GlobeSt.com UPDATE: Digital Realty Completes $168M Offering

SAN FRANCISCO-Digital Realty Trust this week completed its most recent common and preferred stock offering, generating gross proceeds of $167.8 million. The nine-month-old technology REIT will use the proceeds to repay borrowings under its unsecured credit facility, for which the outstanding balance was $188 million as of the end of June, according to SEC filings. Citigroup and Merrill Lynch & Co. were the joint book-running managers for the common stock offering, which totaled 5.87 million shares (including the underwriters’ over-allotment) at $17.80 per share and generated gross proceeds of $104.5 million. Citigroup, Merrill Lynch & Co. and UBS Investment Bank were the book- running managers for the 7.875% series B cumulative redeemable preferred stock offering, which totaled 2.53 million shares and generated gross proceeds of $63.3 million.Digital Realty commenced the offering in mid July and on July 20 increased the common stock offering from 4.83 million shares and priced it at $17.80, which was the company’s closing stock price the previous day. In noontime trading today, the share price stood at $18.54, up $0.01 on the day, but earlier in the day traded as high as $18.65, marking a new 52-week high. Digital Realty went public in November, selling 20 million shares at $12 per share for gross proceeds of $240 million. The company went public with 23 properties that were part of a private equity fund established in 2001 by CalPERS (95%) and CB Richard Ellis Investors (5%), and CalPERS continues to own 40% of the company’s operating partnership. The company has since acquired 10 additional operating properties–giving it a total operating portfolio of about 7.3 million sf. The company’s properties are located in markets where technology tenants are concentrated, including the Atlanta, Boston, Dallas, Denver, Los Angeles, Miami, New York, Phoenix, Sacramento, San Francisco and Silicon Valley metropolitan areas. The portfolio consists of telecommunications infrastructure properties, information technology properties, technology-manufacturing properties and regional or national headquarters of technology companies.