DuPont Lowers Guidance, Citing Debt Costs

DuPont Fabros Technology (DFT) said late Friday that it has lowered its guidance for the fourth quarter and full year 2009, citing costs related to a restructuring ot the company’s debt. DuPont Fabros said it expects to pay $14 million to retire an interest rate swap as part of a broader plan to retire existing debt and replace it with new borrowing.

DuPont Fabros, a real estate investment trust (REIT) specializing in data center properties, Funds from operations (”FFO”) for the fourth quarter of 2009 will be between 0 to 3 cents per fully diluted share, compared to a previous range of 26 to 29 cents. The company had been expecting FFO for the full year 2009 of $1.09 to $1.12 per share, but has now reduced that range to 83 cents to 86 cents.

Shares of DuPont Fabros are down 23 cents to $16.87 in afternoon trading on the Newe York Stock Exchange, a decline of 1.3 percent for the session.

DuPont Fabros Reveals Funding, New Leases

The exterior of the DuPont Fabros Technology ACC5 data center in Ashburn, Va. during construction earlier this year. Facebook has pre-leased additional space in the facility.

Data center developer DuPont Fabros Technology (DFT) said today that it has arranged a $150 million loan that will allow it to finish its huge ACC5 data center in Ashburn, Virginia, where it has leased additional space. The company also plans to sell $550 million in notes to build a huge data center project in New Jersey and repay existing debt.

If successful, the debt sale would allow DuPont Fabros to bring new space online in the active New Jersey market without having to sell common stock. Management has expressed a preference to fund construction through debt rather than an equity offering that would dilute the holdings of current stockholders. The company’s confidence in its ability to find buyers for its debt may have been boosted by the successful sale of more than $400 million in debt by Terremark Worldwide earlier this year.

Leasing Remains Strong
DuPont Fabros’ effort to fund its growth has been boosted by the strong leasing activity in its core northern Virginia market. the company has now leased nearly two thirds of the ACC5 data center, where Net2EZ and Facebook have leased space. Today the company announced two new leases at ACC5, with one tenant signing a five-year lease for 1.138 megawatts (MW) of critical load , and another signing a 12-year deal for 2.275 MW.

Strong Leasing Continues for DuPont Fabros

The DuPont Fabros Technology VA3 data center in Reston, Va., where the company has signed two leases to quickly fill space that will be vacated at year-end.

What a difference a year makes. As 2008 drew to a close, DuPont Fabros Technology was struggling. Facing the brutal headwinds of the credit crisis, the data center REIT’s stock had slipped to an all-time low of less than $2 a share after the company halted three development projects amid financing challenges.

Twelve months later, even as the economy continues to struggle, the outlook for DuPont Fabros has been transformed. In 2009 the company has signed 12 leases representing more than $700 million in contract value, gaining commitments for more than 187,000 square feet of data center space. In the third quarter DuPont Fabros opened the doors for first phase of ACC5, one of the projects that had been mothballed last November.

Four New Leases in Virginia
DuPont Fabros (DFT) reported its third quarter earnings late Tuesday, including four previously undisclosed leases in Northern Virginia. Significantly, the company was able to quickly fill space that was being vacated in its VA3 data center in Reston, Va. The deals continue the torrid pace of leasing in Northern Virginia, which is currently the most active market in the nation.

DuPont Fabros CEO on Cramer’s ‘Mad Money’

Jim Cramer has discovered data centers. The host of CNBC’s “Mad Money” got a viewer inquiry last week about data center REIT DuPont Fabros Technology (DFT) and was stumped. After researching DuPont Fabros, Cramer opined ona subsequent broadcast that he liked the company’s “fundamental story” but was troubled by its decision to suspend its dividend in late 2008. DuPont Fabros CEO Hossein Fateh saw the broadcast, got in touch with CNBC and appeared on a segment Wednesday in which Cramer discussed the data center sector and did a Q&A with Fateh. This video runs about 8 minutes (there’s a short pre-roll commercial).

Hmmmm … it’s too bad for Cramer (and his viewers) that he didn’t discover the stock when it was trading below $2 a share last November. It closed today’s session at $13.33 a share.

Check out our DuPont Fabros Channel for more news about the company. For additional video, check out our DCK video archive and the Data Center Videos channel on YouTube.

