Digital Realty Trust Inc.
), a niche real estate investment trust (REIT), recently signed a
new agreement with DataBank Holdings, Ltd. to lease its datacenter
facility in Dallas for an undisclosed amount.
The first phase of the four-phased construction process is
scheduled to come online in the fourth quarter of 2012. The
stand-alone datacenter in Digital Realty's Datacenter Park Dallas
facility would have dedicated power delivery via dual 10MW utility
Digital Realty operates datacenters and digital storage
facilities, which are primarily used by telecommunication companies
to maintain their Internet presence or augment their data networks.
Datacenters usually incur high costs for building and maintenance,
and as such supply is relatively inelastic.
Digital Realty provides flexible and cost effective datacenter
facilities to a wide range of customers, including domestic and
international companies across multiple industry verticals. Its
portfolio includes 103 properties throughout Europe, North America,
Singapore, and Australia, spanning approximately 19.7 million
square feet of space (including 2.3 million square feet of
With demand for digital storage facilities increasing in recent
years, Digital Realty has benefited greatly by negotiating
favorable lease terms and maintaining strong occupancy rates. The
long-term lease agreements have also insulated the company from
short-term volatility and unfavorable market swings experienced
during the recession. This has enabled Digital Realty to continue
paying out solid dividends to its shareholders.
We have a Neutral recommendation for Digital Realty, which
currently has a Zacks #3 Rank, translating into a short-term Hold
rating. However, we have an Outperform recommendation and a Zacks
#1 Rank (short-term Strong Buy rating) for
MPG Office Trust Inc.
), one of the competitors of Digital Realty.
DIGITAL RLTY TR (DLR): Free Stock Analysis
MPG OFFICE TRST (MPG): Free Stock Analysis
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