 11.2% to 13.0% (gross rent $70 / sq ft) Internal Growth FFO(2) Per Share Growth 100,000 to 125,000 sq ft of basic commercial spac
Slide 27: Improving Overall Credit Quality of DLR Portfolio
Improving Overall Credit Quality of DLR Portfolio Approximately $18 million of base rental income, or over 8% of overall income, has experienced an improvement in credit quality. + = + = (2) (1) (1) In June 2007 Microsoft assumed 300,000 sf lease from Savvis at two DLR Santa Clara properties. (2) On
Slide 28: Significant Equity Capitalization Improvement in Top Tenants
Significant Equity Capitalization Improvement in Top Tenants DLR’s top tenants have experienced a robust increase in equity capitalization (1) $18.0 $15.9 $16.3 12.0 $10.6 $6.1 6.0 $2.8 $2.2 $1.8 $1.9 2.0 $1.2 $0.6 $0.7 $0.4 0.0 (1) Increase in equity capitalization calculated as of September11, 200
Slide 29: DLR Employs a Conservative Capital Structure
DLR Employs a Conservative Capital Structure Wtd average cost of debt: Variable 5.99%(5); approximately 83% Rate Debt (3) 5.3% fixed rate debt(6) Fixed Rate Coverage ratios(7): Debt (2)(6) 26.4% – Debt service: 3.8x – Fixed charge: 2.6X Equity (1) 60.2% Periodically refinancing high Preferred cost d
Slide 30: Digital Realty Trust
DIGITAL REALTY TRUST providing the foundation for the digital world
Slide 31: Definition of non-GAAP financial measures
Definition of non-GAAP financial measures This presentation includes certain non-GAAP financial measures that management believes are helpful in understanding our business, as further described below. Our definition and calculation of non-GAAP financial measures may differ from those of other REITs,
Slide 32: Reconciliation of non-GAAP items to their closest GAAP
Reconciliation of non-GAAP items to their closest GAAP Funds from operations (1) Cash interest expense and fixed charges (including discontinued operations) Q207 Q107 Q406 Q306 Q206 Q106 FY2006 FY2005 Q207 Q107 Q406 Q306 Q206 Q106 FY2006 FY2005 Total GAAP interest expense (including Net income avail
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