Digital Realty Trust, Inc. · NYSE:DLR
Digital Realty Trust — Real Estate Conference April 2007
31 slides from Digital Realty Trust's conference presentation, Apr 10, 2007
Slide 1: Foundation of the Digital World – Real Estate Conference April 2007
Exhibit 99.2 Foundation of the Digital World Real Estate Conference April 2007
Slide 2: Forward Looking Statements
Forward Looking Statements The information included in this presentation contains forward-looking statements. Such statements are based on management’s beliefs and assumptions made based on information currently available to management. Such forward looking statements include statements and projecti
Slide 3: Digital Realty Trust overview
Digital Realty Trust overview DLR is a leading institutional owner focused on mission critical technology properties throughout North America and Europe Tenants consist of leading global companies diversified across various industries Own 62 properties comprising 11.8 million rentable sq ft which in
Slide 4: DLR investment highlights
DLR investment highlights Specialized focus in dynamic and growing industries High quality portfolio that is difficult to replicate Proven track record of creating shareholder value Conservative and flexible capital structure Industry leading domestic and international datacenter development and cri
Slide 5: DLR properties feature advanced technical systems
DLR properties feature advanced technical systems Power management/conversion Precision air cooling/handling Power backup/redundancy Systems and security controls Between $500 and $1000 psf typically invested in DLR buildings, creating a barrier to exit for tenants and discouraging speculative new s
Slide 6: DLR presence in 25 top markets
DLR presence in 25 top markets(1) Total Rentable # of Properties # of Buildings Square Feet Domestic 54 73 10,902,000 International 8 10 866,000 Total 62 83 11,768,000 (1) Includes properties owned as of April 6, 2007 5
Slide 7: DLR properties serve a variety of industry verticals
DLR properties serve a variety of industry verticals DLR offers corporate enterprise tenants, IT service providers, and network carriers flexible, cost-effective and reliable datacenter solutions Manufacturing/ Internet Financial Communications Technology Energy/Retail Enterprise 6
Slide 8: DLR is unique in its focus on technology properties
DLR is unique in its focus on technology properties Corporate Datacenters Portfolio Distribution (1) – Storage/server intensive buildings – Provide a secure 24x7 environment for the storage and processing of mission-critical electronic information – Used to house primary IT operations: transaction p
Slide 9: Strong trends drive sustained demand for DLR space
Strong trends drive sustained demand for DLR space Primary Drivers – Estimated Annual Growth Rates Other Growth Drivers 100% By 2008, 50% of existing corporate data centers will have insufficient power and cooling capacity to meet the 80 demands of high-density equipment (4) 73% Increased federal re
Slide 10: Bill rates and utilization rates are escalating
Bill rates and utilization rates are escalating Equinix and Savvis, two leading managed service providers that “resell” space leased directly from DLR, are experiencing strong growth in revenues and utilization Utilization Rate Revenue PSF 80% $600 $542 psf 70% $500 69% 60% Revenue PSF (Utilized) $5
Slide 11: DLR offers sustained growth
DLR offers sustained growth DLR growth is derived from three sources Acquisitions Leasing of Turn-Key Datacenter™ Space Redevelopment Inventory 10
Slide 12: Proven track record: strong acquisition activity
Proven track record: strong acquisition activity Since its IPO, DLR has more than doubled its total assets through property acquisitions Total Undepreciated Assets ($000) $2,400 $2,298.7 $2,200 $2,066.2 $2,000 $1,794.4 $1,800 $1,648.2 $1,593.6 $1,600 $1,508.5 $1,413.4 $1,400 $1,200 $1,137.4 $1,044.3
Slide 13: 2005, 2006 & YTD 2007 acquisitions
2005, 2006 & YTD 2007 acquisitions Acquired 40+ properties(1) totaling over $1.2 billion Added approximately 6.9 million square feet to total portfolio, including 1.8 million square feet of redevelopment inventory New markets include: – Philadelphia – St. Paul – Chicago – Charlotte – Amsterdam, Neth
Slide 14: 2005, 2006 & YTD 2007 acquisitions
2005,2006 & YTD 2007 acquisitions DLR has acquired approximately $1.2 billion in new properties Purchase Total Rentable Net Rentable Redevelopment Occupancy (1) Property Location Price (M) Sq Ft Sq Ft Sq Ft (Net of Redev) 2005 Acquisitions $466 3,490,685 2,658,433 832,252 4025 Midway Road Carrollton
Slide 15: Leasing drives internal growth
Leasing drives internal growth DLR commenced 211 leases during 2006, contributing approximately $30.0 million in annualized GAAP rental revenues (1) Total SF Annualized Annualized Type of Space # of Leases Leased GAAP Rent PSF GAAP Rent Datacenter 173 186,000 $121.00 $22.6 million Redevelopment 5 11
Slide 16: Same store growth
Same store growth ($000) 45,000 97.5% 44,000 97.0% Same Store Occupancy (1) Increase = 250 bps 43,000 96.5% 42,000 96.0% 41,000 95.5% 40,000 95.0% Same Store Quarterly Operating 39,000 Revenue (2) Increase = 11.5% 94.5% 38,000 94.0% 37,000 93.5% 36,000 93.0% Dec-05 Mar-06 Jun-06 Sep-06 Dec-06 Quarte
