Digital Realty Trust, Inc. (NYSE:DLR) Bank of America 2024 Media, Communications & Entertainment Conference September 4, 2024 8:50 AM ET Company Participants Matt Mercier - CFO Conference Call Participants David Barden - Bank of America David Barden Everybody, I'm Dave Barden. I head up Telecommunications and Comm-Infrastructure Research for Bank of America. And I'm here with the Chief Financial Officer of Digital Realty, Matt Mercier. Thank you for joining us, Matt. Matt Mercier Thanks for having me. Quest ...

Andrii Yalanskyi Fixed income is an area in which, far too often, allocation is dictated by category rather than opportunity. There are various fixed income instruments: Treasuries Munis Investment grade bonds Corporate junk bonds Preferred stock ("preferreds"). Many or even most institutions will have strict rules on where they can allocate capital. Some, such as pensions or other highly regulated capital, can only invest in investment grade or treasuries, others can only do bonds. Preferreds are frequentl ...

Shares of Digital Realty (DLR) have soared 11.4% in the year-to-date period compared with the industry's growth of 2.4%. The rising demand for high-performing data centers amid enterprises' growing reliance on technology and acceleration in digital transformation strategies has been one of the key forces driving the performance of data center real estate investment trusts (REITs) like Digital Realty. A solid tenant base assures stable revenues. It also carries out various development and redevelopment activ ...

Erik Isakson Digital Realty Trust, Inc. (NYSE:DLR) has reported a positive operating performance in recent quarters, but the AI hype has pushed its valuation into questionable multiples and its income-appeal is no longer enough to buy its shares. As I've covered in previous articles, I see REIT Digital Realty as a good income pick for long-term investors. This is due to its highly recurring business profile and positive structural growth tailwinds, which bode well for its business and dividend growth over t ...

AUSTIN, Texas, Aug. 7, 2024 /PRNewswire/ -- Digital Realty (NYSE: DLR), the largest global provider of cloud- and carrier-neutral data center, colocation and interconnection solutions, announced today its board of directors has authorized quarterly cash dividends for common and preferred stock for the third quarter of 2024. Common Stock Digital Realty's board of directors authorized a cash dividend of $1.22 per share to common stockholders of record as of the close of business on September 13, 2024.The comm ...

OVERR NDERRATI ogichobanov Co-produced by Austin Rogers Investors are becoming interested in real estate investment trusts ("REITs") again. Since the Federal Reserve began hiking their key policy rate in early 2022, the real estate sector (VNQ) has suffered a multi-year bear market. VAL Vanguard Real Estate ETF (VNQ) Price 89.73 Effective Federal Funds Rate (I:EFFRND) 5.33% 5.33% 112.00 4.80% 104.00 4.00% 96.00 3.20% 89.73 2.40% 1.60% 80.00 72.00 0.80% 64.00 0.00% 56.00 -0.80% 2020 2021 2022 2023 2024 Seeki ...

