Digital Realty Trust, Inc. · NYSE:DLR
Digital Realty Trust — Investor Presentation (November 2007)
30 slides from Digital Realty Trust's investor presentation, Nov 14, 2007
Slide 1: Foundation of the Digital World – Investor Meetings November 2007
Exhibit 99.1 Foundation of the Digital World Investor Meetings November 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 the leading institutional owner focused on mission-critical datacenters throughout North America and Europe. Diverse base of 444 tenants consisting of leading global companies across various industries resulting in $307.3 million in annualized rent on a straight-
Slide 4: 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 $1,000 psf typically invested in DLR buildings, creating a barrier to exit for tenants and discouraging speculative new
Slide 5: DLR Organizational Depth and Breadth
DLR Organizational Depth and Breadth 146 employees (1) Corporate headquarters Core capabilities: – San Francisco – Acquisitions Regional offices – Sales & Technical Services – North America Sales Los Angeles Engineering Phoenix Design & Construction Dallas – Operations Chicago Portfolio Management N
Slide 6: 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 75 DLR technical professionals: – IT sales team Focus on end-user, IT professionals (CIO or CTO) – Datacenter sales
Slide 7: DLR has a Unique Portfolio of Datacenter Properties
DLR has a Unique Portfolio of Datacenter Properties Internet Gateways Portfolio Distribution (1) – Highly strategic assets that are extremely difficult to replicate due to their existing IP network infrastructure – Serve as the hub for Internet and data communications within and between Data Center
Slide 8: DLR Owns Over 1,100 MW of Utility Power Capacity
DLR Owns Over 1,100 MW of Utility Power Capacity (1) Top 15 Properties (2): Property Name Market Capacity (MW) Devon Shafron Drive (3 Buildings) Northern Virginia 225 350 East Cermak Road Chicago 100 3 Corporate Place New York 44 114 Rue Ambroise Croizat Paris, France 40 2045 & 2055 LaFayette Street
Slide 9: DLR Presence in 26 Top Markets
DLR Presence in 26 Top Markets Region West Midwest East Europe Total # of Properties 21 16 21 9 67 Total RSF 3,676,000 3,852,000 3,584,000 908,000 12,020,000 Total Improved Datacenter RSF 2,502,000 2,395,000 2,279,000 507,000 7,683,000 Note: Table above includes properties owned as of November 7, 20
Slide 10: DLR Properties Support a Variety of Industry Verticals
DLR Properties Support a Variety of Industry Verticals DLR provides real estate solutions for its diverse tenant base. Energy Internet Financial Communications Technology Manu/Services Enterprise 9
Slide 11: DLR Tenant Distribution
DLR Tenant Distribution No single tenant accounts for more than 13% of annualized rent(1). % of Annualized IT Services Tenant Rent 37% Internet Enterprise 5% Savvis 12.7% Qwest 8.9% Professional & Equinix 4.0% Financial Services TelX 3.6% 12% AT&T 3.2% NTT Verio 2.7% Other Technology Comverse Techno
Slide 12: Strong Trends Drive Sustained Demand for DLR Space
Strong Trends Drive Sustained Demand for DLR Space Primary Growth Drivers Other Drivers – Estimated Five Year CAGRs 40% By 2008, 50% of existing corporate datacenters will have insufficient power and cooling capacity to meet the demands of high-density equipment (3) 30% Increased business continuity
Slide 13: DLR Growth Drivers
DLR Growth Drivers DLR growth is derived from two sources. Leasing of Turn-Key TM Datacenter and Powered Base Building TM Space – Redevelopment Inventory Acquisitions – Value-Add Income Producing Properties – Vacant Properties for Redevelopment 12
Slide 14: Leasing Drives Internal Growth
Leasing Drives Internal Growth YTD 2007 DLR commenced 68 leases totaling 611,000 sf, contributing approximately $33.3 million in annualized GAAP rent (1) . Leases Commenced YTD as of September 30, 2007: # of Total SF Annualized GAAP Annualized Type of Space Leases Leased Rent PSF GAAP Rent Turn-Key
Slide 15: Same Store Growth
Same Store Growth Strong Increase in Same Store Quarterly Operating Revenue (1)(2) 80,000 $75,235 $68,516 70,000 $66,338 $64,388 $61,617 60,000 50,000 40,000 30,000 20,000 10,000 0 3Q2006 4Q2006 1Q2007 2Q2007 3Q2007 Same store cash NOI increased to $40.8 million in the 3Q07, up 14.6% from $35.6 mill