Slide 17: Case studies: DLR's value-add leasing
Case studies: DLR’s value-add leasing % Change in NOI from later of Acquisition / Acquisition or Property Name Location IPO Date IPO (1) 200 Paul Avenue San Francisco, CA Nov-04 41.5% 1100 Space Park Drive Santa Clara, CA Nov-04 50.9% 350 East Cermak Road Chicago, IL May-05 18.8% 300 Boulevard East
Slide 18: DLR redevelopment inventory
DLR redevelopment inventory Growth Opportunity Redevelopment inventory totals 1.8 million sf of vacant space with potential for up to 1.1 million sf of datacenter: – Approximately 65% of inventory in income-producing properties – Remaining 35% of inventory in 6 recently acquired vacant buildings Red
Slide 19: Redevelopment program progress report
Redevelopment program progress report Turn-Key Datacenter™ Built-to-suit Construction projects underway in 11 U.S. and European markets totaling over 500,000 rentable square feet of Turn-Key Datacenter™ and build-to-suit space DLR’s Turn-Key Datacenters™ – Move-in ready, physically secure facilities
Slide 20: DLR's competitive advantage: Dedicated technical professionals
DLR’s competitive advantage: Dedicated technical professionals Operating scale and process-based approach result in significant cost savings and added value for tenants Staff of over 50 DLR technical professionals: – IT sales team Focus on end-user, IT professionals (CIO or CTO) – Datacenter sales e
Slide 21: Replacement cost illustrates the value of DLR's portfolio
Replacement cost illustrates the value of DLR’s portfolio Replacement Cost Estimate Cost per Square Foot Equinix (2) Cost Components Low High Land $40 $70 Base Building Building Shell 60 150 Electrical Systems $297 $396 Mechanical Systems (HVAC) 92 122 Data Center (1) Fire Protection 21 29 Improveme
Slide 22: DLR's model features long-term, stable leases
DLR’s model features long-term, stable leases Lease expiration as a percentage of net rentable square feet 17.5% 17.6% 13.5% 11.9% in through 2009 9.2% 7.9% 6.0% 5.8% 5.4% 5.6% 4.5% 2.0% 2007 2008 2009 2010 2011 2012 2013 2014 2015 2016 Thereafter The average lease term is approximately 12 years wit
Slide 23: DLR financial overview
DLR financial overview Strong and consistent FFO (1) growth – $1.63 per diluted share and unit for 2006, +19% from 2005 – $0.48 per diluted share and unit for 4Q06, +33% from 4Q05 and +17% from 3Q06 Well supported dividend – 2.9% yield (2) – FFO / AFFO payout ratio of 60% / 99% (3) for 4Q06 – Increa
Slide 24: 2006 actual results compared to guidance
2006 actual results compared to guidance Guidance 2006 (1) Actual 2006 FFO (2) per share $1.57 – $1.59 $1.63 Leasing: Datacenter 200K – 300K sf @ $40.00 psf 300K @ $91.00 psf Non Technical (2) 100K – 125K @ $19.00 155K @ $17.00 psf $300 - $400 million $552.5 million Acquisitions 8% to 9% cap rate (4
Slide 25: DLR 2007 guidance
DLR 2007 guidance (1)(2) 2007 projected funds from operations (FFO) per share guidance: $1.85 to $1.95 Leasing 475,000 to 600,000 sq ft of turn- key & redevelopment space 8.8% to 12.7% (gross rent $80 / sq ft) Internal Growth FFO (2) Per Share Growth 100,000 to 125,000 sq ft of basic commercial spac
Slide 26: Improving overall credit quality of DLR portfolio
Improving overall credit quality of DLR portfolio Approximately $18 million of base rental income, or over 8% of overall income, has experienced an improvement in credit quality. + = + = (1)(2) (1) As a result of a sublease relationship with Microsoft for 200,000 sq ft of space that is leased direct
Slide 27: Significant Equity Capitalization Improvement in Top Tenants
Significant Equity Capitalization Improvement in Top Tenants DLR’s top tenants have experienced a robust increase in equity capitalization (1) $18.0 $15.9 $17.0 12.0 $10.6 $6.1 6.0 $2.5 $2.6 $2.2 $1.8 2.0 $1.2 $0.6 $0.7 $0.4 0.0 (1) Increase in equity capitalization calculated as of April 5, 2007 fr
Slide 28: DLR employs a conservative capital structure
DLR employs a conservative capital structure Wtd average cost of debt: Total Fixed Rate 5.84%(5); approximately 94% Debt (2)(6) Total Variable Rate 26.0% Debt fixed rate debt(6) 1.7% (3) Coverage ratios(7): Preferred 8.2%(4) – Debt service: 4.0x – Fixed charge: 2.9X Periodically refinancing high cos
Slide 29: Digital Realty Trust – providing the foundation for the digital world
DIGITAL REALTY TRUST providing the foundation for the digital world
Slide 30: Definition of Non-GAAP Financial Measures
Definition of Non-GAAP Financial Measures This presentation includes certain non-GAAP financial measures that management believes are helpful in understanding our business, as further described below. Our definition and calculation of non-GAAP financial measures may differ from those of other REITs,
Slide 31: Reconciliation of non GAAP items to their closest GAAP
Reconciliation of non GAAP items to their closest GAAP (1) Funds from operations Cash interest expense (including discontinued operations) Q406 Q306 Q405 FY2006 FY2005 Q406 Q306 Q405 FY2006 FY2005 Total GAAP interest expense (including Net income available to common stockholders $2,978 $11,342 $1,15
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