Digital Realty Reports on 2Q Leasing

Digital Realty Trust (DLR) has released data on its leasing activity during the second quarter, which showed slightly more activity than during the same period in the last two years, but with higher pricing.

Digital Realty Trust (DLR) has released data on its leasing activity during the second quarter, which showed slightly more activity than during the same period in the last two years, but with higher pricing. Here are the numbers for the quarter ending June 30,2009:

  • Digital Realty commenced leases totaling approximately 115,000 square feet of space, including 93,000 square feet of Turn-Key Datacenter space leased at an average annual GAAP rental rate of $166.00 per square foot, and approximately 22,000 square feet of non-technical space leased at an average annual GAAP rental rate of $24.00 per square foot. A lease commences when the tenant occupies the facility, which often lags the lease signing by a few months. The company also reported $627,000 in rental revenue for rooftop infrastructure on existing Powered Base Building leases.
  • The company signed leases during the second quarter of 2009 totaling approximately 100,000 square feet of space. This includes approximately 92,000 square feet of Turn-Key Datacenter space leased at an average annual GAAP rental rate of $167.00 per square foot and approximately 8,000 square feet of non-technical space leased at an average annual GAAP rental rate of $23 a square foot.

The Turn-key Datacenter program offers customers finished ”plug and play” raised-floor data center space, which shifts the data center development costs from the tenant to the landlord, and allows for much quicker deployment than if the customer built a new facility on its own. Powered Base Building (PBB) is undeveloped space with the power and fiber connectivity already in place, allowing for easy expansion.

The volume of leasing was slightly higher than seen during equivalent quarters in 2008 and 2007.

"Our strong leasing results to date reflect the continued demand for our Turn-Key Datacenter product," commented Michael Foust, Chief Executive Officer of Digital Realty Trust. "The leases that have commenced will contribute approximately $46.8 million of incremental revenue recognized in 2009. The supply of fully fitted-out datacenter space for corporate IT customers remains significantly constrained as a result of the limited availability of capital to build out this highly specialized space. We are encouraged by the level of new requirements we are tracking in our top markets and remain well-positioned to capture a disproportionate share of that demand."

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