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Why PREI Was Attracted to $369M JV

SAN FRANCISCO-Long lease terms and contractual rental rate increases on Digital Realty's Powered Base Building data centers provide a stable rental income stream for PREI, says a source in an UPDATE to an earlier story.

By Natalie Dolce | Updated on October 03, 2013

SAN FRANCISCO-Yesterday, GlobeSt.com reported that Digital Realty Trust Inc. had formed a $369-million joint venture with an investment fund managed by Prudential Real Estate Investors, the real estate investment management and advisory business of Prudential Financial. Digital Realty seeded the joint venture with nine Powered Base Building data centers totaling 1.06 million square feet and valued at approximately $366.4 million (excluding $2.8 million of closing costs), or $346 per square foot. 

“The long lease terms and contractual rental rate increases on these Powered Base Building data centers provide a stable rental income stream that represents a good fit with our investment objectives,” notes Cathy Marcus, managing director at PREI and senior portfolio manager of the firm’s core US real estate strategy. “These institutional quality properties are fully leased to a diversified roster of credit tenants, and we look forward to realizing a stable return on this portfolio over the course of a long-term relationship with Digital Realty.”

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