Digital Realty Trust, Inc. · NYSE:DLR
Digital Realty Trust — REITWEEK 2007 NAREIT Investor Forum
32 slides from Digital Realty Trust's conference presentation, Jun 4, 2007
Slide 1: REITWEEK 2007 NAREIT Investor Forum
Exhibit 99.1 Foundation of the Digital World REITWEEK 2007 NAREIT Investor Forum June 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 63 properties(1) comprising 11.8 million rentable sq ft whic
Slide 4: DLR Investment Highlights
DLR Investment Highlights Specialized focus in dynamic and growing industries 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 cri
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 25 Top Markets (1) Total Rentable # of Properties (2) # of Buildings Square Feet Domestic 54 73 10,902,000 International 9 10 866,000 Total 63 83 11,768,000 (1) Includes properties owned as of May 8, 2007 (2) Includes 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/Retail Enterprise 6
Slide 8: DLR Tenant Distribution
DLR Tenant Distribution (1) IT Services and Internet Enterprise 40% Professional & Financial Services 10% Other 7% Communications Services 31% Non-Technology 12% (1) Calculation based on average annualized GAAP rents using in place leases as of March 31, 2007, excluding one property held in an uncon
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 80% $700 74% 70% $600 Revenue PSF (Utilized) $518 psf 60% $
Slide 12: DLR Offers Sustained Growth
DLR Offers Sustained Growth DLR growth is derived from three sources. Acquisitions Leasing of Turn-Key Datacenter TM 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) $2,500 $2,457.5 $2,298.7 $2,066.2 $2,000 $1,794.4 $1,648.2 $1,593.6 $1,508.5 $1,500 $1,413.4 $1,137.4 $1,044.3 $1,000 $847.2 $5
Slide 14: 2005 Through YTD 2007 Acquisitions
2005 Through YTD 2007 Acquisitions Acquired 40+ properties(1) totaling over $1.2 billion Added approximately 6.9 million square feet to total portfolio, including over 1.7 million square feet of redevelopment inventory New markets include: – Philadelphia – St. Paul – Chicago – Charlotte – Amsterdam,
Slide 15: 2005 Through YTD 2007 Acquisitions
2005 Through YTD 2007 Acquisitions DLR has acquired approximately $1.2 billion in new properties. Purchase Total Rentable Net Rentable Redevelopment Occupancy (1) Property Location Price (M) Sq Ft Sq Ft Sq Ft (Net of Redev) 2005 Acquisitions $466 3,490,685 2,658,433 832,252 4025 Midway Road Carrollt
Slide 16: Leasing Drives Internal Growth
Leasing Drives Internal Growth DLR commenced 211 leases during 2006, contributing approximately $30.0 million in annualized GAAP rental revenues. (1) First Quarter 2007 Leases Commenced: Total SF Annualized Annualized Type of Space # of Leases Leased GAAP Rent PSF GAAP Rent Datacenter 17 57,000 $70.
Slide 17: Same Store Growth
Same Store Growth(1) ($000) 68,000 95.0% 94.8% 66,000 Same Store Occupancy (2) Increase = 70 bps 94.6% 64,000 94.4% 62,000 94.2% 60,000 94.0% Same Store Quarterly Operating 93.8% 58,000 Revenue (3) Increase = 16.6% 93.6% 56,000 93.4% 54,000 93.2% 52,000 93.0% Mar-06 Jun-06 Sep-06 Dec-06 Mar-07 Quart
Slide 18: Case Studies: DLR's Value-add Leasing
Case Studies: DLR’s Value-add Leasing % Change in NOI from later of Acquisition / Acquisition or IPO Property Name Location IPO Date As of 1Q 07 (1) 200 Paul Avenue San Francisco, CA Nov-04 71.8% 1100 Space Park Drive Santa Clara, CA Nov-04 97.2% 350 East Cermak Road Chicago, IL May-05 44.6% 300 Bou
Slide 19: DLR Redevelopment Inventory
DLR Redevelopment Inventory Growth Opportunity Redevelopment inventory totals 1.7 million sf of vacant space with potential for up to 1.0 million sf of datacenter: – Approximately 65% of inventory in income-producing properties – Remaining 35% of inventory in 6 vacant buildings Redevelopment costs v
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 500,000 rentable square feet of Turn-Key Datacenter TM and build-to-suit space DLR’s Turn-Key Datacenters TM – Move-in ready, physically secure facili
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 50 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 21.6% 16.8% 11.3% 11.8% in through 2009 7.8% 7.9% 6.2% 6.0% 5.5% 5.4% 4.8% 1.5% 2007 2008 2009 2010 2011 2012 2013 2014 2015 2016 Thereafter The average lease term is approximately 12 years wit
Slide 24: DLR Financial Overview
DLR Financial Overview Strong and consistent FFO(1) growth – $1.63 per diluted share and unit for 2006, +19% from 2005 – $0.50 per diluted share and unit for 1Q07, +39% from 1Q06 and +4% from 4Q06 Increasing NOI(1) – $58.8 million in 1Q07, +7% from $54.7 million in 4Q06 and +54% from $38.2 million i
Slide 25: DLR Capital Raising Activity
DLR Capital Raising Activity Proven access to capital – YTD 2007 Raised $175.0 million of 4.375% convertible preferred stock: 20% premium Sold two non-core assets for estimated total gain on sale of $18.0 million – $900.2 million of capital raised in 2006 Amended credit facility – Increased facility
Slide 26: DLR 2007 Guidance - Update
DLR 2007 Guidance - Update (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 commer
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. + = + = (1)(2) (1) As a result of a sublease relationship with Microsoft for 200,000 sq ft of space that is leased direct
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) (1) Increase in equity capitalization calculated as of May 17, 2007 from DLR IPO date of November 1, 2004. 27
Slide 29: DLR Employs a Conservative Capital Structure
DLR Employs a Conservative Capital Structure (2)(6) Total Fixed Rate Debt Wtd average cost of debt: 26% Total Variable Rate Debt (3) 2% 5.84%(5); approximately 93% Preferred (4) fixed rate debt(6) 8% Coverage ratios(7): – Debt service: 3.1x – Fixed charge: 2.4X Periodically refinancing high cost deb
Slide 30: Digital Realty Trust
DIGITAL REALTY TRUST providing the foundation for the digital world
Slide 31: Definition of non-GAAP financial measures
SEE — Definition of non-GAAP financial measures This presentation includes certain non-GAAP financial measures that mar are helpful in understanding our business, as further described below. Our definition and calculation of non-GAAP financial measures may differ from of Cher Re REITs, and, therefor
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) Q107 Q406 Q306 Q206 Q106 FY2006 FY2005 Q107 Q406 Q306 Q206 Q106 FY2006 FY2005 Total GAAP interest expense (including Net income available to co
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