Slide 16: Case Studies: DLR's Value-Add Leasing
Case Studies: DLR’s Value-Add Leasing % Change in NOI from later of Annualized Property Name Location Acquisition / IPO Date Acquisition or IPO (1) NOI (1) 300 Boulevard East Weehawken, NJ Nov-04 89.3% $12,994,000 1100 Space Park Santa Clara, CA Nov-04 95.0% $6,968,000 200 Paul Avenue San Francisco,
Slide 17: DLR Redevelopment Program
DLR Redevelopment Program Primary Growth Driver Redevelopment inventory totals 1.7 million rsf (1) with potential for up to 1.1 million rsf of datacenter (2): – Approximately 76% of redevelopment space in income- producing properties – Remaining 24% of redevelopment space in five vacant buildings Re
Slide 18: Redevelopment Program Progress Report
Redevelopment Program Progress Report Turn-Key Datacenter™ Built-to-Suit • Construction projects currently underway in 9 U.S. and European markets totaling approximately 440,000 rentable square feet of Turn-Key Datacentre™, New Powered Base Building™ shell construction and Build-to-Suit space (1) •
Slide 19: Replacement Cost Illustrates the Value of DLR's Portfolio
Replacement Cost Illustrates the Value of DLR’s Portfolio Replacement Cost Estimate: Cost Per Gross Square Foot Cost Components Low High Land (1) $25 $75 Base Building Building Shell $80 $160 Electrical Systems $280 $460 Mechanical Systems (HVAC) $125 $215 Datacenter Improvements Fire Protection $15
Slide 20: 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) $2,740.2 $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
Slide 21: 2007 Acquisition Activity
2007 Acquisition Activity DLR has acquired new properties totaling approximately $280 million in 2007. Percentage of Total Net Total Square Net Rentable Purchase Price Total Rentable Rentable Feet Held for Square Feet Property Metropolitan Area (in millions) Square Feet Square Feet Redevelopment Occ
Slide 22: 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 26.3% 16.7% 15.9% 17.6% through 2010 8.5% 7.3% 5.1% 4.6% 4.6% 4.0% 1.5% 0.6% 2007 2008 2009 2010 2011 2012 2013 2014 2015 2016 Thereafter The average lease term is approximately 13 years with 7
Slide 23: DLR Financial Overview
DLR Financial Overview Strong and consistent FFO (1) growth – $0.51 per diluted share and unit for 3Q07, +24% from 3Q06 – $1.63 per diluted share and unit for 2006, +19% from 2005 Increasing NOI (1) – $64.9 million in 3Q07, +4% from $62.7 million in 2Q07 and +31% from $49.5 million in 3Q06 Well supp
Slide 24: DLR Capital Raising Activities
DLR Capital Raising Activities Proven access to capital – YTD 2007 Issued 4.025 million shares of common stock, resulting in $150.5 of net proceeds Entered into enhanced $650 million revolving credit facility – Increased size from $500 million – Reduced applicable margin ranges by 12.5 to 25 basis p
Slide 25: DLR 2008 Guidance
DLR 2008 Guidance(1) 2007 revised projected Funds from Operations (FFO)(2) per share guidance: $2.02 to $2.04 2008 projected Funds from Operations (FFO) (2) per share guidance: $2.30 to $2.40: Leasing 890,000 to 990,000 sq ft of Turn-Key Datacenter™ & Powered Base Building™ space 10.2% to 15.0% (ave
Slide 26: DLR Employs a Conservative Capital Structure
DLR Employs a Conservative Capital Structure DLR Capital Structure Weighted average cost of debt: 5.84%(5); approximately Variable Rate Debt 3.8%(3) 87% fixed rate debt(6) Fixed Rate (2)(6) Debt 24.9% Coverage ratios (7): – Debt service: 3.4x – Fixed charge: 2.4x (1) Preferred Equity 63.7% 7.6%(4) T
Slide 27: DLR Implied Cap Rate
DLR Implied Cap Rate ($ in thousands, except per square foot values) (1) $2,773,701 $2,773,701 $2,773,701 Current Market Value of Common Stock and OP Units Liquidation Value of Perpetual Preferred Stock 341,750 341,750 341,750 (2) Net Debt 1,285,926 1,285,926 1,285,926 Less: Book Value of Constructi
Slide 28: Digital Realty Trust – providing the foundation for the digital world
DIGITAL REALTY TRUST providing the foundation for the digital world
Slide 29: 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 30: 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) Q307 Q207 Q107 Q406 Q306 Q206 Q106 FY2006 FY2005 Q307 Q207 Q107 Q406 Q306 Q206 Q106 FY2006 FY2005 Total GAAP interest expense (including Net inc
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