Joint Ventures and Sales - In January 2024, the company formed a joint venture with Blackstone Inc. to develop four hyperscale data center campuses, receiving approximately $231 million in net proceeds and retaining a 20% interest[147]. - The company sold its interest in four data centers to Brookfield for approximately $271 million, recognizing a total gain on disposition of approximately $203.1 million[148]. - In March 2024, a joint venture with Mitsubishi Corporation was formed to develop two pre-leased data centers in Dallas, with a contribution value of approximately $261 million and the company retaining a 35% interest[149]. - The company expanded its joint venture with GI Partners by selling a 75% interest in a facility valued at approximately $453 million, receiving approximately $386 million in net proceeds and recognizing a gain on disposition of approximately $172 million[150]. - An additional 24.9% interest in a Frankfurt data center was sold to DCREIT for approximately $126 million, with DCREIT now holding a 49.9% interest[151]. - The joint venture with GI Partners resulted in a cash capital contribution of $68 million, increasing GI Partners' ownership interest in the joint venture to 80%[203]. - The joint venture with Blackstone Inc. is expected to incur an estimated development cost of $3.0 billion for the first phase, with the company retaining a 20% interest[205]. - The company recognized a total gain of approximately $194.2 million from the sale of four data centers to Brookfield Infrastructure Partners L.P. in January 2024[175]. Financial Performance - The company's revenue primarily consists of rental income from its data center portfolio, with occupancy rates being a key factor for revenue growth[153]. - Total operating revenues decreased by approximately $9.5 million and $17.1 million in the three and six months ended June 30, 2024, respectively, compared to the same periods in 2023[166]. - Stabilized rental and other services revenue decreased by $16.3 million and $23.5 million in the three and six months ended June 30, 2024, primarily due to a decrease in utility reimbursement of $52.6 million and $95.4 million[166]. - New leasing and renewals across all regions contributed an increase of $23.4 million and $49.0 million in stabilized rental revenue for the same periods[166]. - Total operating revenues for the three months ended June 30, 2024, were $1,356,749, a decrease of $9,518 or (0.7)% compared to $1,366,267 in the same period of 2023[167]. - The company reported a net income available to common stockholders of $70.039 million for the three months ended June 30, 2024, compared to $108.003 million for the same period in 2023, representing a decrease of approximately 35.1%[222]. - Funds from Operations (FFO) for the three months ended June 30, 2024, was $168.303 million, compared to $165.843 million for the same period in 2023, reflecting a year-over-year increase of approximately 0.88%[222]. - Basic FFO per share for the three months ended June 30, 2024, was $1.57, slightly up from $1.54 in the same period of 2023, indicating a growth of about 1.94%[222]. Occupancy and Leasing - As of June 30, 2024, the total net rentable square feet was 41,220, with an occupancy rate of 82.9%[154]. - The average remaining lease term was approximately five years, indicating a long-term commitment from customers[155]. - The geographic concentration of total annualized rent as of June 30, 2024, showed Northern Virginia at 18.9% and Chicago at 7.9%[159]. - The company expects average aggregate rental rates on renewed data center leases for 2024 expirations to be positive compared to current rates[156]. Expenses and Operating Costs - Operating expenses are expected to increase as the company continues to expand its data center operations[160]. - Total stabilized utilities expenses decreased by approximately $58.8 million (15.9%) in the three months ended June 30, 2024, compared to the same period in 2023[170]. - Total rental property operating and maintenance expenses (excluding utilities) increased by approximately $18.8 million (5.7%) in the three months ended June 30, 2024, compared to the same period in 2023[172]. - Total property level operating expenses decreased by $43,523 (6.7%) in the three months ended June 30, 2024, compared to the same period in 2023[176]. - Total stabilized property taxes and insurance increased by approximately $9.6 million (39.9%) in the three months ended June 30, 2024, compared to the same period in 2023[172]. Capital Expenditures and Debt - The company expects to incur approximately $0.9 billion to $1.4 billion in capital expenditures for its consolidated development programs during the remainder of 2024[194]. - Total capital expenditures for the six months ended June 30, 2024, were $1,204.4 million, compared to $1,266.6 million for the same period in 2023[198]. - The total outstanding consolidated indebtedness as of June 30, 2024, was $16,438 million, with fixed-rate debt comprising 85.6% of the total[209]. - The effective interest rate as of June 30, 2024, was 2.87%, with fixed-rate debt having an effective interest rate of 2.61%[209]. - The company paid down $240 million on the U.S. term loan facility, resulting in an early extinguishment charge of approximately $1.1 million during the six months ended June 30, 2024[178]. - The company’s ratio of debt to total enterprise value was approximately 24% as of June 30, 2024[210]. Cash and Liquidity - As of June 30, 2024, Digital Realty Trust, Inc. had $2,282.1 million in cash and cash equivalents, excluding $5.2 million of restricted cash[191]. - The company reported a net increase in cash, cash equivalents, and restricted cash of $697,850 for the six months ended June 30, 2024[213]. - As of July 31, 2024, the company had approximately $1.8 billion of borrowings available under its Global Revolving Credit Facilities[202]. - The Global Revolving Credit Facilities provide for borrowings up to $3.9 billion, with an additional $750 million available subject to lender commitments[192]. Interest Rate and Currency Risks - The company utilized interest rate swap agreements to manage exposure to interest rate movements, with fixed rate debt totaling $11.182 billion as of June 30, 2024[225]. - The company expects to mitigate foreign currency exchange risk through local currency financing and cross-currency interest rate swaps[228]. - The company is exposed to foreign currency exchange risks primarily with the Euro, Japanese yen, British pound sterling, Singapore dollar, South African rand, and Brazilian real[228]. - The company mitigates currency fluctuation risks by financing investments in local currencies and using cross-currency interest rate swaps[228]. - The company's analysis indicates that a 10% increase in interest rates would lead to an increase of $3 million in annual interest expense on variable rate debt not subject to swaps[226]. - The effectiveness of hedging strategies, such as foreign currency forwards or options, cannot be guaranteed[228]. - Changes in foreign currency relations to the U.S. dollar may impact revenues, operating margins, and stockholders' equity[228]. - The company's exposure to the Brazilian real is limited to its share of the Ascenty entity's operations[228].

The company registered operating revenues of $1.36 billion in the second quarter, which missed the Zacks Consensus Estimate of $1.38 billion.DLR also reported "Same-Capital" cash net operating income (NOI) growth of 2%. Quarter in Detail In the second quarter, rental property operating expenses increased by 5.7% to $237.6 million, property taxes rose by 6.2% to $49.6 million, and interest expenses jumped by 3.3% to $114.7 million. As of Jun 30, 2024, this data center REIT had $16.3 billion of total debt out ...

Digital Realty Trust, Inc. (NYSE:DLR) Q2 2024 Earnings Conference Call July 25, 2024 5:00 PM ET Company Participants Jordan Sadler - SVP, Public and Private IR Andrew Power - President and CEO Matthew Mercier - CFO Christopher Sharp - Chief Technology Officer Colin McLean - Chief Revenue Officer Gregory Wright - Chief Investment Officer Conference Call Participants Richard Choe - JPMorgan Irvin Liu - Evercore ISI Michael Rollins - Citi Jonathan Atkin - RBC Jonathan Petersen - Jefferies Ari Klein - BMO Capit ...

The reported revenue compares to the Zacks Consensus Estimate of $1.38 billion, representing a surprise of -1.57%. The company delivered an EPS surprise of +1.23%, with the consensus EPS estimate being $1.63. Since these metrics play a crucial role in driving the top- and bottom-line numbers, comparing them with the year-ago numbers and what analysts estimated about them helps investors better project a stock's price performance. Net Earnings per Share (Diluted): $0.20 versus $0.27 estimated by six analysts ...