We use cookies to understand how you use our site and to improve your experience. This includes personalizing content and advertising. To learn more, click here. By continuing to use our site, you accept our use of cookies, revised Privacy Policy and Terms of Service.
You are being directed to ZacksTrade, a division of LBMZ Securities and licensed broker-dealer. ZacksTrade and Zacks.com are separate companies. The web link between the two companies is not a solicitation or offer to invest in a particular security or type of security. ZacksTrade does not endorse or adopt any particular investment strategy, any analyst opinion/rating/report or any approach to evaluating individual securities.
If you wish to go to ZacksTrade, click OK. If you do not, click Cancel.
Digital Realty JV Closes $135M Refinancing, Ups Flexibility
Read MoreHide Full Article
Data Center REIT Digital Realty Trust, Inc.’s (DLR - Free Report) joint venture has completed a $135 million secured debt refinancing. The move offered greater financial flexibility by extending the debt maturity profile at a favorable cost.
Specifically, a $135 million 10-year mortgage was closed on the Westin Building Exchange which is owned in a 50/50 joint-venture partnership with Clise Properties. The property serves as the internet exchange for the Pacific Northwest in Seattle, Washington.
This new mortgage financing has interest at a fixed rate of 3.29% per annum with a maturity in Jun 2027. It is interest-only during the 10-year term, with the entire principal amount due at maturity. This refinancing replaced the previous $101 million secured loan with interest at 6.37% and maturity in Sep 2017.
Achieving this refinancing for the Westin Building Exchange marks its value creation. Moreover, significant interest from the lending community denotes the increasing importance of the data centers as an asset category.
In fact, with growth in cloud computing, Internet of Things and big data, and an increasing number of companies opting for third-party IT infrastructure, data center REITs are experiencing a boom market. In fact, demand has been outpacing supply in top-tier data center markets and despite enjoying high occupancy, these are absorbing new construction at a faster pace. Also, with an improved outlook for economic growth, demand for data centers is likely to climb further.
Digital Realty is also making concerted efforts to ride on the growth curve. Early this June, the company announced that it is set to acquire DuPont Fabros Technology, Inc. . This move would enhance Digital Realty’s portfolio in the top U.S. data center metro areas across Northern Virginia, Chicago and Silicon Valley. It is also anticipated to be immediately accretive to financial metrics. (Read more: Digital Realty to Acquire DuPont Fabros in $7.6 Billion Deal)
Currently, Digital Realty carries a Zacks Rank #3 (Hold). In addition, year to date, shares of Digital Realty climbed 15.0% and outperformed the Zacks categorized REIT and Equity Trust – Other industry’s gain of 4.0%.
Liberty Property Trust and PS Business Parks have long-term funds from operations (FFO) per share growth rates of 6% and 5%, respectively.
Note: All EPS numbers presented in this write up represent funds from operations (FFO) per share. FFO, a widely used metric to gauge the performance of REITs, is obtained after adding depreciation and amortization and other non-cash expenses to net income.
5 Trades Could Profit "Big-League" from Trump Policies
If the stocks above spark your interest, wait until you look into companies primed to make substantial gains from Washington's changing course.
Today Zacks reveals 5 tickers that could benefit from new trends like streamlined drug approvals, tariffs, lower taxes, higher interest rates, and spending surges in defense and infrastructure. See these buy recommendations now >>
Unique Zacks Analysis of Your Chosen Ticker
Pick one free report - opportunity may be withdrawn at any time
Image: Bigstock
Digital Realty JV Closes $135M Refinancing, Ups Flexibility
Data Center REIT Digital Realty Trust, Inc.’s (DLR - Free Report) joint venture has completed a $135 million secured debt refinancing. The move offered greater financial flexibility by extending the debt maturity profile at a favorable cost.
Specifically, a $135 million 10-year mortgage was closed on the Westin Building Exchange which is owned in a 50/50 joint-venture partnership with Clise Properties. The property serves as the internet exchange for the Pacific Northwest in Seattle, Washington.
This new mortgage financing has interest at a fixed rate of 3.29% per annum with a maturity in Jun 2027. It is interest-only during the 10-year term, with the entire principal amount due at maturity. This refinancing replaced the previous $101 million secured loan with interest at 6.37% and maturity in Sep 2017.
Achieving this refinancing for the Westin Building Exchange marks its value creation. Moreover, significant interest from the lending community denotes the increasing importance of the data centers as an asset category.
In fact, with growth in cloud computing, Internet of Things and big data, and an increasing number of companies opting for third-party IT infrastructure, data center REITs are experiencing a boom market. In fact, demand has been outpacing supply in top-tier data center markets and despite enjoying high occupancy, these are absorbing new construction at a faster pace. Also, with an improved outlook for economic growth, demand for data centers is likely to climb further.
Digital Realty is also making concerted efforts to ride on the growth curve. Early this June, the company announced that it is set to acquire DuPont Fabros Technology, Inc. . This move would enhance Digital Realty’s portfolio in the top U.S. data center metro areas across Northern Virginia, Chicago and Silicon Valley. It is also anticipated to be immediately accretive to financial metrics. (Read more: Digital Realty to Acquire DuPont Fabros in $7.6 Billion Deal)
Currently, Digital Realty carries a Zacks Rank #3 (Hold). In addition, year to date, shares of Digital Realty climbed 15.0% and outperformed the Zacks categorized REIT and Equity Trust – Other industry’s gain of 4.0%.
Stocks to Consider
Better-ranked stocks in the REIT space include Liberty Property Trust and PS Business Parks, Inc. . Both the stocks carry a Zacks Rank #2 (Buy). You can see the complete list of today’s Zacks #1 Rank (Strong Buy) stocks here.
Liberty Property Trust and PS Business Parks have long-term funds from operations (FFO) per share growth rates of 6% and 5%, respectively.
Note: All EPS numbers presented in this write up represent funds from operations (FFO) per share. FFO, a widely used metric to gauge the performance of REITs, is obtained after adding depreciation and amortization and other non-cash expenses to net income.
5 Trades Could Profit "Big-League" from Trump Policies
If the stocks above spark your interest, wait until you look into companies primed to make substantial gains from Washington's changing course.
Today Zacks reveals 5 tickers that could benefit from new trends like streamlined drug approvals, tariffs, lower taxes, higher interest rates, and spending surges in defense and infrastructure. See these buy recommendations now >>