SAN FRANCISCO-Digital Realty Trust’s first-quarter earnings call revealed strong performance yields and solid results for first-quarter 2012. The company reported FFO of $1.06 per share for the first quarter, up 3.9% from $1.02 per share for the first quarter of 2011.
“With now over seven years of industry-leading performance as a data-center REIT, we are very pleased to report another quarter of solid results,” said Michael Foust, CEO of DLR, in a statement. “These results are primarily driven by our unique value proposition, consisting of our suite of customer-driven solutions, financial strength and data-center expertise, global footprint and supply-chain management.”
During the call, Foust said the company followed record leasing in 2011 with a moderate first quarter, which was in line with its expectations. Stronger results, as is typical with the firm, are expected to occur later in the year. Rental rates varied by building, with an average lease term of 148 months, exceeding previous time periods.
Also, DLR signed more than 264,000 square feet of space during the quarter, with portfolio occupancy greater than 94% and tenant retention very high at 95% of expiring turnkey space renewed. Phoenix and Dallas were reported among the stronger markets for the firm in terms of leasing, but overall “many new customers end up expanding in multiple locations with us,” Foust said.
Other financial information includes reported first-quarter net income of $49.3 million and net income available to common stockholders of $39.2 million, or $0.36 per share, up 9.1% from $0.33 per share for the first quarter of 2011. Also, the company closed a new $750 million US dollar equivalent unsecured multi-currency five-year term loan, which can be increased by $100 million to $850 million US dollar equivalent.
Total operating revenues of $283.1 million were reported in the first quarter, up 12.9% from a year ago and up 4.6% from $270.6 million in fourth-quarter 2011, mostly due to new leasing and acquisitions, Foust said. As GlobeSt.com previously reported, in February the company acquired an 819,000- square-foot operating data center and office campus in Lewisville, TX, a suburb of Dallas, for approximately $123 million. The property, currently known as Convergence Business Park, is 99% leased on a long-term basis to eight tenants. Also,
As of the end of the first quarter, the company’s portfolio comprised 102 properties—excluding three properties held in unconsolidated joint ventures—consisting of 148 buildings totaling approximately 19.1 million net rentable square feet, including 2.2 million square feet of space held for redevelopment. The portfolio is strategically located in 31 key data-center markets throughout North America, Europe, Singapore and Australia.
CFO and CIO William Stein followed Foust’s overview of operating results and the market with a report on the company’s financial strategy and capital-markets activity. The company’s growing global investment program has allowed for immediate activity for potential acquisitions, with nearly $989 million of new capital raised and $1.7 billion of immediate liquidity. “This is consistent with our practice of lowering oval cost of debt,” Stein said.
Total assets grew to approximately $6.4 billion by the end of the first quarter, up from $6.1 billion at the end of 2011. Total debt increased to $3.3 billion at the end of first quarter, up from $2.9 billion at the end of 2011, and stockholders’ equity was approximately $2.6 billion at the end of first quarter, up slightly from approximately $2.5 billion at the end of the year.
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Carrie Rossenfeld
Carrie Rossenfeld is a reporter for the San Diego and Orange County markets on GlobeSt.com and a contributor to Real Estate Forum. She was a trade-magazine and newsletter editor in New York City before moving to Southern California to become a freelance writer and editor for magazines, books and websites. Rossenfeld has written extensively on topics including commercial real estate, running a medical practice, intellectual-property licensing and giftware. She has edited books about profiting from real estate and has ghostwritten a book about starting a home-based business.
