SAN FRANCISCO—Locally based Digital Realty Trust Inc. recently revealed preliminary leasing results for the fourth quarter of 2014, initial guidance for 2015, and details for its fourth quarter 2014 earnings release and conference call. And according to analyst Jonathan Peterson of MLV & Co., the 2015 guidance is “a slight disappointment.”
The firm reported that it had signed new leases totaling over $45 million of annualized GAAP rental revenue during the fourth quarter, bringing the full-year total for 2014 to over $155 million. The weighted-average lag between leases signed during the fourth quarter and the contractual commencement date was a little over five months, and the weighted-average lease term was a little over eight years, based on preliminary leasing data.
For its 2015 outlook, the firm's core FFO per share guidance is within a range of $5.00-$5.10, which represents an increase of approximately 1%-4% over full-year 2014 core FFO per share guidance of $4.90-$4.95. This outlook, the firm says, reflects dilution from the company's capital-recycling program, which is expected to reduce core FFO per share by approximately 2% in 2015. “Headwinds from foreign currency translation are expected to represent an additional drag of a little over 1%. The remaining assumptions underlying the 2015 outlook are summarized in the table below,” the firm says.
Analyst Peterson says that the midpoint of $5.05 is in-line with his firm's estimate and $0.03 below consensus. “We anticipate higher asset sales to be the main contributor to the slower FFO growth—DLR's capital recycling initiative should improve the quality of the overall portfolio and be a positive in the long-run,” Peterson says. “We maintain our HOLD rating and $68 price
target.”
GlobeSt.com will follow up on Digital Realty's Q4 numbers when the firm releases final results.
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Natalie Dolce
Natalie Dolce, editor-in-chief of GlobeSt.com and GlobeSt. Real Estate Forum, is responsible for working with editorial staff, freelancers and senior management to help plan the overarching vision that encompasses GlobeSt.com, including short-term and long-term goals for the website, how content integrates through the company’s other product lines and the overall quality of content. Previously she served as national executive editor and editor of the West Coast region for GlobeSt.com and Real Estate Forum, and was responsible for coverage of news and information pertaining to that vital real estate region. Prior to moving out to the Southern California office, she was Northeast bureau chief, covering New York City for GlobeSt.com. Her background includes a stint at InStyle Magazine, and as managing editor with New York Press, an alternative weekly New York City paper. In her career, she has also covered a variety of beats for M magazine, Arthur Frommer's Budget Travel, FashionLedge.com, and Co-Ed magazine. Dolce has also freelanced for a number of publications, including MSNBC.com and Museums New York magazine.