Facebook Makes Big Investment in Data Centers

The exterior of the DuPont Fabros Technology ACC5 data center in Ashburn, Va. during construction earlier this year. Facebook has pre-leased additional space in the facility.

Facebook has made a major commitment to its future infrastructure, locking down a large chunk of data center space in northern Virginia that will provide room for thousands of additional servers to power its fast-growing social networking hub. The lease in Ashburn, Va., which doesn’t start until 2011, represents a substantial financial commitment – as much as $125 million over the life of the lease, by some analysts’ math.   

Facebook has pre-leased 33,000 square feet of additional space in a huge data center being built by DuPont Fabros Technology in Ashburn, Virginia known as ACC5. Facebook already operates a data center in an adjacent building known as ACC4, and is about to move into about 30,000 square feet of space it has leased in the first phase of ACC5, which has just opened to tenants.

Planning Ahead for Major Growth
The new lease is in Phase II of ACC5, which has not yet been completed, and provides Facebook with 6.8 megawatts of power to support its IT gear. The lease doesn’t begin until January of 2011, meaning Facebook is planning ahead and expecting to fill the space in its first two Virginia data centers within the next 15 months. Facebook, which won’t begin making payments until the lease commences, wouldn’t comment on the length or total outlay involved in the agreement.

“We do not disclose specifics with regard to our lease financials, but we can confirm that we have signed an agreement,” Facebook said in a statement. “This agreement continues with our effort to add data center capacity to support our growing business.”

DuPont Fabros Focused on Leasing

The DuPont Fabros Technology ACC4 data center facility in Ashburn, Virginia.

DuPont Fabros Technology (DFT) hopes to complete leasing of its new data centers in Chicago and Virginia by the middle of 2010, but has no immediate plans to restart construction on its projects in New Jersey and Silicon Valley, the company said today.

In the meantime, solid revenue from the company’s five fully-leased data centers in northern Virginia helped DuPont Fabros post first quarter earnings that were in line with expectations. The real estate investment trust reported funds from operations (FFO) of $0.25 per share for first quarter of 2009, which was at the top end of guidance.

“During the quarter, we continued to execute on our overall business plan,” said Hossein Fateh, President and CEO of DuPont Fabros.

Fateh: Stimulus to Drive ‘Enormous’ Demand

The Obama administration’s stimulus package will drive “an enormous amount of new data center demand,” according to Hossein Fateh, the president and CEO of Dupont Fabros Technology (DFT). In this interview, Fateh discusses the outlook for real estate investment trusts in the data center sector. “For any REIT, it’s a challenging environment,” said Fateh. “The demand (for data centers) still outpaces supply in a very substantial way.” This video runs about 4 minutes.

For more information, see our DuPont Fabros Channel. For additional video, visit our DCK video archive and the Data Center Videos channel on YouTube.

DuPont Fabros Reports New Leases

The DuPont Fabros Technology ACC4 data center facility in Virginia.

Data center landlord DuPont Fabros Technology (DFT) continues to report strong leasing activity at the company’s data center facilities. The company announced three new leases this morning, including two leases with Fortune 500 enterprise companies for all the remaining space in its flagship ACC4 data center in Ashburn, Virginia. The leases totaled 2.275 megawatts of critical power load.

The leases continue a flurry of leasing activity in northern Virginia, as users with large footprint requirements look to lock up space. ACC4 was completed in the fourth quarter of 2007, and has a total power capacity of 36.4 megawatts of critical load.

Net2EZ Confirmed as DuPont Fabros Tenant

DuPont Fabros Technology (DFT) has identified Net2EZ Managed Data Centers as one of the companies that has leased space at its ACC5 data center in Ashburn, Virginia. Net2EZ, a national provider of colocation and managed data center services, has pre-leased a total of 2.275 megawatts (MW) of critical load, or about 12.5 percent of the power capacity of Phase I.

Net2EZ currently leases 2.275 MW of critical load at DuPont Fabros’ ACC4 data center in Ashburn. It is one of three tenants that have signed leases for more than 50,000 square feet of space in ACC5, representing 57 percent of the facility’s capacity. DuPont Fabros now expects to complete ACC5 during the third quarter of this year.