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Digital Realty Trust Acquires Six Austin Data Centers

Digital Realty purchased a portfolio of six data centers in Austin adjacent to its data center at 7500 Metro Center Drive. This acquisition adds 337,000 square feet to the company's portfolio, most of which is fully leased.

Digital Realty Trust acquired a six-building portfolio in Austin, Texas for $31.9 million. The portfolio is located at the MetCenter Business Park and consists of 337,000 square feet of operating data centers and flex space.

The overall portfolio is 90 percent leased to a variety of companies, with two of the six buildings total approximately 100,000 net rentable square feet fully leased to three tenants.

This move continues Digital’s recent streak of acquiring fully leased properties for income, plus adds some new development space for upside.

"The acquisition of this portfolio achieves several key objectives for us," said Scott Peterson, Chief Acquisitions Officer at Digital Realty. "It expands our existing data center footprint in the Austin market, while providing stable cash flow immediately at an attractive going-in cap rate. Second, it provides near-term opportunity to add value by lease existing vacant space. And third, it offers the option to convert a portion of the property to data center space over the longer term as leases expire."

The six buildings are located adjacent to Digital Realty's data center at 7500 Metro Center Drive, approximately five miles southeast of the Austin central business district, and nearby Austin-Bergstrom International Airport.

"This acquisition adds inventory to a market where we have already seen substantial absorption at our existing facilities, as well as strong demand from enterprise customers," said Michael Foust, Chief Executive Officer at Digital Realty. "It is a continuation of our strategy of growing a world class data center portfolio in markets where our customers want to be located."

Where are the customers wanting to be located? Just this year, the company has acquired facilities in Dallas, Phoenix , Minnesota, Toronto, Paris,  and Sydney. All of these acquisitions were in markets where the company says it saw very positive demand, and most of these properties were fully leased at time of acquisition. It also launched its own DCIM, announced it was seeking out tier certification for 20 facilities, and is building dark fiber connecting its key internet gateways. It upgraded its POD infrastructure to offer up to 1.2 megawatts in each data hall, up from 1.125. The company has kept busy.

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