San Francisco, CA — July 27, 2006 - Digital Realty Trust, Inc, a leading owner and manager of corporate data centers and Internet gateways, today announced the acquisition of the Internet gateway for the Phoenix metropolitan area and data center facilities in Ft. Worth, Texas and Amsterdam, The Netherlands. The total purchase price paid for these three acquisitions was approximately $236.9 million. The Company has also announced the sale of Stanford Place II, located in the Denver Tech Center, realizing a gain of $17.9 million.
Acquisitions
Previously known as Downtown Phoenix Technology Exchange and Sterling Network Services (SNS), 120 E.Van Buren Street is more than 347,000 square feet in size and contains 175,000 square feet of datacenter space that includes over 95,000 square feet of Turn-Key Datacenter space operated by the building for corporate users. 120 E. Van Buren Street offers a carrier-neutral environment with more than 20 communications providers to support the networking needs of customers, and the facility also includes an 11,000 square foot Meet Me Room with immediate occupancy available to support cross-connections between the networks of telecom carriers and network service providers.
Digital Realty Trust will also significantly expand the amount of Turn-Key Datacenter space in the building available for occupancy by adding approximately 30,000 square feet of highly-improved raised floor space, developed in a portion of the 70,000+ square feet of space held for redevelopment. This 30,000 square feet of raised floor space will feature approximately 3MW of 2N UPS electrical power, and the project has a target completion date of late-Q1/early-Q2 2007.
As one of the key enhancements for 120 E. Van Buren Street customers, Digital Realty Trust plans to implement the next-generation building automation system (BAS) and security system in the Phoenix facility as part of its roll-out to its entire portfolio of buildings. The state-of-the-art BAS and security system, being implemented by industry leader TAC, provides tenants with enhanced building management capabilities that deliver significant benefits in areas such as energy efficiency, operational costs and ease of management. Digital Realty Trust will also put in place its industry-leading management policies for critical facility operations and construction, which will further enhance the security, reliability and performance of mission critical systems housed in the facility.
“The Phoenix metro area is a strong market with rapidly growing demand for high-quality space to support critical computing systems and network infrastructure. 120 E. Van Buren Street is ideally positioned to meet this demand because of its location, its access to abundant network fiber, the availability of truly turn-key datacenter space, and the presence of an operations team with a wealth of experience in the datacenter field, said Chris Crosby, Senior Vice President of Digital Realty Trust. “120 E. Van Buren Street is also in a unique position to support growing demand in the Phoenix area because of the availability of a significant amount of redevelopment space. Digital Realty Trust will convert approximately 30,000 square feet of that into high-quality raised floor space in a new Turn-Key Datacenter Facility to accommodate new customers as well as existing customers who are seeking to expand their presence in the building. The building gives our customers a tremendous amount of flexibility to support their needs today and in the future.
The second acquisition consists of twin 28,000 square foot data center buildings located in Amsterdam, The Netherlands. The buildings were constructed in 2000 as data centers specifically for a major European IT services company, which occupies 100% of the property through 2015. Combined, the buildings contain approximately 33,000 square feet of raised floor with the balance used for technical support and office space. The purchase price for the property was approximately $11.3 million based on current exchange rates.
The third acquisition is the sale-leaseback of a highly improved data center facility located in Ft. Worth, Texas. The property was built in 2000 and totals 263,700 square feet, consisting of a single-story 109,500 square foot fully improved data center, a two-story 39,000 square foot annex containing office and conference facilities, and an 115,500 square foot warehouse. The facility is 100% leased to Savvis Corporation for a 15-year term. The tenant has the option to convert much of the warehouse space to a fully improved data center to accommodate its growth. The purchase price for the property was $50.6 million. According to Digital Realty Trust CEO Michael Foust, “The acquisition of Phoenix’s premier Internet gateway facility represents a very significant addition to our portfolio. It enhances our presence in this important top tier market and expands our ability to provide exceptional data center and collocation services to our corporate and network customers. There are over 40 different fiber carriers operating in the facility; and with the substantial power available at the property, the building accommodates mission critical applications for a wide variety of corporate users. Additionally, the acquisition of the highly improved data centers in Ft. Worth and Amsterdam further expands our footprints in these key markets while adding to our portfolio of stabilized, income producing properties.
Dispositions
Digital Realty Trust also announced the sale of Stanford Place II, a 366,000 square foot suburban office building located at 7979 East Tufts Avenue in the Denver Tech submarket of Denver, Colorado. The property was originally acquired in 2003 by the predecessor to Digital Realty Trust. After the successful execution of the property’s re-tenanting and leasing strategy, bringing occupancy up from 84% to 97%, it was sold for $60.4 million, producing an approximate $17.9 million profit for the company. Michael Foust commented, “We were able to complete our repositioning strategy earlier than anticipated. The sale of this non-core asset represents an opportunity for us to realize very attractive returns on our investment and to redeploy the capital into our data center and Internet gateway acquisitions program.