SAN FRANCISCO, Feb. 27, 2012 /PRNewswire/ — Digital Realty Trust, Inc. (NYSE:DLR, news, filings), a leading global provider of data center solutions, announced today that it has acquired an 819,000 square foot operating data center and office campus, located in Lewisville, Texas, a suburb of Dallas. The purchase price was approximately $123.0 million.
The campus totals over 168 acres, which includes ten buildings and 39 acres of land for future development. The property, currently known as Convergence Business Park, is 99% leased on a long-term basis to eight tenants. Approximately 35% of the property is leased as data center space to three tenants, representing approximately 36% of total revenue for the property. The balance of the space is leased as office and office/lab space.
“This acquisition will immediately contribute stabilized cash flow to our portfolio from the existing long-term leases, while providing a wide range of future development and potential redevelopment opportunities,” said Michael F. Foust, Chief Executive Officer of Digital Realty. “Dallas continues to be a very strong market for us. When combined with Datacenter Park Dallas in Richardson, located approximately 25 miles from this site, we believe that we will be able to accommodate a large majority of the data center requirements from customers seeking space in the Dallas market.”
Primary electrical service is provided by Texas New Mexico Power (TNMP) via a high-voltage utility-owned onsite substation that totals 16.5 megawatts of IT capacity. Currently, TNMP is adding two transformers at the site, which will provide approximately 67 megawatts of additional power. Based on current zoning, the property is capable of supporting up to 700,000 square feet of new development.
“Based on our conservative underwriting, which uses the current operating configuration, we expect to generate attractive risk adjusted returns on our investment,” added Scott Peterson, Chief Acquisitions Officer. “With the availability of developable land and increased power from the expanding substation, we believe this investment has considerable upside potential.”
About Digital Realty
Digital Realty Trust, Inc. focuses on delivering customer driven data center solutions by providing secure, reliable and cost effective facilities that meet each customer’s unique data center needs. Digital Realty’s customers include domestic and international companies across multiple industry verticals ranging from information technology and Internet enterprises, to manufacturing and financial services. Digital Realty’s 102 properties, excluding three properties held as investments in unconsolidated joint ventures, comprise approximately 19.1 million square feet as ofFebruary 27, 2012, including 2.4 million square feet of space held for redevelopment. Digital Realty’s portfolio is located in 31 markets throughout Europe, North America, Singapore and Australia. Additional information about Digital Realty is included in the Company Overview, which is available on the Investors page of Digital Realty’s website at http://www.digitalrealty.com.
Safe Harbor Statement
This press release contains forward-looking statements which are based on current expectations, forecasts and assumptions that involve risks and uncertainties that could cause actual outcomes and results to differ materially, including statements related to our acquisition of Convergence Business Park, expected cash flow, future development and redevelopment plans, supply and demand in the Dallas market, and expected size and IT/power capacity. These risks and uncertainties include, among others, the following: the impact of the recent deterioration in global economic, credit and market conditions, including the downgrading of the U.S. government’s credit rating; current local economic conditions in our geographic markets; decreases in information technology spending, including as a result of economic slowdowns or recession; adverse economic or real estate developments in our industry or the industry sectors that we sell to (including risks relating to decreasing real estate valuations and impairment charges); our dependence upon significant tenants; bankruptcy or insolvency of a major tenant or a significant number of smaller tenants; defaults on or non-renewal of leases by tenants; our failure to obtain necessary debt and equity financing; increased interest rates and operating costs; risks associated with using debt to fund our business activities, including re-financing and interest rate risks, our failure to repay debt when due, adverse changes in our credit ratings or our breach of covenants or other terms contained in our loan facilities and agreements; financial market fluctuations; changes in foreign currency exchange rates; our inability to manage our growth effectively; difficulty acquiring or operating properties in foreign jurisdictions; our failure to successfully integrate and operate acquired or redeveloped properties; risks related to joint venture investments, including as a result of our lack of control of such investments; delays or unexpected costs in development or redevelopment of properties; decreased rental rates or increased vacancy rates; increased competition or available supply of data center space; our inability to successfully develop and lease new properties and space held for redevelopment; difficulties in identifying properties to acquire and completing acquisitions; our inability to acquire off-market properties; our inability to comply with the rules and regulations applicable to reporting companies; our failure to maintain our status as a REIT; possible adverse changes to tax laws; restrictions on our ability to engage in certain business activities; environmental uncertainties and risks related to natural disasters; losses in excess of our insurance coverage; changes in foreign laws and regulations, including those related to taxation and real estate ownership and operation; and changes in local, state and federal regulatory requirements, including changes in real estate and zoning laws and increases in real property tax rates. For a further list and description of such risks and uncertainties, see the reports and other filings by the Company with the U.S. Securities and Exchange Commission, including the Company’s Annual Report on Form 10-K for the year ended December 31, 2010 and Quarterly Reports on Form 10-Q for the quarters ended March 31, 2011, June 30, 2011 and September 30, 2011. The Company disclaims any intention or obligation to update or revise any forward-looking statements, whether as a result of new information, future events or otherwise.
|For Additional Information:
|A. William Stein
|Pamela M. Garibaldi
|Chief Financial Officer and
|Vice President, Investor Relations and
|Chief Investment Officer
|Digital Realty Trust, Inc.
|Digital Realty Trust, Inc.
|+1 (415) 738-6500
|+1 (415) 738-6500
SOURCE Digital Realty Trust, Inc.