Digital Realty Trust Inc.
), a niche real estate investment trust (REIT), disclosed the
closure of the acquisition of 1500 Towerview Road in Eagan, Minn.
The company shelled out $37 million for this data center
facility, which is fully leased to
Delta Air Lines Inc.
Spanning over 329,000 square feet on 39 acres of land, this 3
level facility includes around 86,000 square feet of raised-floor
data center space and has 8 megawatts of IT capacity. It was
structured as a sale-leaseback transaction and Delta Air Lines
has inked an 8-year, triple net lease with Digital Realty for the
The acquisition is in line with the long-term investment
objectives of Digital Realty, that focus on investing in
institutional-quality data center facilities in
high-barrier-to-entry markets that possess substantial prospects
to generate attractive risk-adjusted return on investments.
Alongside, the deal is expected to strengthen its relationship
with an existing client.
With the rise in demand for digital storage facilities in recent
years, Digital Realty has benefited greatly by negotiating
favorable lease terms and maintaining strong occupancy rates. The
long-term lease agreements have insulated the company from
short-term volatility and unfavorable market swings experienced
during the recession.
Digital Realty operates data centers and digital storage
facilities, which are primarily used by companies to maintain
their Internet presence or augment their data networks. Data
centers usually incur high costs for building and maintenance,
and as such the supply is relatively inelastic.
Digital Realty currently has a Zacks Rank #3 (Hold). However, 2
other REIT stocks that are performing well and deserve a look
Federal Realty Investment Trust
Simon Property Group Inc.
), both carrying a Zacks Rank #2 (Buy).
DELTA AIR LINES (DAL): Free Stock Analysis
DIGITAL RLTY TR (DLR): Free Stock Analysis
FED RLTY INV (FRT): Free Stock Analysis
SIMON PROPERTY (SPG): Free Stock Analysis
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