Digital Realty Trust (DLR) expects to acquire at least three more data center properties before the end of 2009, and has gained the first customer for its new data center design service, the company said today.
Digital Realty, the largest real estate investment trust (REIT) specializing in the data center sector, today reported third-quarter finds from operations of $74.7 million (74 cents a share), compared with $62 million (68 cents a share) a year earlier. The results were slightly ahead of the analyst consensus of 72 cents per share.
The company also reported that it was assigned a Baa2 rating from Moody’s Investors Service, which could eventually expand its financing options in a tough debt market. “As we await ratings from the other agencies, this Baa2 rating from Moody’s is an important first step for Digital Realty Trust towards accessing the investment grade unsecured debt market, an important component of our future funding strategy that we believe will further differentiate us from our competitors,” said CFO William Stein.
In a conference call with analysts, Digital Realty executives said they are continuing efforts to buy occupied data centers as income properties, which generate revenue through rent from existing tenants. “We are looking at a handful of opportunities,” said CEO Michael Foust, who said the company expects to close on three properties before the end of 2009. “We continue to see attractive opportunities.”
Foust also said Digital Realty has signed the first customer contract for its new POD Architecture Services, a new offering enabling customers to license Digital Realty Trust’s data center designs and construction management expertise, and save money on procurement by leveraging DLR’s bulk purchasing power.
The first client is a financial services company that is an existing customer of Digital Realty’s Turn-Key Datacenter program, said Foust, who projected that the use of the POD Architecture Services could reduce the proejct cost by “tens of millions” of dollars. He predicted that the new service could result in about $10 million or more in bottom-line revenue for the company in 2010.
“More importantly, it’s building deeper relationships that can help us, particularly in our build-to-suit program,” said Foust.